The Reality of Self-Service Renewals for VARS

The percentage of renewals that close plummets when a manual re-quoting process takes two weeks or more to run up and down the channel before making it to the end user. End users cannot understand how it can take so long to revise a quote. But the reality is that often, quotes and re-quotes are run up and down the channel – with delays at each stop – to amend and approve each renewals quote. Spread that across hundreds or thousands of transactions, and the cost implications are astounding. Not to mention the time and effort required to manage the renewal business for sales staff at the vendor, distributor, and reseller.

Does the following process sound familiar?

1. A renewal comes due, and the vendor issues a quote to the distributor.
2. The distributor reviews the quote, makes adjustments, and returns the quote to the vendor for review.
3. The vendor approves the revised quote, and sends it back to the distributor.
4. The distributor passes the quote down to the reseller.
5. The reseller reviews the quote, makes an adjustment, and sends it back up to the distributor.
6. The distributor reviews the change, approves it, and sends it up to the vendor to review.
7. The vendor approves the change, sends it back to the distributor, who sends it back to the reseller.
8. The reseller presents the renewal quote to the end user.
9. The end user wants to make a change.

And so the entire process continues (assuming, of course, that all the hand-offs were perfect). Emails and revisions and re-quotes. Day after day of delays. The customer loses interest, the channel partner loses margin, and any sense of urgency is crushed. And the further down the value spectrum you go for a renewal sale, the less attractive it is to a sales or renewals team to do this extensive legwork. This kind of manual renewal business has dismal closing percentages.

Why does it happen like this? This kind of manual approach (in the era of seemingly endless technology solutions that speed up and simplify everything else) is frustrating and costly for everyone involved.

Empowering the Sales Channel to Quickly Close Renewal Sales

The solution is to build a process for automating re-quotes that empowers the channel by establishing a set of business rules that restrict the kinds of changes can be made without vendor review and approval. For example, business rules may include:

• The discount cannot change from its pre-agreed level
• Self-service quotes are limited to renewal opportunities of, say, $20k and less
• Controls that ensure resellers focus on renewals due in the current period, and not skip over smaller opportunities due now
• Special bids at low dollar levels should be eliminated

Using technology and standard APIs (Application Program Interfaces), software can provide the structure that speeds up the renewal re-quoting process from two weeks (or more) to merely seconds. At the same time, it enables the vendor to maintain visibility across the entire renewal business.

Here's how an empowered channel manages the renewal business:

1. Reseller automatically issues renewal quote to the end user (based on the vendor or their distributor's established business rules for renewals quotes)
2. End user requests a change
3. Reseller immediately makes that change in the software system, and provides a re-quote to the end user
4. The end user agrees and issues a purchase order

The renewal sale is closed within minutes, the end customer is issued an invoice, the data specific to the renewal quote is automatically updated for the next anniversary with the distributor and the vendor's systems, and the reseller moves on to the next contract that's up for renewal.

With an automation tool in place that integrates with existing IT systems and offers a streamlined central resource for renewals communications, tracking, quoting and performance metrics, vendors can empower their channel partners to maximize their renewal sales performance.

Get more tools to make your channel more effective by downloading our white paper, Collaborate in the Channel, to access best practices for your renewal business, including:

• Building an actionable IB picture
• Unifying KPIs and processes
• Enabling your channel
• Segmenting your sales strategies
• Creating a tech refresh pipeline