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The Definitive Guide to IT Channel Renewal Management

Everything you need to know about optimizing and automating renewals in an IT channel environment.

Content

What is renewals management?

The importance of renewal management for tech businesses

How can I optimize renewals management and increase renewal rates?

Automating renewals management

What makes a good renewal management solution?

How does the iasset.com platform work?

 

With the rapidly changing channel landscape, tech businesses can’t continue to rely on manual processes and legacy systems for renewals management. And yet, surprisingly, they do. 

Recurring revenue leakage runs rife and countless opportunities to maximize customer lifetime value are missed. Unfortunately, many companies are unaware of their inefficiencies and the revenue losses that follow. That’s why getting renewals management right is crucial.  

Here, we’ll dive deeper into why renewals management matters, how you should optimize your processes, plus things to look out for in an effective renewal management solution. Read on for your guide to renewals management in an IT channel environment.

What is renewals management?

Renewal management is a strategy and process implemented by businesses to protect their recurring revenue and existing customer base. When it comes to managing renewals in the IT industry, we are referring to the renewal of every hardware or software contract, license, and warranty sold. 

But in today’s highly competitive technology market, having a superior product simply isn’t enough to retain customers long-term. Renewals are never guaranteed and high rates of customer churn can have a serious impact on the bottom line.  

As such, technology vendors, manufacturers, distributors, and resellers must proactively manage and renew their recurring revenue streams, from maintenance contracts for service or support and software licenses, through to consumption-based ‘as a service’ agreements.  

You’re probably familiar with the adage “it costs more to acquire new customers than retain the ones you have.” Although that remains unchanged, the industry has undergone a marked shift in technology consumption habits – with implications for business stability.  

 

 

 

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The importance of renewal management for tech businesses

The way in which technology is consumed has shifted from perpetual ownership and annual maintenance to monthly subscription-based models or variable compensation models. As a result, the number of renewals that need to be managed has exploded, making it extremely difficult for renewal sales and customer success teams to manage these effectively – especially within a channel sales environment.

 

Potential risks

Without a comprehensive renewals management program or customer success strategy in place, technology providers risk:

• Recurring revenue leakage
 
• Customer churn/customer attrition
 
• Missed opportunities to increase customer lifetime value
 

 

The largest group of customers or contracts at risk are those which fall within the “low value/long-tail” renewal category. These are neglected due to their value being far too small for a renewal or customer success specialist to pursue. But while they might be low-dollar, they are of a high volume and collectively represent a significant amount of revenue. 

These transactions require a different sales motion that will help protect revenue – at a lower cost of sale.

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How can I optimize renewals management and increase renewal rates?

The process of identifying, pricing, quoting, approving, and reconciling data for renewal contracts can be a complicated, lengthy process - particularly within a channel environment. And, according to Forrester Research, siloed channel data is still an ongoing issue amongst vendors, distributors, and resellers. Add the wrong systems into the mix and you’re guaranteed to miss opportunities.

Standard ERP, CRM, and CPQ systems that are designed to handle net-new sales do not capture renewals-specific data effectively. As a result, a series of manual workarounds are developed by internal teams to help track and manage renewal opportunities. All too often, the default go-to becomes managing renewals through spreadsheets, the wrong systems, or attempting to build a custom solution in-house. 

None of these options is effective and results in significant operational costs and lost opportunities. 

Learn more: Revolutionize channel sales with the LIPS Strategy Whitepaper.

Experience tells us renewals teams are spending more time processing and checking information rather than renewing or upselling. That’s why we recommend a much more scalable solution that is automated, frees up your team to focus on the priority accounts whilst reducing operational costs.

Did you know?

According to TSIA research, when companies deploy a digital renewal capability, the median net growth in Dollar Renewal Rate performance is 11.5 points.

In addition to automation, another contributing factor to the success of your renewals management is an end-to-end customer success program that will help extend customer lifetime value. Not only that, but it helps reduce customer churn. 

Renewals are no longer about extending a service, it’s about expanding conversations to find additional revenue streams. You might consider retraining your team on successful renewal sales. However, the best course of action involves leveraging your installed base data. Your teams will be empowered to identify opportunities that demonstrate value to your customers and grow your revenue at the same time. 

But none of this can be achieved effectively without the help of automation.

Automating renewal management

So what’s the best way to automate your renewals management? The obvious answer is: use a renewal management platform. Now, the key to successful renewals management is automating with a solution that’s built for this purpose. But what if you want to create a solution of your own?

Building Software In-House

Building software in-house isn’t as straightforward or cost-effective as it seems. We’ve witnessed countless companies try and fail. The vast majority never finish and even if they do, the software is usually inferior to any SaaS available on the market. And let’s not ignore the significant time, expertise, and resource requirements for ongoing maintenance.

Related reading: Key Misconceptions About the Build vs. Buy Dilemma

Other companies charge forward into a renewals management program with the misguided notion that their existing systems can handle the job. The limitation here is that systems, such as ERPs, CRMs, or CPQs aren’t designed to manage recurring revenue and complex channel quoting nor can they aggregate the entire installed base into a single repository. 

Don’t risk losing business due to ineffective processes and the wrong tools. Let’s show you what to know about finding the right solution.

What makes a good renewal management solution?

When shopping for a platform that can effectively and seamlessly manage your renewals, consider these benefits in your checklist. 

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Converts quotes to cash faster

Your renewals management platform should enable bulk updates on pricing and margins and automatically generate order-ready quotes. In addition, any update made to a quote, contract, or asset detail should automatically be published to all other integrated systems, saving hours or days that your specialists or channel partners spend on sending email requests, re-quoting, and reconciling data.

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Integrates your channel partners

One of the greatest time wasters for renewal reps is the need for constant follow-up between vendors, distributors, and resellers while shepherding the quote through to order. To address the problems of volume and deadlines, renewal reps also need a tool that can minimize the phone calls and emails required for every quote to give them more time back in their day, so they can move on to the next customer. They need a standardized platform where vendors and partners can interact and exchange data in a secure, automated manner.

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Tracks every stage of the opportunity pipeline

To forecast revenue from renewals, it’s essential to track the progress of every sales opportunity and stage of the renewal cycle. You’ll want to be able to view what’s been booked, to be booked, overdue, lost, or canceled within any given time frame. 

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Seamless integration to your ERP & CRM

Research shows that data silos are bad for business. That’s why your renewals management solution should also integrate into your existing systems such as your ERP, CRM, service desk management, POS, and CPQ to ensure ongoing data integrity and greater data intelligence.

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Manages upgrade & other campaigns

Manages upgrade and other campaigns Incorporate your upsell, cross-sell, and win-back campaigns using the same platform to extend customer lifetime value and increase customer retention.

Fortunately, there’s a solution that ties all these elements together into a single source of truth. With a comprehensive platform like iasset.com, you can take the hard work out of managing and processing renewals. So how does it use automation to make it happen?

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How does the iasset.com platform work?

iasset.com is an automated, cost-effective solution for managing your entire installed base.

It centralizes product and partner data from your existing software, so it becomes a reliable, complete source of truth that’s updated in real-time. Not to mention, it’s purpose-built to effectively manage renewals for technology vendors/manufacturers, distributors, and resellers in a channel ecosystem.

Here’s how iasset.com automatically takes care of renewals.

Step 1: Consolidation

iasset.com consolidates data from your existing systems such as ERPs, CRMs, POS, or even spreadsheets. The end result is a single source of data allowing for identification and automation.

Step 2: Identification

Based on this consolidation, an entire list of renewable assets or contracts is created from which quotes are automatically generated at a specified interval before the expiry date (usually 120 or 90 days before).

Step 3: Automation

Quotes are automatically distributed without any intervention by a renewal specialist, eliminating the administration and data management associated with processing renewals. For higher value renewals, quotes can be presented to the renewal specialist for validation before publication.

Once the renewal process is completed, a loop occurs where data is not only fed back into the platform but also other relevant internal systems such as your ERP. iasset.com enables you to deliver more value to customers and partners by managing every stage of the customer or asset lifecycle.

Uncover additional revenue

Instead of attempting to upsell everything, iasset.com will help proactively analyze your installed base data to anticipate lifecycle events and offer proposals for upgrades, refresh, maintenance, upsell and cross-sell that enable incremental revenue growth. As the relationship with your customer becomes more “sticky”, it will also help to improve your customer retention rates.

Drive decisions with business intelligence

iasset.com offers a powerful suite of reports that will provide deep insights into your business. Our business intelligence dashboards and reports include operational, performance, and adoption metrics such as renewal rates, on-time attainment rates, bookings, pipeline, partner performance, sales rep performance, and more.

Our platform is all you need to protect and grow your business. And our customers think so too, as they consistently achieve renewal rates of over 90%. 

So the verdict is in: tech companies can no longer afford to leave renewals management up to inefficient systems and processes. By adopting a comprehensive solution that’s purpose-built for the IT channel, you can optimize renewals for good. 

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