Webinar - Why Renew? Boosting Renewals and Up / Cross Sell with Realized ROI
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If you are in technology sales, especially with a legacy solution provider, you know the struggle. Over 70% of established technology providers are now facing flat or declining product revenues, this according to the latest research from the Technology Services Industry Association (TSIA). Purchasing has moved from IT to the business, who only control the budget for their functional areas rather than the enterprise. Price wars and discounting reign. As a result, product revenues have dropped 20% over the past 4 years. As a Cloud / SaaS / Technology provider, you need to be able to effectively drive renewals and up / cross market and sell to achieve revenue growth success. This webcast can help you learn more about this research and how to effectively implement Expand Selling.
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Webinar - Why Renew? Boosting Renewals and Up / Cross Sell with Realized ROI
- 1. Copyright © 2001-2018 Alinean, Inc.Copyright © 2001-2018 Alinean, Inc. Boost Renewals & Up/Cross Sell w/ Realized ROI 1 Dan Sixsmith, Value Consultant dsixsmith@alinean.com http://www.alinean.com @AlineanROI Tom Pisello, CEO / Founder tom@alinean.com
- 2. Copyright © 2001-2018 Alinean, Inc. How is Cloud / As-a-Service Currently Underperforming? 2 15 % Customer churn rate for over 50% of current SaaS / Cloud providers (Pacific Crest) 15 % Additional annual contract value left on the table each year by not effectively up-selling / cross-selling to existing accounts (Pacific Crest) 70 % Of established tech providers are experiencing flat or declining product revenues = 20% over the past 4 years (TSIA)
- 3. Copyright © 2001-2018 Alinean, Inc. Are Existing Customers the Secret to Cloud / SaaS Success? 3 80% of future revenue will come from 20% of your current subscribers (Gartner / CMO) $1.13 $ 0.13 New Customer Existing Customer Cost to acquire new vs. retain existing (Pacific Crest 2016) 10 x Probability of selling to new prospect vs. an existing customer (MarketingMetrics) 5 % to 20 % 60 % to 70 %
- 4. Copyright © 2001-2018 Alinean, Inc. Impact: Focus on New Customers versus Existing Customers + Retention? 4 Fatal rate <5 % >20 % Top performers TSIA Customer Churn Rate In nearly all market segments, the fastest growing companies are “the ones who drive the largest percentage of their revenue from their existing customer base”.
- 5. Copyright © 2001-2018 Alinean, Inc. Is Realized ROI the Answer? 5 Adoption Usage Realized Value? Prove Realized ROI Key Performance Indicators (KPIs) Financial Impact of KPI Changes Business Value vs. Investment Evolve Customer Success from Usage to Realized ROI Before vs. After Solution
- 6. Copyright © 2001-2018 Alinean, Inc. How do you Calculate Realized ROI? 6 KPI: Calls to Service Desk per Year Before Solution After Solution Financial Impact: Cost per Call Business Value Impact Eg. Support Call Savings from Self Service 1,000 500 $24 $24 $24,000 $12,000 $12,000 Investment $ 5,000 Realized ROI 140%
- 7. Copyright © 2001-2018 Alinean, Inc. Realized ROI Example? 7
- 8. Copyright © 2001-2018 Alinean, Inc. How did Splunk do with their Alinean powered BVC / Realized ROI Program? 8As reported over 1 year ago
- 9. Copyright © 2001-2018 Alinean, Inc. Ideas Exploration Evaluation Selection Renewal Why Change? Why Now? Why You? Why Renew? Business Value and the Buyer’s Journey 9 Land and Expand Assure Continued Revenue
- 10. Copyright © 2001-2018 Alinean, Inc.Copyright © 2001-2018 Alinean, Inc. Boost Renewals & Up/Cross Sell w/ Realized ROI 10 Dan Sixsmith, Value Consultant dsixsmith@alinean.com http://www.alinean.com @AlineanROI Tom Pisello, CEO / Founder tom@alinean.com
Notes de l'éditeur
- Many Cloud / SaaS businesses talk a good game when it comes to renewals, but when it comes right down to it, most aren’t doing what they need to in order to retain their precious subscribers. Tell us a little about what the research says about how these Cloud / SaaS businesses are performing?
- For most SaaS businesses, the research proves the better way to grow as via improved customer retention, and leveraging success within these accounts for up and cross-sell opportunities. However, when you examine sales and marketing investments, the typical enterprise SaaS provider remains too focused on recruiting new customers, and as a result, churn is higher than anticipated, with detrimental results on profitability and performance.
- And if you think you can paper over the retention challenge with new customer acquisitions, you could be dead wrong. The TSIA indicates that: “a churn of more than 20% will ultimately prove fatal. To be a profitable, we think churn really needs to be kept to single digits, with top SaaS / Cloud performers experiencing less than 5% per year". (TSIA) n nearly all market segments, the fastest growing companies are “the ones who drive the largest percentage of their revenue from their existing customer base”.
- Assuring Retention through Realized Value So how do you assure these lower churn rates and better capture of existing customer upsell opportunities? At our recent Business Value Summit, David Caradonna and Doug May from Splunk discussed the importance of renewals to Splunk’s amazing growth success, from its founding in 2003 to a $1B annual revenue generator today. As part of their customer success and value groups, Splunk engages with clients, leveraging an interactive Realized ROI tool (powered by Alinean). On a regular cadence, targeted quarterly, the team collaborates with the client to analyze and assure that the customer is achieving and exceeding the expected ROI from their investment in Splunk. The team usually has a benchmark ROI analysis, developed pre-sales (also developed using an Alinean powered interactive tool), and compares the current performance against this baseline to prove that the expected ROI has been achieved and that the investment to date has been a success. Any shortfalls can be triaged quickly with this awareness, and success can be touted by the customer to their executives in order to continue support and assure renewals. It is from this factual value report that renewals are justified. Moreover, the Splunk value team looks for additional ways it can help clients leverage the solution to drive better ROI. Often, Splunk’s clients are ingesting just a few data sets and analyzing these, there are usually many more data sets available that could be leveraged to drive improvements. Splunk uses interactive tools (powered by Alinean) to help highlight these additional data sets and use cases, and quantify the incremental business value that could be achieved by the customer.
- And if you think you can paper over the retention challenge with new customer acquisitions, you could be dead wrong. The TSIA indicates that: “a churn of more than 20% will ultimately prove fatal. To be a profitable, we think churn really needs to be kept to single digits, with top SaaS / Cloud performers experiencing less than 5% per year". (TSIA)
- The Splunk value team is onto something, fueling growth not just by leveraging business value to build the business case in pre-sales engagements, but to prove and improve the realized value for current customers.
- The Bottom-Line As the research proves, the health of your SaaS / Cloud business is directly tied to your ability to retain customers, prevent churn, and up/cross-sell to existing accounts. Assuring retention often comes down to how well your customer understands and can prove the realized business value delivered. And as more scrutiny is paid to renewals this coming year, having quantifiable proof points is more important than ever, to answer the question “Why Renew?”. And the best providers are not only using Realized Value to measure current value delivered. They are using past tangible business value success to project future benefits, by expanding the solution footprint to other solutions and other groups. In fact, Forrester customer success research data indicates “that up-sells increase by 10% of existing revenue by quantifying the value that purchased solutions yield.” How much is your current customer churn and missed upsell opportunities costing your business, and what could a Realized Value program do to address this challenge? Drop us a note so we can show you what we’ve already done for Splunk and other SaaS / Cloud leaders in capturing Realized Value in order to assure retention and drive up-sell success.