by James Dunham, SVP Product Management at ServiceSource
To fully understand recurring revenue performance in your business, you need to first understand the people in your business most involved with those numbers: the renewal sales representatives.
Research into the IT buyer paints a picture of a busy professional, handling enormous complexity at work and being courted by your competitors. Handling this valuable customer can be a tricky business. The renewal sales rep is the person that you’re entrusting with the ongoing customer relationship and revenue.
Despite the importance of their role, renewal reps keep a pretty low profile in most companies. Unless you’ve actually spent some time in that role, you probably don’t understand the reality of the renewal environment.
So we’ve put together a useful guide to the renewal rep, based on our experience here at ServiceSource working with recurring revenues at companies of all sizes.
What emerges is a picture of someone who is struggling with significant time constraints and insufficient data. Remember, this is the key person involved in realising your recurring revenues. Let’s look at the issues in more detail.
Not enough time A typical renewal sales rep may handle between 100-700 deals per quarter – many times the workload of someone handling new sales. They don’t have the luxury of spending a lot of time getting to know renewing customers. To make their numbers, they’ve got to keep moving.
Time is never on their side. Unlike new sales, renewal sales ‘age out’ pretty quickly. The closer they get to the actual contract renewal date, the lower their renewal rates. And once that renewal date passes, the chances of success dip drastically.
From the renewal rep’s perspective, this means that the newest and largest deals are always the most attractive ones. This results in “cherry picking,” which makes money left on the table an all-too common reality for most companies.
Incomplete data The renewal sales rep typically has to dig before talking with the customer – gathering data from between five and seven systems, including CRM, ERP and financial systems. After the archeological work the rep then has to assemble, manipulate and analyse the data to understand the customer context to develop an appropriate offer.
All of this takes time – something we’ve already seen is in short supply. In many cases, renewal sales reps spend more than half their time on gathering data, processing quotes, and other administrative tasks. That leaves less time for working with customers.
Given what we already know about the time pressures on the renewal sales rep, it’s quite possible that a rep might not have the whole customer picture when engaging with a customer about a renewal. And they certainly don’t have the time or relevant data to come up with relevant and targeted cross-sell or up-sell offers. They might expect the (busy) IT buyer to know what assets are covered or what renewal options are the best fit.
What does this tell us? Many businesses put renewal reps in a difficult position. They expect them to deliver very high renewal rates, without giving them the tools and data they need to be as effective and efficient as possible.
You cannot change the high-volume, data intensive, and time-sensitive nature of the renewals world. But you can support renewal reps so that they better represent your company’s interests in your ongoing customer relationships. And you can help them address the IT buyer’s need for efficient, optimised renewal processes.
BIO:
James Dunham
SVP Product Management at ServiceSource
James has extensive enterprise software experience addressing market requirements leveraging new technologies and business models. Ground up experience building new solutions, consuming acquisitions and creating new SaaS offerings.