As early as Year 4 or 5, the value of your renewals business could overtake new business.
Investment in Customer Success and Renewals should be calculated vs. the cost of acquiring new customers to replace the churn.
As mentioned in the Top Six RevOps Challenges, Commercial Governance plays a big part here — steering away from customers with a poor product fit, who are likely to leave or consume precious Development/Support resource. RevOps often run a 'Deal Desk' function to increase visibility of non-standard deals, so that the company can decide whether to invest or walk away.
RevOps should also be ensuring that you can accurately differentiate between net new and cannibalised revenue. This involves being able to track churn at the SKU level — something not always implemented in the CRM by default. Without this you will never be able to track retention accurately, and are likely to incur additional, unforeseen sales costs.
One way to make the new-business-vs-renewals picture tangible for leadership is a Bow Tie Funnel: pipeline narrowing to Closed Won on one side, renewals and expansion widening back out on the other. I've written up why it's a great concept but genuinely tricky to implement well, plus a free Qlik Cloud chart extension that plots it.
Retention drives more value than acquisition
Let's find out whether your CRM can already tell the difference between net-new and cannibalised revenue.