Much like jumbled piles of wood needed to frame a house, piles of data sit in most companies waiting for a blueprint to construct something meaningful out of the mess. It’s not an industry secret. Companies struggle with best practices around their data and most don’t have a plan.
“Everybody complains about their data. They complain about the transparency they have into their renewal base, the data integrity behind their models, and their customer master records… everybody has these issues.” (Lambert Walsh, VP and GM of Americas Channel Sales, Adobe)
Consistency and accuracy are essential for data integrity, yet without a data blueprint consistency and accuracy continue to be the leading flaws with data-capture methods in most companies. Further, companies have to use the data they have gathered over time, even if data is missing or some doesn’t make sense. Saying “I quit” and starting over is not an option.
A well-crafted data blueprint gives a 360-degree view of data so companies can get a complete picture of their customer base. Using a blueprint, companies can begin to organize and create individualized plans of action for each customer, encompassing contract and subscription renewals to cross-sell and upsell opportunities.
The disparity between those companies that have identified best practices regarding their data and those that have not is best illustrated in the $30 billion in renewal dollars that is left sitting on the table each year due to ineffective data management. Best-practice companies know how to maximize their recurring revenue through rigorous focus on data and leave very little sitting on the table.
In Gartner’s October 2011 research paper titled “Measuring the Business Value of Data Quality”, the authors state that “40 percent of the anticipated value of all business initiatives is never achieved (and) poor data quality in both the planning and execution phases of these initiatives is a primary cause.”
Best-practice companies understand the correlation of data quality and business performance, and best-practice companies always operate from a data blueprint.
The data blueprint
There are three essential steps for creating a data blueprint in order to gain insight into your customer base.
1. Assess the mess. Renewals data is vastly different and much more complex than data for new product sales. The reason for the complexity of the mess is that data for renewal opportunities is housed in multiple disparate systems and can include:
- Customer contact data
- Asset data (e.g., physical assets and software contracts)
- Product data like SKUs, pricing and configuration
- Quote, order and offer data
Renewals sales teams often struggle to get a clean and accurate look at their actual renewal opportunities because of the challenges in locating the right data in the midst of all the existing data mess.
Once you can assess your mess and understand your data landscape, you can begin to categorize and plan for business opportunities.
2. DIY or use a data architect. The first question raised when drawing up a data blueprint is whether you can do it yourself (DIY) or whether you need to find a specialist. The approach varies based upon your existing systems landscape.
The DIY approach uses what’s easily accessible and readily available. This typically means using the systems already in place and heavily customizing them for renewals management.
The specialist approach involves finding a purpose-built renewals management platform with tools designed to aggregate renewals and recurring revenue data — a much more intensive process than many realize.
The consensus among underperforming to average performing companies is that the DIY model works fine. These companies try to configure their existing CRM systems to track and analyze data, but they get average results since these systems are designed to manage data for new sales, not renewals. It’s like using the bottom of your screwdriver to hammer in a nail: it will work, but it’s not the most efficient tool.
The highest performing companies use platforms with specialized data-management capabilities to uncover untapped renewal opportunities within their customer base that directly correlates to an uptick in renewal rate. Companies using these automated renewal platforms can see increases in renewal rates up to 15 percentage points.
When choosing the specialist route it is important to find a platform and solution that is based on substantial experience in separating out actionable renewal data. A company can leverage this experience and immediately begin to manage all of its own data.
The platform should also provide for integration of all necessary data sources and should intelligently manage vast amounts of renewal data.
So look at your toolbox and decide: hammer or bottom of your screwdriver?
3. Customize your blueprint. Now you can customize your blueprint to meet your requirements and to best support your decision making.
If you chose the DIY approach, you won’t have the same level of agility and business insight since your data will still be spread across multiple disparate systems.
If you chose the specialist approach, you’ll have a renewal-ready data blueprint in hand and your renewal teams can start selling. The purpose-built platform eliminates the need to switch between multiple disparate systems, giving back time to the renewals teams to sell your value, rather than to perform administrative tasks like finding the right data.
Renewal sales teams can increase productivity by up to 25% by using renewal-ready data (based on data from over 80 companies using ServiceSource services).
Appraising your renewals
Once your business has its blueprint and the systems in place to maximize recurring revenue, you can begin to appraise your ongoing business. You can compare options to deliver an objective, you can evaluate the specific worth of each renewal opportunity and you can determine which data should be kept or can be dumped. The blueprint allows you to build exactly what you need for your business objectives.
When you use a blueprint and a professional contractor to build your house, you’ll end up with a home that meets your requirements. In this same fashion, using a data blueprint and a specialist (in the form of a purpose-built renewals solution) you’ll get an environment specifically built to maximize your recurring revenue.
It is your key to making your company’s recurring-revenue building process efficient and productive. And with a blueprint, as your business needs change, you can easily remodel your business objective without having to build from scratch each time.
Christine Heckart is CMO of ServiceSource, the leader in recurring revenue management solutions. Christine has over 20 years of experience with tech companies in executive management roles. She previously served as CMO of NetApp; GM of Microsoft’s TV, video and music business; and CMO of Juniper Networks. She is currently on the board of directors at Lam Research. Christine is the author of two technology books.