Service Revenue Generation Metrics
Service revenue accounts for a growing and significant percent of total revenue for many technology vendors. The ability to accurately track the effectiveness of Service Revenue Generation activities is essential to maximizing revenue from new and existing customers.
Attach | Renew | Winback
There are three primary opportunities to capture service revenue including the sale of new contracts at the time of the initial product sale (Attach); renewal of existing service contracts (Renew); and as reinstatements (Win Back) of contracts that have been previously cancelled by customers.
Attach, Renew and Win Back are presented as key indicators to measure Service revenue generation performance in terms of total revenue and contracts attached, renewed and reinstated. In addition, this report introduces the Service Revenue Generation Performance Index® to reflect the general effectiveness of service sales, renewal and winback activities.
The Service Revenue Generation Performance Index (SRG/PI) may be used to calculate sales and renewal performance for all service types collectively or individually. The formulas, inputs and assumptions presented within this report may be applied to Support, Customer Success, Professional Services and Education. Be consistent with your inputs an assumptions. Note: Sample benchmarks in this report reflect Technical Support industry data.
Service Revenue Generation Performance Index
Support Contract Attach Rates
This report provides specific definitions, inputs, algorithms and assumptions for calculating the following Service Revenue Generation KPIs:
- Attach Rate measures the effectiveness of new contract sales activities (direct or through partners) by reporting the extent to which the available service opportunity associated with new contract sales has been realized.
- Renewal Rate (measures the effectiveness of contract renewal activities by reporting the percent of revenue and/or contracts due to expire that are successfully renewed.
- Win Back Rate measures the effectiveness of win back programs by reporting the percent of non-renewed contracts and/or revenue that is reinstated to active status.
- The Service Revenue Generation Performance Index (SRG/PI) indicates the percent of the total service opportunity from all sources (Attach, Renew and Win Back) that has been captured in each period (e.g. Monthly, Quarterly, Annually, etc.)
The ability to accurately track the effectiveness of Service Revenue Generation activities is essential to maximizing revenue from new and existing customers. There are three primary opportunities to capture service revenue including the sale of new contracts at the time of the initial product sale (Attach); renewal of existing service contracts (Renew); and as reinstatements (Win Back) of contracts that have been previously cancelled by customers. This report presents a consistent set of metrics and definitions to help companies measure the overall of service sales and renewal policies, programs and personnel.
Log-in to get your copy.
Login to Access the Full Report
If you don’t have an account, create a free* membership.
[/et_pb_df_wc_restrict_content_close_tag][et_pb_df_wc_restrict_content_open_tag admin_label=”Success Trial – Open” shortcode=”wcm_restrict” plans=”success-trial” start_after_trial=”off” _builder_version=”3.0.100″]
[/et_pb_df_wc_restrict_content_close_tag][et_pb_df_wc_restrict_content_open_tag admin_label=”Success Enterprise / Team – Open” shortcode=”wcm_restrict” plans=”success-enterprise-plan, success-team-plan, success-trial, success_plan” start_after_trial=”off” _builder_version=”3.19.8″]
*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.
High Net Promoter Scores as the desired outcome of Support and Customer Success interactions, while positive, is not enough because they it does not connect service delivery excellence with tangible business outcomes.
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.
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.
A well-defined CX strategy combined with an effective Customer Success (CS) operating model can yield significant and tangible benefits including retention and expansion of existing relationships and the strengthening of your product and service reputation.
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.