With such huge revenue and customer satisfaction potential on the line, why are the majority of channel partners not tracking warranty and maintenance service contract data and re-engaging existing clients? Some simply do not recognize the opportunity. An individual maintenance renewal worth $3,000 may hardly seem worth pursuing compared to a new-customer hardware sale. If a partner is missing 10 such renewals a month, however, there is now a revenue stream of nearly $400,000 a year being ignored. Moreover, maintenance is not a one-time sale. It is $400,000 in recurring revenue stream that is being neglected. The channel must take a long view of the data to see the real opportunity.
Unfortunately, achieving a consolidated view of contract data poses a significant challenge. Most partners recognize the potential in service contracts, but obtaining accurate, streamlined visibility into the maintenance data is simply too difficult. For any channel partner, there are expiration’s to be aware of for hundreds – if not thousands – of customer software and hardware assets each month. While the requisite data may physically exist within the organization, typically this complex data is fragmented and un-actionable in form.
In many cases, VARs are using Excel spreadsheets to track their warranty and service maintenance data, and those spreadsheets are frequently siloed by sales representative. Companies are relying on their sales teams to consult the spreadsheet and sort the data into a usable format – a process that’s subject to human error and lack of motivation. Subsequent turnover within the sales force wreaks havoc on an already inefficient process.
As the VAR grows in size, harnessing data becomes even more complicated. Critical financial metrics may be housed in the accounting system, with other contractual details in CRM or sales force automation applications and/or distributor reports. Data is abundant, but the “right” data is hard to find. Companies can typically discern when a sale closed or when hardware shipped, but determining the next opportunity date on those pieces of equipment and the associated value is far more difficult. A single sale may have involved multiple distributors, each with its own report that the sales person must sift through. For most VARs, it requires such time-intensive research to gather all the requisite data for service contract opportunities that all but the most industrious of sales representatives have abandoned the effort.
At the distributor and manufacturer levels, tracking of customer contract data is even more challenging as these companies are two to three levels removed from the actual sale. Manufacturers are typically supplying technology assets to tens of distributors, and distributors are managing relationships with hundreds of VARs. The sheer volume of data alone makes accurate tracking nearly impossible. To exacerbate the issue, products are frequently registered incorrectly – if they are registered at all – leading to sizable gaps in manufacturer data. Manufacturers may know a product was sold, but they have no record of the end customer. They may know the end customer, but not which VAR sold the service. The variations on this theme are many, but the culprit is always the same: lack of a comprehensive, consolidated view of contract data.
Fortunately, there is a solution designed to help the channel solve these data challenges. Intelligent contract management solutions can help companies transform their business by harnessing contract data from multiple sources into a single view and providing actionable intelligence on upcoming opportunities.