Today’s technology companies are caught in a paradigm shift. With businesses competing for the lion’s share of the market, the focus of most IT channel partners is on nurturing high-volume, low-dollar contracts. Relying on a few high-margin deals is no longer enough – renewals are much easier to secure than netting new business, and can help businesses grow their bottom line.
Market dynamics and a crowded industry are pushing manufacturers, distributors and resellers towards an annual recurring revenue (ARR) business model. But adopting an ARR model can be challenging for organizations with internal teams operating in silos. Today, the customer journey is a disjointed process that can leave money on the table. To take advantage of these untapped revenue opportunities, sales and renewals teams need to collaborate with one another to deliver the best customer experience possible.
The need for a unified sales strategy has inspired a movement toward “customer success” – an integrated approach to securing, educating and retaining clients. To support this emerging mode of client engagement, technology providers will be tasked with uniting previously independent internal teams and navigating the inevitable change management.
The Rise of Customer Success
In a traditional sales model, each department’s responsibilities are clear cut. Internal marketing teams generate initial leads which are then passed to sales reps, who guide the customer through to the point of sale. The renewals team steps in after a customer makes a final purchase, strengthening the relationship by upselling products and keeping customers engaged. An organization’s customer service team provides clients with technical support, offering tactical end user guidance around specific products or services.
The problem with isolated teams is the miscommunication that follows once a customer enters an IT company’s ecosystem. The majority of these businesses lack interdepartmental visibility into the customer journey, creating gaps in their ability to quantify, share or act on critical sales data. Poor visibility can result in sales teams reaching out to customers at the wrong time, or renewals teams failing to send notifications when a contract is set to expire. Rigid workflows can also slow the generation of service contracts and the cross-selling of features like managed services. Turning quotes into contracts can take days (or even weeks), exposing manufacturers, distributors and resellers to the potential for high churn.
This is where customer success comes in. Unlike customer service, customer success is a proactive strategy aimed at helping customers reap the most value from your offerings. It’s a process that combines marketing, sales and renewal efforts to attract new clients and keep current customers invested. Customer success teams depend on real-time visibility into client needs and usage in order to thoughtfully grow the relationship.
Customer success is a holistic approach that forces technology providers to rethink their engagement models. As organizations adopt a customer success mentality, the lines between their service and sales teams will begin to blur. Account management and service representatives will soon share the responsibility of driving revenue with the sales teams, and marketers won’t be the only ones in charge of lead generation. In addition to securing contract renewals, customer success can help organizations identify the various hardware and software assets they need to effectively manage their customer data.
All tiers of the IT channel, from manufacturers to distributors, have a lot to gain from embracing a customer success model, so long as they’re equipped to handle the growing pains that accompany the transition.
Simplifying the Switch to A New Sales Model
The evolution of customer success is a notable departure from the IT sales status quo, one that forces organizations to rethink internal roles, processes and ways of measuring success. To ease into a customer success strategy, companies should turn to automated renewal solutions. Automated tools that serve as primary repositories for sales and contract data eliminate confusion as IT sales, service and marketing teams collaborate on generating recurring revenue.
As customer account management becomes a shared responsibility, manufacturers will need tools that promote knowledge sharing so all teams can contribute to the client relationship. For instance, a tool that provides a centralized dashboard increases transparency into customer sales data so every representative understands where customers are in their purchasing journey. Sales representatives can check on a customer’s activity via a shared platform, eliminating the need for extra meetings and email threads and reducing time to acquisition. Automation also alleviates the burden of manually crafting proposals and quotes so customer success teams can focus on driving actions (i.e., cross-selling features like managed services and cloud-based software) that contribute to future revenue.
A degree of pushback may be inevitable when tiers of the IT channel attempt to unify different teams within the sales process. Appointing a C-level executive to openly sponsor the initiative and communicate its cost and efficiency benefits can help drive top-down adoption. With automated tools in place, the shift to customer success primes renewal teams to capture low-dollar, high-volume service sales that were once too expensive to address manually, and frees sales leaders to spend more time on net new deals
Traditional IT sales operations are no longer enough to capture the high-volume contracts channel partners need to sustain recurring revenue streams. As technology organizations embrace customer success strategies to spur bottom-line growth, they’ll need a plan and tools in place to ensure old habits don’t derail lucrative opportunities.