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A can of corn can only stay on the shelf so long before it loses taste and efficacy. Any cook can tell you it’ll also cost more to make a meal with that “new” can of corn than with ingredients already existing in your pantry and fridge.
The cost of net new sales is exponentially higher than building new business from existing business you already have.
How much more? According to published sources, conservatively, anywhere from five (1) to fifteen (2) times more. Other estimates range to thirty times+ (3). Adding insult to injury, even after you spend money for net new sales, repeat customers still spend, on average, 67% more (3).
Why then, do we place such emphasis on net new sales?
Because the prevailing global business economy puts emphasis on opening more and new markets.
The prevailing entrepreneurial spirit emphasizes creating products and categories no one else has discovered.
Because many of us invest in direct and indirect sales partners, the vast majority of whom have no continuing interest in your relationship with the end customer once they’ve taken their cut.
In reality, we should all keep in mind that when companies identify and respond to loyal customers, companies reduce their customer acquisition cost by 27%. (4)
Like that grocer’s can of corn, all things vegetable, fashion, tech or human have an expected life cycle.
It’s in this third Life Cycle stage, maturity, when your renewal specialists should be introducing your contemporary products, setting up renewal reminders, future updates and upgrades. As well as reminding your install base your company’s served them well before and will do all you can to continue serving them well for the future.
If you’re using a spreadsheet, CPQ or CRM system to manually find, track, correct and remind everyone of renewal dates, if you depend upon your Renewal Specialists to manually spiff original sales people/vendors/distributors and/or make sure existing customers know what new tricks your company has up its sleeves that will most benefit them, I’d say he or she is more than ready for a vacation.
If, however, you implement a smart, relevant automated business process that follows product life cycles as well as customer, contract, sales and distribution data, your Renewal Specialist will have a partner feeding them all the info they need to hit (even exceed) that 67% (1).
Although most companies focus their sales effort into net new, a product’s life cycle proves that except in the case of absolute start-ups, significant effort should be applied to a revised sales and product cycle. A revised cycle for which that 27% lower cost of sale says a lot. Expand with what you’ve got and the profits will increase.
Perhaps not as simple as looking for that can’s expiration date, allowing your product life cycle to work through your automated renewals process, channel partners, direct sales, etc. to your Renewal Specialist will still make sure your relevancy to current, and net new, customers stays as fresh as that corn was when picked.
Today’s businesses, especially as we move more into the cloud and annuity sales, need to make sure they have the automated tools they need. And that they’re taking full advantage of those they already have.
An automated Renewals Management Platform can do that and much more. Isn’t it time you made sure you’re taking advantage of your customers’ product life cycles so you can continue to turn them into your own?
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