Data suggests that up to one third of the service revenue annuity stream available in the market goes untapped. This represents a shortfall of millions upon millions of dollars in revenue for today’s manufacturers. By employing new technology tools and applying best-practice data management techniques for improved service contract management, marketers can quickly turn this situation around, and drive stronger revenue for their companies.
Nobody wants to leave money on the table, but that’s exactly what’s happening today as marketers miss out on the significant income opportunity that maintenance service contracts represent. In the technology sector, the bulk of these missed opportunities fall under the realm of “low-dollar renewals.” These contracts must be renewed by the business customer to secure continued service protection for a product or asset they already own.
And while marketing and selling a service renewal to your installed base may sound easy enough, the reality is that low-dollar contracts are neglected time and time again simply because they’re difficult and time consuming to track and manage.
What steps can marketers take to ensure their organizations are properly managing the growing service renewal opportunity? First off, be prepared for a data deluge: turning service renewal campaigns into revenue is a responsibility that comes with accountability for data quality, data management and data integration. Here are three key points to consider:
1. Strive for Data Quality: Experienced marketers know that without quality data, even the most well planned marketing campaign can go bust. In the service renewal business, that data includes customer contact information, product serial numbers and service expiration dates. With ongoing processes designed to turn incomplete or inaccurate data into actionable business intelligence, however, your service revenue initiatives efforts will shine.
2. Take Control: Through stronger data management combined with best-practice automation techniques, marketers can take the hassle out of the service renewal process. If done properly, service renewals should take no more than a few minutes for your customer to transact. And, best of all, with new technology tools behind them, marketing and sales organization can become much more thorough: they can ensure that all service contract opportunities – no matter how small – are being pursued quickly, efficiently and at a low cost.
3. Don’t Be a Silo – Integrate:
The most effective and low cost way to drive high-volume, low-dollar service contract renewals is through email campaigns. These emails should be designed to prompt the customer to transact their service renewal via their platform of choice – whether that means putting them in direct contact with a specific sales agent, or connecting them online with a preferred ordering system or cloud-based platform. No matter what the choice, marketers must ensure that the resulting data is shareable – that the transaction can be integrated seamlessly and recorded across your ERP, purchasing or order processing platforms. It all comes down to measurement and making sure transaction data can be tracked back to the source so that future campaigns can be adjusted accordingly.
By starting out with high quality data, and adding in some of the latest technology tools, marketers can make the service contract renewals process a “low touch” or even “no touch” transaction. By making transactions simple for the customer, stronger sales can be anticipated. In addition, by eliminating the traditional service sales bottlenecks, marketers can expedite time-to-close ratios and dramatically reduce sales and marketing costs along the way.