We are all painfully aware that businesses have historically spent much sales and marketing time and money on capturing new business. But executives globally now understand the importance of the proper care and feeding of existing customers. They appreciate that customer life-cycle management and “improving the customer experience” must be a top priority.
In fact, titles like “Chief Relationship Management Officer” (CRMO) are the fastest growing C-level position. As a result, the oft-forgotten area of renewals (aka recurring revenue) has moved center stage.
Retailing 101 teaches it is far less expensive to keep a good customer than get a new one. Plus, bad experiences can go viral and destroy a brand’s reputation in seconds. This means making it easy for a customer to remain one, and possibly become a brand advocate, is critical.
And achieving consistency in cash flow is every business executive’s dream.
For all of these reasons, the announcement from San Francisco-based recurring revenue management company, ServiceSource, of major new enhancements to its Renew OnDemand Software-as-a-Service (SaaS (News - Alert)) application warrants attention.
Recurring revenue management and the Cloud
Renewal management has been, to be polite, the subject of “benign neglect” even as much of the workplace has experienced a veritable revolution in business process automation. Renewals have been an area that typically gets attention when drastic anomalies downward indicate things are broken, and many times the fingers get pointed first at the sale people and not the processes they must use to do their jobs effectively.
It is why it has been one of the last places to be automated. Plus, it’s hard.
The challenge has been that unlike information for new sales, which is typically housed in one CRM system, maximizing recurring revenue requires extensive data from five to seven different systems. What this translates into is that renewal sales teams (usually distinct sales forces who historically do not share information with other sales associates), can spend 30-40 percent of their time pulling data together. They deal manually with what should be automated.
The bottom line is they are spending a lot of time and effort, and being compensated for, not selling.
ServiceSource, for 12 years, has been helping customers work through the nightmares and complexities of renewals. Using best practices, sophisticated software and support services, they manage over $8 billion in annual recurring revenue.
Where Renew OnDemand comes in, and another reason why a Cloud-based approach is key, is through its ability to import needed data—including asset, customer contact, contract entitlement and offer history data—from a myriad of systems. Part of the secret sauce is that it then cleanses, merges and enriches that data to create renewal-ready customer records. Data quality is scored and Renew OnDemand identifies questionable data and quarantines it for corrective action by the customer or by ServiceSource’s expert data analysts.
A simple way to think about this is as a classic “garbage in, garbage out” problem.
Renew OnDemand service is based on proven best practices and software from that 12 years of experience. As ServiceSource says, “It leverages the principals of fast data and big data to analyze large, rapidly changing data sets and provide analytics that drive business decisions.”
The Spring 2013 enhancements are a significant step up in capabilities. They deliver Renewal Ready Data that aggregates, cleans, enriches and quality checks renewal data from multiple systems. In addition, there are advanced business analytics with 15 new recurring revenue-specific metrics and dashboards. Most importantly is the integration with Salesforce.com (News - Alert). From a customer lifecycle management perspective, the ability to have an easy-to-access view of potential new and recurring revenue sales opportunities for individual customers is crucial.
”Customers have relied upon our expertise in maximizing recurring revenue for over a decade. Four years ago several customer visionaries asked that we create on-demand software that would leverage the IP and (extreme?) data management technology that we have been using for years to automate and optimize this process for them,” said Mike Smerklo, ServiceSource Chairman and CEO. “Customers understand that recurring revenue accounts for 50 percent of their profit and traditional approaches to renewal sales leave highly profitable revenue on the table every year due to failed execution, excessive churn and missed opportunities to up sell and cross sell. Our new release of Renew OnDemand lets sales teams save up to 40% in administrative hours that can immediately be channeled back into selling.”
Think about the statistics in the above and work the numbers. If 50 percent of your profit is coming from renewals, and there is a solution that can save up to 40 percent in administrative hours, the bottom line impact of having clean data that is actionable for retaining and up-selling existing customers, along with providing the people who interact with them real-time and accurate account knowledge, is both invaluable from a workflow standpoint and incredibly valuable on the bottom line.
ServiceSource pairs Renew OnDemand with Data Services provided by a team of data management experts. With extensive experience managing data from the largest companies in the world, these teams specialize in understanding customers’ business and systems. They assess and monitor data quality and develop systematic approaches for ensuring the highest ongoing levels of data integrity.
A new view on renewals
What sales managers are likely to find particularly attractive are Renew OnDemand’s advanced business analytics and enhanced features. These consist of 45 recurring revenue-specific metrics, including the aforementioned 15 new metrics.
Renew OnDemand provides the intelligence to predict:
- Which customers are likely to churn
- Who is ripe for cross-sell or up-sell offers
- Which products and services increase retention
- How sales are trending by product, channel and region
ServiceSource says these analytics have proven to be good gauges of recurring revenue health.
Not surprisingly, customers understand the value. “We are looking forward to bringing ServiceSource’s analytics and purpose-built recurring revenue selling processes to our sales and channel teams through Renew OnDemand. By giving me the metrics and visibility to all my renewal opportunity that I need to manage my business and my channel, Renew OnDemand will make my sales team more efficient," said Michael Hartmann, vice president of Worldwide Service Sales, Blue Coat (News - Alert) Systems. “With Salesforce.com integration, Renew OnDemand will provide us an instant 360-degree cloud view of critical data for our new and recurring revenue sales on one page.”
The list of capabilities in regarding all of the key components of the new Renew OnDemand—clean and complete data from multiple sources, the advanced business analytics (including role-based access), and Saleforce.com integration capabilities—are extensive. The company’s video provides a nice introduction to the service along with an overview of the challenges many organizations face in effectively and efficiently dealing with renewals.
It highlights why Renew OnDemand provides the capabilities required to maximize the engagements you already have and which represent not just current vitality but are a large component of future sustainability.
It should also be noted that Renew OnDemand was the winner of a 2013 Stevie Award for Best New Business Intelligence Solution and was recognized one of Information Week’s “8 Cloud Services for Road Warriors.”
Finally, at the end of the day, consideration of a highly developed and secure SaaS-based approach to renewals should be looked at through the lens of customer adoption of Saleforce.com itself. The reality is that the data is secure, the business intelligence provided is actionable in a real-time world and is critical, the control and ability to customize things to meet your specific needs is built-in, you get the support of a company that has been in this business for years and has been trusted by important customers to process literally millions of transactions on a sometimes daily basis.
Reality is that what you want are several important things that Renew OnDemand can provide:
- Customer retention at lower costs
- Customer satisfaction because of increased knowledge by those they are in contact with
- Business intelligence that allows you to be proactive as well as reactive
- Sales people that are spending the bulk of their time selling
We are moving to a world where “E”verything is being offered as an online capability. With so much at stake in terms of the ability to truly impact the bottom line, a SaaS solution to bringing efficiency to the renewals process certainly is something to investigate.
Edited by Braden Becker