One of the more fun duties of my job is chairing TSIA’s Partner Advisory Board. This is a group of executives from our partner ranks who gives us input on market dynamics, industry trends, and helps us plan our events and various partner program offerings. I’m very pleased to announce that we have a new board member, Tina Lux-Boim, President & CEO of Managed Maintenance (MMI). MMI’s technology and services are front and center to a number of key TSIA initiatives and “big ideas,” so I wanted to take this chance to introduce Tina to all of you. I recently had an opportunity to chat with Tina about MMI and some hot industry topics, and thought I would share that conversation with you.
John Ragsdale: Welcome to the TSIA Partner Advisory Board! Very happy to have you onboard.
Tina Lux-Boim: Thank you, the MMI team is so excited to be a part of such a forward thinking organization and have the ability to bring more insight to the industry while gaining a deeper knowledge of the landscape ourselves.
John: MMI’s products and services are so strategic to TSIA’s B4B messaging around revenue generation, protecting maintenance revenue, and managing consumption. Could you give us a quick overview of MMI?
Tina: MMI was born in the technology channel, our solutions enable technology manufacturers (OEMs), their channel partners, distributors and service providers to maximize service contract and equipment replacement revenues, and help end user organizations ensure uninterrupted maintenance and support coverage.
ONEview is a globally hosted and dynamic, interactive, web-based SaaS application that allows organizations to maximize recurring revenues through an end-to-end automated solution. In the age of Big Data, ONEview enables executives to eliminate complexity and streamline the contract management and renewal process. MMI’s ONEview application with contract management, consulting, and other value-added services provided by our professional services team and Six Sigma consultants reduces the cost of maintenance, increase productivity, and help suppliers and service providers find new – and existing – revenue not presently at their fingertips. This combination of people, process and technology have allowed MMI to become the preeminent market leader in outsourced asset lifecycle and service contract management among OEM’s world including IBM Contract Management and Renewals, CISCO, HP, and many others.
John: According to my 2014 Global Technology Survey, only 14% of B2B companies currently have a recurring revenue solution in place. However, over a third of companies, 39%, have budget for recurring revenue functionality in 2014-2015. To add insult to injury, some of the popular cloud CRM tools being used today don’t even offer very robust contract and entitlement capabilities, which used to be standard for OnPremise CRM. Are you seeing this demand in your pipeline? What sort of companies do you see as early adopters for more sophisticated tools such as MMI offers?
Tina: Simply stated, yes. We are seeing demand for a cloud based system like ONEview that allows for a closed loop automation of the renewal process starting with the development of an opportunity pushed into ONEview from the clients CRM or pulled from the client’s CRM into ONEview, through quote preparation, client notification, opportunity development and communication and ultimately acceptance of the quote and possible communication to the vendor for solution entitlement. Our pipeline and experience shows the three leaders in adoption of these types of tools to be small start-up manufacturers of hardware and software products, distribution channels of these products and TPM’s or 3rd Party Maintenance and support providers.
John: I used to joke that “services marketing” was an oxymoron, and honestly the same can be said for “service sales” at many tech companies. Our data shows that product sales people are not very effective at selling services, and services people traditionally don’t have the best sales skills. 3 years ago I noticed a trend that some very large tech firms were doing an honest assessment of their service sales and renewal operation, and realizing they needed to look to a third party for help. Unfortunately there aren’t many service providers with expertise in B2B service sales. Luckily MMI has that expertise. Could you talk about some of the common problems you see with tech companies trying to manage service selling and renewals themselves, and how you are able to improve their renewal rates and revenue numbers?
Tina: There are many challenges that MMI sees facing tech companies choosing to pursue annuity based sales through traditional sales team. Let me just touch on a handful.
- Many renewals are high volume, low value transactions at face value. This makes them unappealing for the sales representative to want to invest in. A view that can compile the data so all renewals across each customer can be seen and pursued offers an opportunity for the sales teams to view the renewal sales by customer as a more lucrative sale.
- For most renewals it requires data from 5-7 systems to prepare one (1) renewal opportunity. The time investment for sales team to prepare a quote suitable for presentation is often perceived to be too significant to justify the end sales.
- Tech Companies often have a large “bag of tricks” they are selling. The messaging, presentation and sales of annuity type businesses is often a departure from their core offerings and something many sales teams are not comfortable in positioning or familiar with. With sales teams “coin-operated” they are more likely to gravitate to the solutions and products in their comfort zone and procrastinate or ignore the potential annuity sale.
- Annuity sales often involve on-going management once the sale is completed. if the sale is remain in good standing and be positioned well at renewal time, this kind of sale requires specialists / customer success managers who are comfortable and adept at managing long term on-going client relationships and managing details. They can’t be left to a sales hunter with low patience and interested in the “kill” or final sale as measure of success.
John: Big Data is a big topic with our members, who love the concept of analytics but aren’t always sure how to get started. And, few of them have the resources of a data scientist available to build custom dashboards. I’ve seen some impressive analytics in your ONEview demo. Can you speak to how analytics can inform and empower renewal teams?
Tina: Managing enterprise assets is a complex, confusing endeavor – even for the teams dedicated to doing so. Asset and part data, warranties, and service agreements are often tracked in Excel spreadsheets or in proprietary systems that may not scale or flex with business needs. Staff members spend a good portion of their time performing lower-level tasks such as entering, cleansing, and maintaining detailed data and cannot always guarantee the accuracy of this information. Acquiring accurate, real-time information on enterprise assets is a necessary first step to driving effective asset decision-making and performance.
SaaS applications provide transparency into the corporate asset base by opening the door to big data access and leverage. IT managers can choose to pair high-value assets with RFID and Wi-Fi technology and receive a continuous stream of information on asset location and usage. VARs can harness systems to analyze sales, services, and maintenance data, identifying opportunities to save money for the customer and build their own services revenues.
In the new model of doing business, the entry point can be anywhere, but data is the common thread for designing and delivering customer-centric services. IT resellers can also use their own SaaS portals to identify customers’ emerging needs, manage customers’ global asset portfolios, and build their own maintenance businesses.
Data analytics show that customers notified 120 days in advance are 30% more likely to renew a service or support contract than those notified 30 days or less prior to expiration. It is essential to capitalize on the “golden hour” of contract renewals, or about 90 to 120 days prior to expiration. With enough lead time, IT suppliers can structure sales conversations and tailor services and contracts to customer needs. VARs achieve an average renewal success rate of 80% when they act on customer contracts at least 90 days before expiration.
Those top IT service and warranty performers who invested in technology to improve analytics and management capabilities achieved an 86% customer retention rate and increased contract renewal rates by 4% over the previous 12 months. Those who choose to remain using manual and home-built systems retained just 42% of their customers and a 1% or more decline in renewal rates.
SaaS solutions that allow notifications and on-going communications through automation helps to focus on proactively proposing solutions based on the automated analytics of the big data rather than remaining focused on a one-time sale. Lack of communication and interest by the client can alert the firm of a customer disengagement and allow the seller to put proactive measures in place to “salvage” the customer.
Automation brings greater predictability in terms of volumes and revenue potential. The tools help stabilize sales and revenue cycles. Companies investing in growing their recurring revenue streams grew their business 20% faster with 25% higher profit margins than their peers.
On lower cost more disposable product sets, the early notifications lead to markedly higher hardware sales for companies due to proactive refresh solutions.
John: I’d like to thank you for taking the time to chat with me today, and I look forward to you joining us for the Partner Advisory Board meeting next month!
Tina: John, thank you for including MMI and we are looking forward to bringing value to TSIA and the technology industry in general as well as learning from the best practices of others.