Contract renewal refers to the sales process of extending the duration of an existing contractual agreement with a client for ongoing products, services, subscriptions or technology usage.
Sales teams aim to secure contract renewals well in advance of expirations to sustain recurring revenue streams. High customer retention rates and renewal percentages are pivotal sales metrics. Renewals also provide an opportunity for expansion during renegotiations.
Successful contract renewal discussions balance conveying the business value achieved for the customer, summarizing key outcomes, taking stock of the overall relationship, collaboratively planning future initiatives, and negotiating fair renewal terms for both parties.