Why unconscious bias holds the key to contract renewal - ThinkJPC

Why unconscious bias holds the key to contract renewal

Tap into behavioural science and ABX to give your business the human edge it needs to retain customers, says Tim Lennard

Two factors are working together to make it imperative for enterprise-level technology companies (ELCs) to retain more customers. The shift towards cloud-based consumption models means customers aren’t ‘locked in’ to the degree they once were, making it easier to switch suppliers. Combined with the current squeeze on capital, ELCs are finding the high cost of acquiring customers faster than they are losing them prohibitive, and no longer a viable growth strategy.

This has placed the focus firmly on retaining business due to the less time, effort and expense it involves. Retention is crucial not only to maintaining existing revenues, but also driving growth through strengthening the customer relationship, which in turn helps open the door to lucrative cross-selling and upselling. 

Making contract renewal a higher priority demands a different strategy.  Studies have shown that the first renewal carries the most risk, with the second and subsequent ones achieving a higher win rate. So, it’s important to work particularly hard to win the first and reap the benefit of lower risk renewal next time.


The contract lifespan gives your customer a time frame in which to ready themselves for a renewal decision. Equally, it presents you with an opportunity to set the stage in a way that is most likely to retain the business. But how best can you do that?

The arguments that won the business are likely to be different from those that will successfully retain it. Re-emphasising business benefits and performance, for example, could fall of deaf ears, as rivals are likely to have upgraded their solutions over the course of your contract and be able to equal or exceed what you offer. Keen to steal the business, they will probably also be cheaper. 

However, what you do have over your rivals is a relationship with your customer, which you should leverage to the max using a combination of account-based experience (ABX) and behavioural science. It’s always important to remember that it’s people who do the buying, and ABX enables you to take a more personalised, human approach. Focused on maintaining ongoing engagement with key decision makers over the life of the contract, it can create a vital element of differentiation and influence that can tip the balance in your favour. This is even more so for retaining business.

Behavioural science can also be used to strengthen this human edge by recognising the cognitive bias, both conscious and subconscious, that lies behind a stakeholder’s thought process. Here are the key behaviours to bear in mind:

Availability bias

Recent experiences that are immediately available to your customer tend to carry more weight than those in the past, as they are tougher to recall. So, in the months before the contract expires, it’s worth reinforcing any positive outcomes that have arisen over the term of the deal to ensure they are front of mind.

Present bias

Past success is important, but how you are performing now and any upcoming improvements are likely to carry more weight. Delivering the current and future business benefits will clearly show what your customer will gain from renewal, particularly if you can present the case of why they exceed those of your potential rivals.

Status quo bias

For every customer, there will be an element of inertia that puts them off switching suppliers. This is fuelled by the time and effort needed to start a new supplier relationship and integrate their solution, along with the associated cost. Recognising this and amplifying the benefits of continuity will reassure your customer that sticking with you is the right choice. And it’s probably something most customers prefer to do, so make it as easy for them as possible.  

Risk aversion

Few people will choose uncertainty over guaranteed positive outcomes. Your customers will be no different. This means that positioning your solution and your business as the tried and tested, trusted option will further your case for renewal.

Loss aversion

It’s a widely observed psychological trait that people generally prefer to avoid losing something valuable than gaining the equivalent. So, you can make retention more likely if you clearly communicate how the benefits your customer currently enjoys, through both your solution and your relationship, would be lost if they switch suppliers.

The importance of retaining customers cannot be overstated, particularly in these uncertain and highly competitive times. Building behavioural science into an account-based experience (ABX) programme that maintains ongoing engagement throughout the contract lifecycle can ensure you prepare for renewal well in advance and deliver personal communications to key stakeholders that recognise their unconscious biases and aversions. Remember, you’re in pole position as an incumbent, so use all the tools you can to optimise your chances of securing a renewal.


  • The shift towards cloud-based consumption models combined with the current squeeze on capital is making the high cost of acquiring customers faster than they being lost prohibitive.
  • This is placing the focus on retaining customers, which requires less time, effort and money than a new win, but also a different strategy.
  • The first renewal carries the most risk. So it’s important to work particularly hard to win the first and reap the benefit of lower risk renewal next time.
  • Taking a more personal, human approach, like ABX, which delivers ongoing key stakeholder engagement across the life of the contact and recognises your customer’s unconscious bias, optimises your chances of retaining business.

JPC associate Tim Lennard MSc, FCA, BA has 30 years’ experience in B2B sales and marketing and an MSc in Applied Psychology and Economic Behaviour. His 2022 study is entitled ‘Bias in Commercial Contract Renewals – the case for a Nudge’.