Illustrative case study · Private Equity
Most leavers go in year one, with templates half built.
A private equity investor in diligence on a contract lifecycle platform had to decide whether its value creation plan could count on a price rise at every renewal. We interviewed 220 contract managers and delivered the report in 14 days.
Illustrative example. The company, scenario, and all figures are fictional. They show UserCue’s method and deliverable format. They do not come from any client study.
The engagement
Illustrative scenariodays, with the report, the data file and a live readout.
Legal operations and contract managers on the platform and its peers.
90 current customers, 60 former customers and 70 peer users.
Five rises from 3% to 12%, shown one at a time, lowest first.
A private equity investor
Whether the platform’s retention can carry the value creation plan
Customer VoC, during diligence
AI-moderated interviews with a peer scorecard and a price ladder
Loyalty, exit timing and reasons, switching cost, price tolerance
Legal and contract teams at mid-size and large companies in the US
Headline figures
of former customers left inside their first year on the platform
net promoter score among current customers, against +4 for peer users’ own tools
of current customers would renew without shopping around after a 7% rise
The question
Can the platform raise its price and keep its customers?
The value creation plan rests on renewals at a higher price. Three groups who own the contract tool could test it: the platform’s customers, the customers who left it and users of Peers A to C.
How does the platform’s experience compare with Peers A to C?
What keeps customers, and when and why did former customers leave?
How big a price rise would current customers accept?
What we did
How the study ran, start to finish.
- 1Kickoff
Retention figures, but no exit dates.
The deal team had data-room retention figures and a rise priced into every renewal, but no record of when customers leave. The researcher added former customers to date each exit, and peer users to show where customers would go.
- 2Design
Three groups, five price steps.
The screener took only whoever owns or signs for the contract tool: 90 customers, 60 former customers and 70 on Peers A to C. Current and peer users rated six criteria and met a five-step price ladder; former customers counted months from go-live to exit.
- 3Fielding
Leavers pressed on what they pay now.
Voice or text interviews ran a median 29 minutes, and each former customer was asked what the new vendor charges, to sort price exits from the rest. The researcher read all 253 and removed 33 for duplicate identities, contradictions or no hands-on use, leaving 220.
- 4Analysis
Most leavers quit during setup.
The researcher lined up each exit date with what the leaver said about their templates, and most exits came before the clause library was finished. 70% left inside their first year and 43% within six months; implementation and support drove 47% of exits.
- 5Readout
The rise waits for the second renewal.
At a live readout, the researcher presented the 34-page report and data file to the operating partner and deal team. The plan now funds an onboarding team to build each new customer’s clause library in its first quarter, and first renewals carry no rise.
What we found
Four findings from the report.
Customers rate the platform above its peers on everything but implementation and support, with a net promoter score of +18 against +4. Churn comes early: 70% of former customers left inside their first year, before their clause library was built. 68% of current customers say switching would be hard, most because of that library, and 62% would renew through a 7% rise.
Customers rate the platform above its peers, except on implementation.
Current customers give the platform a net promoter score of +18, and peer users give their own tools +4. The platform leads on contract search and trails on implementation and support, where 36% of its customers rate it good or excellent, against 59% of peer users.
Most customers who leave go in their first year.
70% of former customers left inside their first year, 43% within six months of go-live. Implementation and support drove 47% of all exits, missing integrations 27% and price 18%. 53% pay the same or more with their new vendor.
Former customers, time from go-live to exit · n = 60Once the clause library is built, switching looks hard.
68% of current customers say switching would be hard, and 79% of those 61 name the templates and clause library they have built. Approval workflows (52%) and contract history (44%) come next.
Current customers who say switching would be hard · multi-select · n = 61Most renew through a 7% rise; at 9%, most shop around.
At a 7% rise, 62% of current customers would renew without shopping around. At 9% that falls to 36%, and at 12% to 17%. 59% call today’s price fair for what the platform does.
Would renew without shopping around, by size of rise · n = 90“The first six months decide it. If the templates are still half built by then, people go back to email and the tool never recovers.”Legal operations manager · Illustrative quote
Illustrative quotes
Three themes behind the numbers.
“We signed in the spring and left before the next one. The implementation team changed twice, and we gave up before our clause library was anywhere near done.”
“Four hundred templates live in that system now. Nobody in legal wants to rebuild them, whatever the renewal quote says.”
“The CFO signs off on a small bump without a meeting. Much past that and my own team ends up redlining our vendor’s renewal, which is the last thing legal has time for.”
What the investor did
Three moves made with the report.
Made the clause library part of onboarding.
A dedicated team builds each new customer’s templates and clause library in its first quarter, early in the year when 70% of leavers go.
Moved the 7% rise to the second renewal.
The first renewal stays flat, since most leavers go in year one. From the second, the plan assumes 7%, which 62% of current customers would accept without shopping around.
Funded the integrations that leavers missed.
Missing integrations drove 27% of exits, so the two connectors leavers named most now ship with every new implementation.
Illustrative example. The company, scenario, and all figures are fictional. They show UserCue’s method and deliverable format. They do not come from any client study.
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