3 Steps to a Data-driven Revenue Lifecycle
How do you create data-driven customer retention processes that deliver both higher renewal rates and a lower cost to serve?
This is the million-dollar question that many companies are looking to answer, and one that we addressed in a recent webinar and the
3 Steps to a Data-driven Revenue Lifecycle whitepaper.
The Return On Investment (ROI)
According to a global study, companies that take a more sophisticated approach to Revenue Lifecycle Management earn 46 percent more revenue to their less mature peers.
The study highlights that data maturity is a key driver of success, particularly in customer onboarding, adoption and retention processes that are critical to the renewal sale. With integrated, accurate and ongoing assessment of customer data, companies can more effectively predict which customers are at-risk to churn or are ready to renew.
In fact, utilizing a data-driven Revenue Lifecycle can yield some impressive results:
- 25% increase in sales productivity
- 1-4% point improvement in upsell and cross-sell revenue
- 2-5% point increase in product refresh
- Increased global visibility into recurring revenue results
- Greater channel and customer satisfaction.
Because of reduced marketing and sales expenses, recurring revenue can be up to twice as profitable as new revenue. If done correctly, it’s estimated that 90 percent of the revenue will come not from the initial sale, but from the renewals, up-sells and cross-sells.
The Challenge – Drowning In Data
Harnessing “Big Data” is top of mind for CEO’s across the globe as it holds enormous potential for business improvement, and Revenue Lifecycle is no exception. But with any big opportunity, there comes some big challenges.
Tackling any project that includes the goal of becoming “data-driven” can be daunting indeed as data is expanding faster then ever. I read recently that it is estimated that 40 zettabytes of data will be created by 2020—40 zettabytes! We are currently drowning in data, but in many ways, we continue to thirst for insights. As we approach the end of 2015, a truly data-driven economy is still emerging. While organizations are exploring big data opportunities and investing heavily in infrastructure and technology, many continue to rely on manual processes and spreadsheets. This is especially true when it comes to Revenue Lifecycle processes.
Why? Even with the rise of recurring revenue business models, companies continue to invest in new customer acquisition. The teams that manage customer support, success and customer revenue continue to utilize data, technology and business processes that are in place to support the initial sale. In order to fill the gap, these teams rely heavily on spreadsheets to manage their day-to-day activities.
How Do You Get Results
To create data-driven Revenue Lifecycle processes, you need ‘RLM Ready Data’ that is accurate, complete and most importantly actionable. The challenge is to obtain such data, which is more difficult than it might first appear.
In simple terms, transformation of your data into ‘RLM Ready Data’ involves these three steps:
- Centralize—Understanding what data is needed and where it resides, and then collating data from different systems so that RLM data is aligned for a comprehensive picture of your customer.
- Galvanize—Analyzing data to identify key value drivers, important milestones, as well as leading churn and loyalty indicators. Then, ensuring that customer engagement is aligned to your brand promise and strategic business goals.
- Operationalize—Increasing team coverage with disciplined processes that use predictive data to drive automated workflow to the right departments. These provide the actionable insights and root cause analysis required to cost-effectively deliver business results for your customer, and for your recurring revenue targets.
Turning your oceans of customer data into valuable, practical and actionable business insight may not be as straightforward as 1-2-3, but it most definitely will provide you with a real business advantage.
Authored by Michele Ballinger, Solution Marketing for ServiceSource.
In her role, Michele provides market insights and best practice advice to customers.
When she is not writing, you can find her hiking and photographing the breathtaking