By highly effective I mean, your teams are processing enough renewals from your opportunity funnel to translate into 80% and above renewal rates on a consistent basis. If this is you, then congratulations you are an outlier and do not need to read any further!
However, if you’re not one of those outliers, working with our global customers we’ve developed a list of 8 traits that characterize a highly efficient and effective renewal sales organization.
1. The renewal process is centered around the installed base data
The installed base or original asset data provides the most robust foundation for quoting future renewals. Every time you sell a new product or service, an asset item should be created item in your database that can be used to trigger the renewal notification and task.
In some cases, you may not have the detail for every original asset (eg depending on the age or systems data entry at the time), however once a contract renewal is processed, it’s worth building in a process to capture, validate and add this new data to the existing assets.
2. Opportunities are presented to the specialist (i.e. they don’t have to look for them)
Providing a “live” list of opportunities to your renewal specialists is a far more efficient way of mining opportunities than relying on them to sift through data to identify the assets that are due for renewing. Ideally this list is presented through a tool such as iasset.com that captures the right information and reduces the need for manual intervention.
3. 100% of the opportunity funnel is accounted for
In an ideal situation, every single renewal opportunity is accounted with an appropriate sales strategy. Not every renewal is going to be a big ticket item, so it may be worth considering how you tackle the smaller ones (what we call the long-tail of renewals such as the sub $5000). Many organizations neglect these given the cost to chase them is not worth the economic benefit.
4. Channel partners are provided with timely opportunities
We’ve covered this in other blogs, but if you operate via an indirect channel, it’s essential to provide timely notice (ie at least 90 days) to your channel of upcoming expiring contracts. Your renewal sales organizations should have a regular rhythm to provide this information to your channel partners as well as mechanism to remind them at frequent intervals.
5. Escalate sale to direct outsourced operation in absence of channel action
In an ideal scenario, you will have implemented a strategy to outsource your low transaction value renewal follow-ups to a 3rd party – such as an iasset.com Sweeper. In the case that your channel partner hasn’t engaged in the renewal discussion and the expiration date is fast approaching, you can also escalate these quickly to a Sweeper team to follow-up. This is not designed to take the opportunity completely away from the channel partner (as they can still be allocated the renewal the following year), it’s more of a supplementary resource to tap into to prevent it from being delayed or even lost completely.
6. Leverage every customer interaction to maximize customer value
Every interaction with the customer should really start with how the product or service is performing in the mind of the customer and whether there is an opportunity for the customer to extract more value from it. Only after this is covered, should any agenda items such as a renewal or other promotions be discussed.
7. Streamline the quote-to-invoice process
For your renewal sales organization to be truly effective, the process from quote-to-cash should be completely streamlined and automated. This becomes even more important for organizations processing renewals via channel - the number of times you potentially can go back and forth over email with various channel partners is endless - from fixing or amending quotes to prompting reminders. The more this is automated the more efficient your renewal sales organization will be.
8. Measure and monitor every aspect of the Opportunity-to-Payment cycle
Improvements can rarely be made to processes without actually measuring and monitoring them in the first place. Tracking the time frames between each part of the opportunity-to-payment cycle is useful in identifying bottlenecks. In addition, monitoring the performance of channel partners in securing renewals can also be a good indicator of your best performing partners and whether you should reward them with rebates.
In conclusion, if boosting your renewal rates to greater than 80% is a priority for you, then building and developing processes to demonstrate these traits will go a long to achieving that goal. There is absolutely no doubt that investing in a solution such as iasset.com will help you automate, streamline and support much the administrative work that is required to operate a highly efficient and effective renewal sales organization and channel, so contact us today and move your renewals in to high gear.