In every industry, the case for maximising the potential of an existing customer base is compelling. The channel is no different. Sam Paris, Vice President Services & Annuities, Renewals, reveals how we’re using our expertise in solutions lifecycle management to maximise renewals-based revenue for vendors and partners.
Let’s look at the numbers.
- The probability of selling to an existing customer is 60-70%. The probability of selling to a new prospect is 5-20%
- 65% of a company’s business comes from existing customers.
- Increasing customer retention rates by 5% can increases profits by 25 to 95%, according to research by Bain & Company.
Regardless of the industry, and whether its B2C or B2B, the case for maximising the potential of one’s existing customer base is compelling.
In the channel, one way of doing so is by mining existing customer data to identify not only repeat business but also potential for incremental growth. And, as a distributor committed to value creation, Westcon-Comstor has put Solutions Life Cycle Management firmly in its sights to help maximise renewals-based revenue for vendors and partners.
From labour intensive to data driven
Not so long ago, there was a time when the channel relied on end-customers getting in contact with partners to renew. A very leaky process from a customer retention perspective, should a competitor make a timely intervention.
That may have been due in part because identifying renewals opportunity has been reasonably labour intensive. It’s also involved a somewhat complex workflow, as distribution seeks to extrapolate historical vendor and partner transaction data to pinpoint and shape renewal and upsell opportunity.
But data has the potential to change all that. And, becoming data driven is central part to our sales and marketing strategy. We’re taking the necessary steps to leverage data more effectively to transform Solutions Lifecycle Management.
By leveraging readily available data, we’re already informed about end customer needs.
Rudimentary data analysis typically enables renewal opportunity some 90 days out, which is good – but we believe, it can get better. With a more proactive approach, we believe that getting Tech Refresh opportunity identified at 180 days’ notice, and potential Upsell at 90 days’, is well within reach.
The ultimate goal is a channel nirvana of an ‘always on’ predictive approach to Solution Lifecycle Management. A rolling approach to that uses data to determine not only refresh and upsell, but also opportunities for solution development based on potential future requirements.
The application of data analytics – and integration with vendor systems – has the potential to open the door to a whole new world of lifecycle management. A world in which renewal opportunities are not only uncovered more systematically, but also far earlier, paving the way for higher value opportunities.
Our journey to get to this ‘predictive’ way of working in no small endeavour. Our experience in solutions lifecycle management indicates that timing is of the essence. But this new approach calls for more. It requires new levels of transparency and collaboration through the channel to enable self-service systems that can automate opportunity mining.
The pre-requisites to this way of working include not only up-to-date and accurate product information (installed base, contracts, SKUs, versions, licenses), but also a consultative sales approach characterised by technical capability, on-going solution engagement and programme implementation.
Here at Westcon-Comstor, we continue to expand our RenewView platform. We’re focused on improving visibility and conversion of renewal opportunities incorporating a Technology Refresh Lifecycle model.
We’re adding new vendors and capabilities to this approach, expanding its availability and streamlining the solutions lifecycle process. We’ve also piloted an effective and scalable ‘Renewals as a Service’ model by white labeling our platform for an APAC vendor.
We’re aware that we have some way to go and we’re making the necessary investment to accelerate our progress. We’re encouraged by our early successes as we bid to unlock all the potential that exists in our partners’ customer base.
Hear what our partners have to say about lifecycle solutions: