Improved Overall Renewal Rates
Order Growth Improvement YoY
Consistent and Reliable Forecasting at Partner, Product, and Region Levels
In recent years, new equipment sales for Industrial OEMs (Original Equipment Manufacturers) have slowed significantly. Due to the recent pandemic, many industrial manufacturing customers are shifting focus from spending vast amounts of capital expenditure (CAPEX) to operational expenditure (OPEX) to make sure there are zero unplanned downtime events of the equipment they currently have. In order to capture recurring revenue potential, many Industrial OEMs are increasingly turning their focus to offering aftermarket services, such as spare parts, consumables, and preventative maintenance packages. In fact, aftermarket sales are critical components to improving customer loyalty, increasing every customer’s lifetime value, and, most importantly, increasing profit margins and revenue potential.
Many traditional industrial manufacturers lack the latest sales tools needed to properly analyze their pipeline, processes, and customer data to capitalize on every sales opportunity. The aftermarket sales competition is fierce for OEMs. Oftentimes, a customer can get a part or maintenance plan at a fraction of the cost as the manufacturer, so why would a customer want to stick with the OEM above a third-party vendor? The key is to treat each customer like they’re the only customer you have and become a value-added partner – not just an equipment vendor working to justify a price premium.
Automation Solutions Provider
Channel Management & Renewals
When ServiceSource started working with this automation solution provider in 2012, the engagement focused on increasing renewals for their software/hardware maintenance platform – a global, 24/7, multi-language technical support service. Their focus on increasing pipeline growth through the channel came at the cost of flat renewal rates. They sought to develop a better channel engagement model and improve their data around end-users’ activity to ultimately improve on-time renewals and retention rates.
The market continued to evolve. In 2019, the automation solution provider shifted its business model from perpetual licensing to a subscription-based service. The subscription model was new to its partners. Because they have been focused on traditional perpetual licensing processes (configuring, pricing, quoting new subscriptions, etc.), they have been challenged to implement a robust renewals process. Many partners have yet to fully establish and perform adequate onboarding, adoption, and expansion activities. To remain competitive, theyneeded to establish a scalable, more proactive customer experience (CX) practice as quickly as possible.
During the initial channel management engagement, ServiceSource implemented processes that helped the automation solution provider’s resellers achieve on-time contract renewals, increase customer retention, and grow their customer base. This set a high bar for their channel partners while also giving them the time and space to focus on other aspects of the service business. The improved engagement also prompted their partners to raise their standards by augmenting the organizational structure they had to implement for ongoing success.
When they shifted to a customer success-focused subscription model in 2019, the engagement model also changes from telesales to customer success. ServiceSource expanded the scope to cover customer onboarding, adoption and renewals, which helped further improve customer retention month after month. The partnership provided the resources and data expertise to deliver a new type of customer experience quickly as the automation solution provider assembled its team.
In addition to traditional renewals of their hardware/software maintenance platform, ServiceSource added CX experts to the existing team to augment the subscription business by covering onboarding, adoption, and health checks. ServiceSource helped them bring together technology, business processes, and people to deliver a seamless customer onboarding experience that differentiated the company from its competitors and improved customer loyalty.ServiceSource worked with the automation solution provider to quickly scale up their subscription model through a global customer success offering that supports various languages, time zones, and scopes. ServiceSource also aided in the coverage of their “long tail” customers, which rarely got their channel partners’ attention but quickly became a significant revenue stream for the business.
ServiceSource’s insights-driven approach helped the automation solution provider improve its customer engagement model. This improvement helped to better inform its team on renewal timeliness, technology adoption, while also providing the optimal onboarding experience. For example, suppose a customer doesn’t activate a product within a specific amount of time. In that case, the customer success team will proactively reach out to answer any questions and ensure the adoption of the product.
Throughout the partnership, the automation solution provider improved their overall renewal rates from 75% to 90% and their trailing renewal rates from 89% to 94% (FY14 vs. FY20.) Meanwhile, order growth improved 8% YoY, from 114% to 122%. After the expansion into customer success, the dedicated global sales and support team has grown from 30 to 48 people, including sales managers, operations managers, and sales reps to cover renewal, operations, and customer success.
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