Many companies do not commit enough attention or resources to managing their renewal opportunities. Even though we know that it costs more to acquire a new customer than to retain an existing one; anywhere from five to 25 times to the cost of retention according to the Harvard Business Journal.
But organizations within the IT channel often need to process thousands of low-value renewal orders each week. The massive quantity of renewals can overwhelm their limited sales resources, often with a high cost of sale for a small return. And so, it can be tempting to outsource this part of the business, particularly for low-value opportunities.
There are several reasons organizations opt to outsource their renewals to an external telesales team, including no longer having the cost or burden of managing a large internal renewals team. The vendor can scale with their business needs, and reduce the overall cost of sale.
But there can be significant downsides to this strategy. Let’s explore the top four.
Lack of Automation and Efficiency
Whether a company hires more internal staff to process renewals or outsources to a vendor, the flawed process remains the same: a reliance on people to conduct a repetitive and time-consuming manual process. Sure, when you outsource your team doesn’t have to deal with it. But it remains an extremely slow and manual way to manage renewals and can be open to human error.
Relationship Management Concerns
If you rely on an external party to represent your brand and they do it poorly, the damage to your brand can be significant and swift. For example, are you confident that external sales representatives can understand your products and services well enough to answer any question your customer may have? Your organization is simply one of many others that these representatives are managing. With this comes a great risk of inaccurate messaging, and misrepresentation of your brand.
Less Control Over DataOutsourcing to a telesales team means you are required to share a significant amount of sensitive customer data with a third-party vendor. Once your data is shared externally, your ability to control and maintain data security is limited, and therefore there is an added risk of your data potentially being compromised.
When the third-party vendor processes your renewals, how will they share the data with you? How will they maintain renewal records? If you choose to reabsorb the renewals management in the future, will the transition happen without disruption to your current customers? It can be difficult and complex to ensure that a vendor’s technology systems will integrate seamlessly with your own. Remember, this is your data, so how do you ensure that it stays yours even after it has been enhanced with new contact details etc.? All too often we see outsource companies claiming ownership of data if it has been updated by their team.
The Solution: Maximize Your Internal Renewal Sales Management
You don’t need to outsource this critical aspect of your business to an external company. Instead, you could automate this function by arming your internal team with the right tools that can retain the benefits of outsourcing, whilst eliminating the risks.
iasset.com is a technology platform that is purpose-built for managing high volume renewals. It enables streamlined automation for renewals processing, it easily scales with your business needs, and gives you complete control over your valuable data records.
With the iasset.com quoting function, automated workflows will produce quotes at least 90 days before expiry. These can be validated or distributed directly to the customer via email or client branded portals. Alert notifications can be customized to generate reminders at different intervals in the lead up to the expiry date (for example, 60, 30, 15, 7 and 1). The result – faster quote to cash conversions and fewer headaches.
Read more about creating a successful renewals program that will contribute to revenue growth by downloading the ebook, "5 Tips to Successfully Grow a Renewals Platform".