Take These Proven Actions to Scale Support Delivery

Take These Proven Actions to Scale Support Delivery

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Take These Proven Actions to Scale Support Delivery

The future success of your Customer Support organization relies on your ability to scale Support delivery. By taking these five actions, you can effectively scale Support delivery to not only meet the expected demand growth, but also fulfill an expanded, Success-focused mission.

When you can scale Support delivery, your team can add more value.

I have blogged previously about my POV regarding Support demand in 2021 and beyond (spoiler alert: Support demand will increase). While increased demand presents an opportunity for Support to take on more high-value customer engagement activities, it first requires increases investment in diversified, targeted actions that will enable Support delivery at scale. Focus on these four action areas that have been proven to drive results.

  1. Prevention – Support must take the lead in identifying the root causes of support demand and aggressively advocate for mitigation of these circumstances. Support must work with Engineering groups to improve product performance and usability issues and work across the company to promote effective customer onboarding and skills development activities. Read more about 7 Strategies to Prevent Support Cases.
  2. Self-Help – Support teams represent a repository of product expertise and must work to make their knowledge available to customers. Many new support cases can be avoided if customers are able to access the knowledge and expertise of Support. Transferring knowledge to customers to help them become more self-sufficient should be high on the list of strategic imperatives for all Support organizations. Read more about 9 Best Practices to Help Customers Help Themselves and Maximizing the Return on Your Support Knowledgebase.
  3. Proficiency – Companies need to look beyond just helping customers help themselves and consider how they can build customers expertise so they can use and apply products more competently. Proficiency will require companies to move beyond a reliance on self-help-focused strategies and invest in building the foundational technical and business skills customers need to apply products successfully. Read more about 10 Strategies to Build Customer Proficiency to speed product adoption and descrease demand on Support.
  4. Automation – Support has always been a labor-intensive function that relies on the skills of product experts. Support cannot scale based solely on human power. Read more about 5 Ways to Automate Service Delivery.

 

 

Want to better understand Support demand trends? Download our research.

Are you ready for the challenges your Support organization will face in the year ahead?  Are you ready to capitalize on new opportunities?  How will you scale and transform Support?

For insights about how Support is changing and the opportunities and imperatives for 2021, download ServiceXRG’s latest study: Support Transformation: The Guide to Essential Practices and Metrics. It examines current trends in Support delivery and offers tangible guidance for Support, Success and Service professionals to meet growing expectations of both customers and company executives. Download your copy now.

Make your plan to meet the Support demand in your organization—we can help.

ServiceXRG provides coaching and guidance to help companies maximize customer value through better Support performance. Contact us anytime to set up an initial assessment of your Support planning needs. Use the chat button at bottom right, send an e-mail, or click on my calendar to schedule a specific time.

 

Support demand is on the rise. What’s your response plan?

Download the ServiceXRG Whitepaper:

Four Imperatives for Scaling Support

Download Four Imperatives for Scaling Support and discover:

  • The most effective approaches to scaling support — proven in high-volume support organizations.
  • The 4 top strategies to scale support and reduce demand.
  • The best practices that make these strategies effective.
  • The metrics that enable precise tracking of your efforts to scale support.
Download the ServiceXRG whitepaper, "Ensuring a Successful Journey to Customer Success"

Recurring Revenue Rate

Recurring Revenue Rate

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Recurring Revenue Rate

Recurring Revenue Rate provides an indication of how much recurring relationship value you are retaining, growing or losing. It’s a crucial metric of how well your Support organization is reaping the benefits of the subscription model. Here’s how to calculate recurring revenue rate.

What is Recurring Revenue Rate?

Recurring Revenue Rate indicates the percent change in the amount of recurring recurring revenue at the end of a specified period compared with the recurring revenue at the beginning of the same period.

Support and Success leaders can apply recurring revenue rate to a specific timeframe (e.g. quarterly or annually), or to tracking Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR). It’s an essential metric of the financial health of recurring revenue relationships such as service contracts and subscriptions.

(An important note: Unlike Contract Renewal Rate, where 100% is the maximum performance level, recurring revenue rate can exceed 100% —  indicating that the value of an existing relationship, or the net value of all recurring relationships, has increase from the previous period.)

How to calculate Recurring Revenue Rate

The formula is a simple ratio:

Recurring Revenue Rate = Recurring Revenue at End of Term / Recurring Revenue at Beginning of Term

Let’s apply it to a very basic example, calculating the recurring revenue rate for Q1:

Recurring Revenue Beginning Q1 = $100

+ Recurring Revenue Added in Q1 = $50 ($45 from new customers + $5 from expansion of existing relationships)

Recurring Revenue Lost in Q1 = $30 ($25 due to customer churn + $5 due to downgrade of existing relationships)

 

Recurring Revenue End Q1 = $120

 

Recurring Revenue Rate = 120% (20% growth)

How effectively are you managing and maximizing recurring revenue?

I’m here to help you get the answers you need.

Reach out anytime to get answers and insights about the best ways to engage and retain your customers. Use the chat button at bottom right, send an e-mail, or click on my calendar to schedule a time to talk.

New, high-return revenue streams are waiting to be unlocked.
Here’s the key.

Exclusive ServiceXRG Whitepaper:

Using Services to Retain & Grow Recurring Revenue

Download the ServiceXRG whitepaper: Using Services to Retain and Grow Recurring Revenue

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Seven Engagement Practices for a Successful Sales-to-Service Handoff

Seven Engagement Practices for a Successful Sales-to-Service Handoff

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Seven Engagement Practices for a Successful Sales-to-Service Handoff

Whether Sales in your organization is the responsibility of partners or a direct sales team, those responsible for selling and closing new business create the first impression of your product or service. A successful sales-to-service handoff is essential to maintaining that positive impression and promoting long-term customer success. To accelerate time-to-value, sustain customer relationships, and lay the groundwork for recurring revenue, leverage these seven proven practices for sales-to-service handoffs.

Effective customer engagement begins with the Sales process. This is when your organization identifies each customer’s desired outcomes and aligns its product and available services to them. In a successful sales-to-service handoff, Sales and Service need to collaborate so they can ensure that customers can successfully onboard, adopt, and realize the value of their purchase.

 During the pre-sale process Sales should invite Service to collaborate to help identify needs and formulate the right solution for the customer. However, Sales does not typically invite Services into the Sales process and in this case, Services needs to advocate for being part of the pre-sales process. Through this collaboration there is higher probability that customers will get what they need to be successful.

 The collaboration and information transfer should be complete and seamless—during the pre-sale process the Service team should know everything about the customer that the Sales Team knows.  And customer should not be expected to provide Service with information they’ve already given to Sales.

 

These 7 practices are proven to ensure successful Sales-to-Service handoffs:

  1. Establish clear expectations for the roles of new-sales and post-sales teams. Ensure that motivations and incentives are equally focused on closing new business and retaining existing customers.
  2. Provide information to Sales teams about service programs available to help customers adopt and use products.
  3. Help Sales teams understand pricing and discounting policies, prerequisites, and any other considerations for frictionless service sales.
  4. Create Customer Success-focused engagement teams and resources to help customers understand not only the product features but how they can apply products to achieve their business objectives.
  5. Involve the Service team during the Sales process to help understand and validate that customer expected outcomes can be delivered post-sales.
  6. Formally transition newly acquired customers from Sales to designated Support or Customer Success resources.
  7. Begin a formal onboarding process based on expectations set in during the Sales process.

How effective is your Sales-to-Service handoff process?

We can help you make it better.

Reach out anytime to get answers and insights about the best ways to engage and retain your customers. Use the chat button at bottom right, send an e-mail, or click on my calendar to schedule a specific time to talk.

Ready to commit to a Customer Success strategy? Learn the 5 critical milestones.

Exclusive ServiceXRG White Paper:

Ensuring a Successful Journey to Customer Success

Download the ServiceXRG whitepaper, "Ensuring a Successful Journey to Customer Success"

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Recurring Revenue Rate

The amount of recurring revenue a company receives may increase, stay the same, or decline for a given period. Recurring Revenue Rate indicates the percent change in the amount of recurring revenue at the end of a specified period compared to the recurring revenue at the beginning of the same period. Measuring recurring revenue rate is essential to help identify the factors that lead to revenue retention and attrition and provides an indicator of the overall state of customer relationship health.

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SURVEY: Top Tech Service Challenges for 2021

SURVEY: Top Tech Service Challenges for 2021

SURVEY: Top Tech Service Challenges for 2021

Welcome to 2021!

2020 was quite a year!  What’s in Store for 2021?

What do you consider to be the top challenges for your service organization in the year ahead? Hiring, training and retaining staff? Transitioning to a subscription model? Implementing new service technologies? Redefining your service portfolio? Adopting success practices? Satisfying and retaining customers? Expanding revenue?

Take a minute to share your thoughts about the top issue(s) you are facing.  All responses are confidential.

How Much Should You Charge for Support?

How Much Should You Charge for Support?

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How Much Should You Charge for Support?

How much should you charge for Support?  It’s a driving question as your organization seeks to drive recurring revenue growth. And it’s a balancing act. Setting the correct price for your Support programs begins with a baseline understanding of what your market will bear. Ultimately, though, you must base your pricing on the type and level and entitlements you offer. Let’s explore a Support pricing model that’s been shown to work equally well for businesses and their customers.

Calculating Average 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 a percentage of either a product’s list price or its net price after discounts.

Add-ons and Fixed Fees

Some Support programs consists of a fee tied to a percentage of either product list or net price plus add-ons.  Add-ons are often associated with optional entitlements such as named support resources (i.e., 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 how much (or how little) Support should cost based on their experiences with other technology vendors.  If your “gold” support is priced at 23% of product list price but other vendors price that level at 18%, customers may perceive that your prices are too high — even if 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.

Making the Case for Services

Selling services demands that you establish a credible and compelling value proposition built upon the entitlements customers want and need from services balanced with a reasonable and justifiable price level.

We’re here to help.

Reach out anytime to start your own conversation about Support pricing, recurring revenue and customer relationship value. Use the chat button at bottom right, send an e-mail, or click on my calendar to schedule a specific time.

 

Fresh, authoritative, actionable insights for Support leaders

Exclusive Research Report:

Support Transformation: The Guide to Essential Practices and Metrics

Download the ServiceXRG Support Transformation 2021 research report

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Is It Time to Modernize Your Service Portfolio?

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Three Critical Metrics to Retain and Grow Customer Relationship Value

Three Critical Metrics to Retain and Grow Customer Relationship Value

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Three Critical Metrics to Retain and Grow Customer Relationship Value

​If you inventory all the metrics used by your customer-facing organizations – Sales, Marketing and Service – you’ll find an impressive collection of data elements that describe how you interact with your customers. But with all your customer metrics, what do you really know about your customers? How do you assure that you can sustain and grow relationship value? These 3 critical customer relationship value metrics can point the way.

Marketing metrics describe the ability to reach and influence customers.

Sales metrics provide insights into the time and efficiency to book revenue.

Service metrics describe the volume, timeliness, and effectiveness of interacting with them.

Add to this the insights provided from customer satisfaction assessment efforts.  As an industry we have a lot of customer data, but does it tell us everything we need to know about how to engage and sustain long term profitable relationships?

We know how much effort it takes to reach and influence customers, the time it takes to convert prospects to buyers and the time, effort, and costs to service customers.  These are all important, yet too many customer metrics focus on the transactional aspects of the customer relationship—volumes, speed, and efficiency. Too few of them focus on examining the quality of our relationships.

Now we’re not saying you should stop tracking transactional customer metrics!  BUT consider adding the following measurements to examine the strength and quality of your customer relationships:

Critical Customer Relationship Value Metric #1: Adoption

Adoption tracking provides important insights into the frequency and extent of customer product use.  Customer adoption metrics answer questions such as: Are your customers using your products?  Are they using them to the fullest extent possible?  It seems counter intuitive that customers would not use what they buy, but for many reasons lack of license utilization or under utilization occurs.

Why Adoption metrics matter

If customers are not using what they have already paid for or are not able to apply products to their business, then future subscription renewals or license sales are in jeopardy.

What to measure

Whether through automated tracking or customer surveys, it is important to understand if, how and to what extent your customers use your products.  Consider the following metrics:

  • Adoption: The percentage of licenses sold that are being used.
    • Metric: % of licenses adopted
  • Adoption Extent (Feature Adoption): The features are customers using.  Are they using a basic set of available features or do they take advantage of advanced capabilities?
    • Metric: % of basic users
    • Metric: % of advanced users

How to use Adoption metrics

If you determine that customers are not using what they already have, the next step is to determine why.  Are products too complex? Do customers lack necessary skills? Are products not aligned to customer needs?  The sooner you understand the barriers to full adoption, the sooner you can take corrective actions through services, training, or product enhancements to drive higher product and feature adoption rates.

Critical Customer Relationship Value Metric #2: Success

Customer success tracking builds upon Adoption and examines the extent to which customers realize tangible benefits from your products. Customer success metrics answer questions such as: Do customers consider your products to be integral to their business?  Are they able to apply your products to meet their business goals and objectives?  The very health of your customer relationships depends upon your customers ability to apply your products to drive success with their business.

Why Success metrics matter

Even with 100% adoption rates, it is possible that customers fail to achieve the outcomes they want with your products.  Understanding the extent to which a customer can positively affect their business with your products is a critical indicator about the overall health of the relationship.  Customers that indicate positive impacts from products are far more likely to continue or expand their relationship with you.  Customers that fail to meet performance objectives are at risk of lower spending or ending their relationship with you.

What to measure

Success can be a subjective measure, yet the perception of success is the basis upon which real decisions are made.   Success measurement is most effective when there is a mutually established definition of success.  Companies that work with customers to develop success plans and journey maps with measurable outcomes can track progress to plan.  Success can also be measured as the return on the original investment in a product.  The most subjective metric is based on asking customers to express the extent to which they believe they have benefited from the use of a product.  Although not ideal, this approach provides insights to alert you to situations where negative perceptions may impact customer relationships.

Consider the following metrics:

  • Success Plan Realization: The percentage of an established success plan that has been realized.
    • Metric: % Success rate
  • Return on Investment: A tangible measure to indicate the payback from the investment in a product over an established timeframe.
    • Metric: ROI
  • Success Perception:
    • Metric: % positive impact (success rate)
    • Metric: % Neutral impact
    • Metric: % None or negative impact

How to use Success metrics

Getting customers to adopt products is just the beginning of long-term profitable relationships.  You need to be able to help customers realize tangible positive benefits from product use.  Regardless of how you measure success you must be cognizant of when you fail to meet customer expectations.  The very practice of measuring success suggests that you are attempting to establish a baseline understanding of what customers need or want from the use of your products.  When you understand customer expectations and detect that your products have not met them, you can examine the reasons why and develop corrective actions to increase success rates.

Critical Customer Relationship Value Metric #3: Retention

How many of your current customers do you keep? How long do you retain established relationships?  While adoption and success tracking provides insights into the health of a customer relationship, they do not explain all the reasons for churn in your customers base.  Retention examines the rate and duration that you sustain customer relationships and provides an opportunity to identify and examine the reasons for lost relationships,

Why Retention Metrics matter

For many companies most revenue comes from existing customers, thus keeping the customers you have is imperative.

What to measure

Retention is a straightforward metric when you establish a clear definition of what it means to retain a customer.  For our purposes retention is defined as active, revenue-generating relationships.  This is clear for subscription-based / SaaS relationships, but less so for relationships based on perpetual licensing.  When SaaS customers stop paying for their subscriptions they lose their ability to use the product or service they subscribed to.  Perpetually licensed software is different.  A customer can continue to use a perpetually licensed product but pay no maintenance fees, nor purchase any future products.  Retention examines the net number of revenue-generating customer relationships from one period to the next.

Consider the following metrics:

  • Customer Retention (perpetual and subscription): Revenue-generating relationships carried over from previous period (e.g. year to year or quarter to quarter).
    • Metric: % Customer Retention rate (relationships)
  • Net Revenue Retention (perpetual and subscription): Net value of existing contracts carried over from previous period, plus new revenue and less losses (e.g. year to year or quarter to quarter).
    • Metric: % Net Revenue Retention rate

How to use Retention metrics

Retention analysis informs about the stability of your customer base.  You can strive to get your customers to adopt products and be successful with them.  Even then, you cannot prevent all existing customers (or contract value) from going away.  You must however be vigilant and monitor customer retention rates and examine the reasons why you lose customers and revenue (e.g. you may keep a relationship, but at a lower value).  Only when you understand why you lose customers can you act to retain them.

Your Goals: Retention, Growth and Long-term Profitability

We know a lot about customers, but let’s make certain that we understand the foundations of successful customer relationships.  By measuring the extent to which customers adopt and use our products successfully we can identify situations where products fall short in fulfilling their needs and expectations.  With these insights we can take corrective action to minimize churn and identify ways to retain and expand existing relationship value.

We’re here to help.

Reach out anytime to start your own conversation about recurring revenue and customer relationship value. Use the chat button at bottom right, send an e-mail, or click on my calendar to schedule a specific time.

 

Ready to commit to a Customer Success strategy? Learn the 5 critical milestones.

Exclusive ServiceXRG White Paper:

Ensuring a Successful Journey to Customer Success

Download the ServiceXRG whitepaper, "Ensuring a Successful Journey to Customer Success"

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Recurring Revenue Rate

The amount of recurring revenue a company receives may increase, stay the same, or decline for a given period. Recurring Revenue Rate indicates the percent change in the amount of recurring revenue at the end of a specified period compared to the recurring revenue at the beginning of the same period. Measuring recurring revenue rate is essential to help identify the factors that lead to revenue retention and attrition and provides an indicator of the overall state of customer relationship health.

read more

GUEST POST: Sell Services Faster and More Accurately

Company executives understand that selling services alongside core product offerings leads to greater alignment and customer value, while subsequently decreasing the likelihood of customer churn and loss of recurring revenue. Well-defined services and the means to sell them are imperative. so why is selling services so difficult? This article introduces 10 ways to help Sales teams sell services.

read more

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