Success Marketing and Portfolio Management

Success Marketing and Portfolio Management

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Success Marketing and Portfolio Management

Technology service programs are evolving to offer new value and benefits such as use and adoption assistance and resources to help attain successful outcomes. As technology service programs change, service, support, and success marketing must evolve beyond selling the initial service engagement and focus on sustaining and growing relationship value.

Success Marketing and Portfolio Management

Technology service programs and offerings must evolve, and companies need to look beyond service marketing to focus on Success Marketing and Portfolio Management.

Success Marketing and Portfolio Management consists of the practices and activities necessary to create end-to-end, integrated success-focused programs capable of delivering a value-based message to promote adoption and attainment of tangible customer outcomes that sustain customer relationships and promote opportunities for growth.

The Subscription Impact on Service Programs

The very definition of technology service offerings is evolving.  Service entitlements that were once included as foundational elements of a service program may now be included as part of a product or subscription purchase. 

Standalone service programs delivered by siloed services departments such as Professional Services, Training and Support are increasingly offered through integrated success-focused service portfolios.  Success-focused service programs may complement or fully displace legacy service and support offerings. The nature of how customers purchase services is evolving too. Support programs attached to license sales and professionals service engagements sold as custom time and materials engagement are displaced by integrated a-la-carte success services that may be purchased as add-ons or obtained by service credits.

Success Marketing and Portfolio Management Defined

Success Marketing and Portfolio Management consists of the practices and activities necessary to create end-to-end, integrated success-focused programs capable of delivering a value-based message to promote adoption and attainment of tangible customer outcomes that sustain customer relationships and promote opportunities for growth.

There are eight fundamental success marketing practices.  Several of these practices extend the focus and scope of traditional service marketing responsibilities.  The expanded scope of Success Marketing must include the following:

  1. Customer Segmentation Strategy
  2. Ongoing Customer Needs Assessments
  3. Service Program Design Methods
  4. Portfolio Management
  5. Value Quantification
  6. Sales Enablement
  7. Marketing Tools and Resource Development
  8. Retention and Growth Planning

Treat Your Service Portfolio as a Product Line

Treat Your Service Portfolio as a Product Line

Service and success programs are a significant source of revenue. To assure that they yield their maximum revenue potential they must keep pace with customer needs and expectations.

Formal Product Management of Service Portfolios

Treat service portfolios as valuable offerings by assigning dedicated program management resources to keep offerings up to date and relevant. Consider the following:

Develop service and success portfolios that span delivery silos (Support, Success, Education, Professional Services, etc.).

 

Assign a full-time dedicated product manager to lead program management activities for the service / success portfolios across service disciplines and related product families.

 

Establish goals and objectives for the service program manager based on performance and revenues directly associated with sale and renewal of service and success offerings.

 

Grow the team of portfolio product managers to keep pace with the size, complexity, and financial performance of the service portfolio.

 

To assure that your service and success portfolio remains relevant to customer needs review and update offerings on an ongoing basis.  Consider adding new offerings and enhancements as customer needs evolve.  Be certain to define and articulate the value of all offerings and reinforce service benefits to help sustain customer relationships.

Featured: Success Marketing and Portfolio Management

The eight fundamental Success Marketing and Portfolio Management practices are defined and described within this report.

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Support Pricing Benchmarks

Support Pricing Benchmarks

Setting the correct price for your support programs begins with a baseline understanding of what your market will bear but ultimately the price must be based on the type and level and entitlements offered. The average prices for support programs range from 15.6 percent for a basic level of support to more than 26 percent for a high-end premium offer.

Support Program Price

The average prices for support programs range from 15.6 percent for a basic level of support to more than 26 percent for a high-end premium program.  Prices vary based on the entitlements offered and the ways that pricing is structured.  Here are a few considerations:

Net vs. List

Pricing may be based on the percent of a products’ list price or the net price after discounts.

Add-on’s and Fixed Fees

Some support program consists of a fee tied to the percent of product list or net price plus fixed fee add-ons.  Add-ons are often associated with optional entitlements such as named support resources such as designated support engineers and/or account managers.

Adjustment Fees

The price of support in the first year is often not the price a customer will pay in subsequent years.  Support prices typically include annual adjustment fees to account for inflationary factors.

Pricing by Support Program Tiers

Support pricing is typically established by program level or tier.  It is not uncommon for support portfolios to consist of two or more tiers with names like Silver, Gold and Platinum.  Although support programs may sound alike, they often vary from vendor to vendor.  For the purposes of establishing baseline pricing benchmarks ServiceXRG has normalized support programs into the four distinct tiers described below.  Classification is based on the underlying program entitlements and not on the program names.

Support Program Tier Classifications

Average Support Program Price

Establishing Support Prices

The price of support must be set at a level sufficient to cover delivery costs, yet not too high to discourage customers from buying.   Customers are likely to have preconceived ideas about what support should cost based on experiences they have with working with other technology vendors.  If your “gold” support is priced at 23% of product list price but other vendors are priced at 18%, customers may perceive that your prices are too high even though you offer more for the price. 

It is imperative that you price support reasonably so that you can make a compelling case that the benefits outweigh the costs to the customer.

Support Value Proposition

Setting the right price for support will influence your ability to sell and renew support programs.  As you consider price levels be cognizant of the support value proposition.  Support programs must include the entitlements customers want and need and be offered at a reasonable price level.

Are Your Support Offers and Pricing Competitive?

We can help you develop, modify, or price your support portfolio.  We provide best practices and competitive insights to help you build the Support programs your customers want.

Contact ServiceXRG today.

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Support or Success – What Type of Post Sales Service Portfolio Do You Need?

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Support or Success – What Type of Post Sales Service Portfolio Do You Need?

Support or Success – What Type of Post Sales Service Portfolio Do You Need?

It Is Time to Move Beyond Support Portfolios

Support and maintenance portfolios have been the foundation of many post-sales service offers, yet Support offers alone are no longer adequate to sustain and growth customer relationship value.  Modernization of support portfolios and the evolution to success-focused programs and offers is the future of post-sales service portfolios.

Support Versus Success

If you are creating or modernizing a post-sales portfolio that offers customers more than reactive problem resolution assistance you are likely building a success portfolio.

Success portfolios differ from support portfolios because they offer services typically beyond the scope of technical support and often include services and resources from departments such as Training, Professional Services and Technical Support.

The focus and intent of post sales services programs help to define the type of portfolio you are building and suggests what entitlements to package and offer to customers.  Use the table below to consider what the focus and intent of your post service offers should be.

Support

Success

  • Services focus on responding to, diagnosing and resolving issues.
  • Services are designed to increase supportability by helping customers use and administer products more effectively. 
  • Tools and services monitor issues and provide recommendations or corrective actions to mitigate problems.
  • Speed, effectiveness of response and customer satisfaction are key indicators of success.

 

  • Services focus on helping customers use the full functionality of a product. 
  • Consultation and guidance through high-touch and tech-touch.
  • Onboarding, adoption and success planning services offered.
  • Services focus on helping customers to achieve tangible business outcomes.
  • Product use, customer success, retention and growth of recurring revenue are key indicators of success.

 

Note: Success Portfolios often include support services, but Support portfolios do not include services beyond traditional issue resolution entitlements.

Characteristics of Leading Post Sales Service Portfolios

Well-defined post-sales service portfolios with up-to-date and customer-driven service entitlements can significantly increase your ability to help customers use and apply products.

Market leading service portfolios are well structured to offer differentiated service rights, entitlements, and resources to deliver maximum customer benefit.  World-class service portfolios offer:

  • Access to skills, resources and expertise from across all service departments including Support, Professional Services, Education and Success.
  • Flexible program structure and purchase options provide access to the services customers need when they need it even as their needs evolve.
  • Expert assistance to drive tangible outcomes and achieve quantifiable benefits for the price paid.

Take Your Services to the Next Level

Is it time to update your Support portfolio or add Customer Success programs extensions and add-ons? Give us a call. We can help you define, price, and launch successful new service offers.

Contact us today.

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read more

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Service and success programs are a significant source of revenue. To assure that they yield their maximum revenue potential, treat service portfolios as strategic offerings in the corporate portfolio by assigning dedicated program management resources.

read more

Support Pricing Benchmarks

Setting the correct price for your support programs begins with a baseline understanding of what your market will bear but ultimately the price must be based on the type and level and entitlements offered. The average prices for support programs range from 15.6 percent for a basic level of support to more than 26 percent for a high-end premium offer.

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Stop Selling Support and Start Selling Success

Stop Selling Support and Start Selling Success

It is no longer enough to attach a support program to a product sale. Effective Success Sales teams must be able to establish long term service relationships that last and grow well beyond the initial sale.

Success Sales Effectiveness

Success sales effectiveness is optimized when Sales teams are knowledgeable of service programs and can articulate a compelling value proposition for long term service benefits.  To maximize sales effectiveness, companies must establish formal success training programs.  Consider the following:

Establish a formal success sales curriculum to instruct sales representatives responsible for selling services (direct and through partners).

Instruct sales teams in the identification of success opportunities.

Provide opportunities for instructor led classroom and virtual training.

Supplement core training with periodic updates delivered through self-paced instructional videos and/or periodic live webinars.

Include coverage of core offerings, value proposition, use cases and overcoming objections.

Supplement sales training with supporting tools and reference materials.

Establish competency-based testing to verify sales representative knowledge. (internal sales staff and partners).

Assure that all service sales staff have been full trained, and their knowledge tested.  Monitor sales effectiveness by measuring initial service contract sales (attach), renewal rates and the rate that service revenue grows from expansion selling.

For additional insights into how to effectively market and sell services, consider the following featured report:

Featured: Success Marketing and Portfolio Management

The eight fundamental Success Marketing and Portfolio Management practices are defined and described within this report.

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*Membership level determines your access to ServiceXRG research and other member services. Paid memberships include access to research and playbooks. Free memberships include access to some reports and discounts to others. Please visit our membership page for a list of available membership programs.

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How to Measure Net Recurring Revenue

Net Recurring Revenue is a comprehensive indicator that reveals the extent to which you are retaining, expanding and growing customer relationship value. Examining the specific underlying elements that contribute to the calculation of Net Recurring Revenue provides the necessary insights to identify the root causes of churn, attrition and contraction. In addition, examining the reasons for revenue growth presents opportunities to embrace and expand practices that encourage expansion of relationship value.

read more

Success Marketing and Portfolio Management

Technology service programs are evolving to offer new value and benefits such as use and adoption assistance and resources to help attain successful outcomes. As technology service programs change service marketing must evolve beyond selling the initial service engagement and focus on sustaining and growing relationship value.

read more

Treat Your Service Portfolio as a Product Line

Service and success programs are a significant source of revenue. To assure that they yield their maximum revenue potential, treat service portfolios as strategic offerings in the corporate portfolio by assigning dedicated program management resources.

read more

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Setting the correct price for your support programs begins with a baseline understanding of what your market will bear but ultimately the price must be based on the type and level and entitlements offered. The average prices for support programs range from 15.6 percent for a basic level of support to more than 26 percent for a high-end premium offer.

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Should you charge for support?

Should you charge for support?

If you want to make money from support, you need to charge for it and most technology companies do.

Should you charge for support?

The majority (89.7%) of technology companies offer some form of fee-based support option. Not all support programs are the same – some are extensive with many choices for the customers to select while others are limited in scope. Fee based support options are not always presented to the customer as a choice. In some cases, the support fee may be bundled within the product price or included as a compulsory first year option. Very few companies offer free support.

The starting point for this discussion is that Support should be sold. A well-defined support offering is far too valuable for both customers and the company offering it. For customers, support is a means to gain access to the expertise they need to help them apply the product to its fullest potential. For the product vendor, good support it too costly to give away and the financial benefits of the ongoing annuity are too attractive to not pursue.

Sell Support Unless:

  • Your product or service is so simple there is no reason a customer would need assistance.
  • Your market is so competitive that introducing fee-based support would create a significant competitive disadvantage.
  • Your product is used at a time or in a way that there is no practical way to deliver support.

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Technology service programs are evolving to offer new value and benefits such as use and adoption assistance and resources to help attain successful outcomes. As technology service programs change service marketing must evolve beyond selling the initial service engagement and focus on sustaining and growing relationship value.

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Treat Your Service Portfolio as a Product Line

Service and success programs are a significant source of revenue. To assure that they yield their maximum revenue potential, treat service portfolios as strategic offerings in the corporate portfolio by assigning dedicated program management resources.

read more

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Setting the correct price for your support programs begins with a baseline understanding of what your market will bear but ultimately the price must be based on the type and level and entitlements offered. The average prices for support programs range from 15.6 percent for a basic level of support to more than 26 percent for a high-end premium offer.

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