Manually managing the IT contract renewal lifecycle comes with an avalanche of consequences. Beyond wasting valuable time and manpower, outdated contract management processes prevent IT organizations from reaching their full revenue potential.
Whether you’re an IT manufacturer, distributor or reseller, getting contract renewal information in front of customers is vital to sustaining a healthy annuity stream. But with limited resources at their disposal, renewal teams are forced to prioritize selling to the top 20 percent of customers (who typically provide 80 percent of a business’s annual revenue), neglecting the majority of clients rounding out the rest.
For IT organizations serious about growing their bottom line, automated quoting solutions can help lock in additional service revenues that otherwise slip through the cracks.
How Automation Reinvigorates the Contract Renewal Processes
Successfully closing maintenance and service contracts hinges on your business’s ability to approach customers at the right time, with the right information. But renewal contracts are nuanced territory. With each customer using different products or services with varying SLAs and renewal cycles, manually managing contract data is like finding a needle in a stack of microprocessors.
Automated quoting tools, on the other hand, offer a simple, “high-touch, low effort” way to get in front of every customer and simplify the path to purchase. These solutions remove the friction from repetitive tasks, such as sending renewal notifications and confirming new pricing information. Instead of sifting through databases looking for accounts nearing their renewal dates, employees can instantly identify and contact customers well before their contracts expire. Automation also frees renewals teams to focus on their most profitable clients without sacrificing high volume, low dollar contracts.
How do you know it’s time to automate the quoting process? Organizations facing a rapid decline in renewal rates – or struggling with rates far below industry standard – are obvious candidates. But missed KPIs aren’t the only signs that you need a revamped approach to contract management. There are multiple scenarios that warrant a switch to automated quoting:
- You’re doubling down on support: Throughout the IT sector, vendors are putting a greater emphasis on their service business to offset shrinking software and hardware margins. Manufacturers need to be able to communicate with customers about new products or upgrades to keep this annuity stream flowing.
- You recently completed a merger or acquisition: Regardless of industry, data is one of the biggest roadblocks to integrating organizations. For IT businesses that house endless product and customer data (typically in different formats and platforms), automated quoting solutions provide an opportunity to create data cohesion from day one
- Your product sales are skyrocketing: A sales spike may be a champagne problem, but it’s not one to ignore. An influx of new customers creates more pressure to scale your renewal efforts, often without adding staff. Automated quoting solutions ensure that renewal teams use their time effectively and no accounts get lost in the shuffle.
What to Look for in an Automated Quoting Solution
With the right tools, organizations can expand their market share and prevent customers from defecting to competitors. Here are three things IT manufacturers and distributors should look for in an automated quoting solution:
- Flexible quoting features: Out of the box solutions are convenient, but they can also be impossible to customize to your business needs. Off the shelf applications struggle to keep up with automating large amounts of service and product data, let alone the complexity inherent in IT channel sales operations. Business leaders should look for quoting tools that can be tailored to all levels of the channel ecosystem, from manufacturers and distributors down to end users.
- Agile and robust software: Automated tools should be agile enough to handle large volumes of contract data and come with customizable features, such as email templates and outbound customer notifications. Your software should grow as your business grows and needs to be robust enough to process variables like contract types, service start and end dates, billing options, different regions and languages.
- Built in the cloud: Compared to on-premise solutions, Software-as-a-Service quoting tools help companies easily scale as their customer and contract base expands. Because SaaS tools update in real time, you can simplify data-sharing across your product ecosystem and ensure information pushed to end users is always reliable. Manufacturers, for example, can provide downstream channel partners with access to valuable customer and product details without manually emailing every reseller in the supply chain.
In any given quarter, there are myriad obstacles that may block IT organizations from capturing the lion’s share of the market – but a broken contract management processes doesn’t have to be one of them. By introducing automation into your renewal strategy, businesses set themselves on a fast track to cultivating loyal customers and recurring revenues.
Learn how MMI’s team of contract management experts can help you tailor a solution to meet the needs of your service delivery and renewal program. Schedule a call with us today!