Businesses face constant pressure to generate more revenue each year; and in this economy, delivering on that promise is more difficult than ever. That’s why it’s important to look at the customers that you have, and find new ways to reach out to them to strengthen your relationship and build lasting ties through the renewal of warranty and maintenance contracts.
Finding these recurring service revenue opportunities within your installed base can be tricky. In fact, it’s a challenge that has not gone unnoticed. Many manufacturing and distribution heavyweights are turning to third-party cloud platforms to identify service renewal opportunities and maximize service contract revenues across the supply chain.
Some of these emerging tools also take it a step further by automating sales processes, including the delivery of quotes to the market and even the process of submitting order transactions – which can be complex in a multi-tier distribution environment where multiple ordering systems are involved. Through advances in automation, sales professionals are finding more time to sell, and spending less energy on the time-consuming back-office administrative tasks that can consume their work day.
Today’s cloud-based service sales platforms will literally do all the heavy lifting: they set the stage for sales agents to send out authorized quotes to customers in a timely manner – just in advance of service contract expirations. By making the service contract process a “low-touch” or even “no-touch” transaction, sales professionals can eliminate the bottlenecks traditionally associated with service contract sales, expedite time-to-close ratios, and dramatically reduce sales costs along the way.
Quality data is key
Whether you have access to a service contract platform or not, having quality data to work with is critical to your success with warranty and maintenance renewals. It all starts with maintaining accurate records on product and service transactions. When you’re potentially dealing with thousands of service contracts attached to thousands of products sold over a period of several years, your sales teams must have access to data that details which products were sold to whom and when. This includes complete transaction details as well as up-to-date customer contact information.
Only then can the most effective follow-on sales take place, whether for service renewals, or product refresh sales. With this kind of business intelligence in hand, your sales team will be able to take all the guesswork out of the service sales equation, ensuring the ability to effectively track expiring contracts and, most importantly, take action on them at the proper time.
In a channel distribution model, data integration is also key. Many of today’s service contract platforms integrate seamlessly with manufacturers’ and distributors’ ERP, purchasing and order processing systems to ensure complete compliance with existing business practices. This helps streamline the quoting and ordering process, making sure not only that quotes meet with manufacturer approval, but also that the transaction is streamlined across your back-office platforms, communicated to the distributor, and accounted for in all the appropriate systems. And all of this must be executed quickly so that customers don’t lose patience, or interest, and sales agents don’t waste time on the sale.
Include your partners in your sales technology ecosystem
External sales teams and distribution channel partners play an important role in bringing your products to market. Don’t leave them out of the service sales equation. Grant them access to your service sales transaction platforms and sales automation systems, and educate them on the use of these technologies.
For channel partners in particular, it can be a challenge to associate the appropriate service contract to your product line, particularly if it is complex. If your system will automatically match relevant services with products installed in the market and prompt your channel partners to inquire about contract renewals with their customers at the appropriate time, then you are giving them powerful sales ammunition.
Better yet – if your system will automatically send the renewal quote out to the customer in advance of the existing contract’s expiration, and drive the customer back to your website to order the service, then you have literally taken all of the time and effort out of the process. And it’s a win-win for every party involved because the customer is pleased that they are able to ensure that their product investment remains covered under contract, and the channel partner gets the benefit of receiving proceeds from the sale, since the system – if designed correctly for channel enablement – will align their name with the customer’s.
When you’re considering a service sales platform or channel sales enablement system, ensure that your chosen solution incorporates automation to not only eliminate tedious manual processes but also allow your business to easily extend its reach to address every opportunity, no matter how small. Through automation, your business will realize greater profits and revenues because you are giving your sales teams more time to focus on high-dollar opportunities. By using automation, particularly for high-volume, low-dollar service contracts, you are freeing them up to do what they do best – sell.
Results you can bank on
How is this new generation of sales technology making an impact?
At Azlan (a tech data company), recurring revenue improvements of up to 40 percent were achieved through a new cloud-based service sales implementation. In addition, sales time-to-close ratios improved by a factor of 10 for the technology distributor, and the time required for sales agents to create a service quote was reduced from 20 minutes to less than two minutes.
Service contract sales is not rocket science, but it is a process that requires ongoing data management, channel enablement and automation in order to quickly reach your service sales goals. Any company that focuses on the above tips is sure to see stronger recurring revenues as a result of their efforts.
Scott Herron is president and chief executive officer for MaintenanceNet, Inc., a leading provider of extended warranty and maintenance contract management services. He manages the long-term strategy of the company. An original MaintenanceNet founder, he brings more than 20 years of technology consulting and business management expertise. Herron is an active investor and advisor to a variety of Southern California technology-based companies.