A widely held belief is that renewals programs are simply an organizational process that involves managing lots of transactions and closing opportunities. However, a successful renewals program is actually a multi-faceted program that requires many different aspects to come together.
For example, there is a significant emphasis on people management and retaining your best renewal specialists, some of which is discussed in this blog, but here we discuss specific programs (what we call our growth programs) that any successful renewal strategy should include to maximize the opportunity to generate revenue.
Maintenance/Warranty Extension Campaign
This is a fairly basic program that most companies in some shape or form adopt. World Class channel organisations sell the initial maintenance contract with the covered product but in scenarios where this doesn’t occur, it’s essential to have a backup option, which is where a renewal program comes in. A maintenance and/or warranty extension program can drive post sale where a maintenance contract is not captured during the initial Point of Sale.
End of Life (EOL) or End of Service (EOS) and “Tech Refresh”
Having an EOL/EOS event is also an essential part of any lifecycle program. Most IT products and services have a maximum of about 3 years (although there are exceptions), so keeping track of these is important to generate continuing streams of revenue and avoid customer churn. Ideally these programs are linked to a pre-defined technology refresh, migration or upgrade opportunity or trigger a salesperson to chase an opportunity, which depending on your available systems can be completely automated.
Win-back programs are slightly more sophisticated, and are suitable in scenarios where prior year renewals have been lost to a competitor. These opportunities should be triggered at a similar notice period to a standard renewal transaction and provide an opportunity mostly for distributors and resellers to regain the incumbency of a particular transaction. Depending on the opportunity, these can be quick wins for channel partners. As much as possible though, use of automation to generate lists of win-backs is ideal, as they can be highly manually intensive.
Ensuring the appropriate incentive programs are in place is an important aspect of any channel strategy. A rebate program should be embedded as part of a vendor’s renewal program to track and monitor performance of channel partners as well as automatically calculate performance aligned to a channel rebate program. It can provide valuable insights into which ones are working and which ones need to be evaluated to improve overall performance of the renewal program.
Long Tail Renewals
The reality is that some renewal opportunities are just too small to be economic for the channel to chase. The volume of these opportunities together however, means they can represent a significant amount of business. (Also by not renewing them, you lose the ability to Expand or Extend other opportunities to this group). An outsourced and fully integrated telesales team can be used to chase the long tail of renewals. The important thing to consider is that this team is “fully integrated” to ensure they are operating on your systems rather than “giving away” your data to a third party. The cost should be significantly less than using internal sales resources to make this service applicable.
By implementing all of these programs into your overall renewals strategy, you will not only benefit from better management of your renewal opportunities, but also generate more revenue and improve customer engagement.
Contact us for more information on how to embed these growth programs into your renewals strategy.