Three Steps to Accelerate your Recurring Revenue Business
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Recurring Revenue Business
Technology organizations have a growing list of channels to grow their business, with subscriptions and recurring revenue at the top of that list. Technology firms’ success relies on their ability to adjust, implement, and accelerate, based on their clients’ shifting needs.
This ability begins with an understanding that growth can be a moving target – when to maintain the status quo, when to follow the pack, and when to branch out on your own and establish differentiation.
But we continue to hear that without a strong foundation, rooted in proven best practices; you’ll be fighting an uphill battle from day 1. Ultimately, client engagement is proving to be the most consistent driver for business separating from the pack.
Here are three critical steps to enable and engage your customers for sustained business growth.
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Sales and Product Management
This first step is self-explanatory on the surface: you need to know which products you’re selling and how you’re going to sell them. Understanding your product capacity, including how to differentiate, is critical when enabling your sales teams. If they don’t know what they can sell, how are they supposed to sell it?
Equally important is how you’re going to sell these products, and product positioning manifests in a few ways, which are easy to take for granted. Too often, companies will take products and publicize the product’s features, slap a satisfaction guarantee on it (or an “unmatched customer service” guarantee), and call it a day.
This strategy fails to recognize the challenges your clients are trying to solve, and what makes your company different. If you’re a Microsoft MSP, this is particularly important because the core product offerings you provide are not dissimilar from other competing MSPs.
At the core of any business, you must be able to define which products and services you’re selling (including subscriptions and one-time items), have an established pricing strategy with stated price lists, and a plan for your core-bundle offers. Bundling can evolve in many ways, so your team needs to understand your core bundles’ uniqueness as part of your sales strategy.
How to accelerate: as your practice grows, you should consider three main areas to kick that growth into high gear:
Online Presence
In the digital economy, a company’s online presence is vital for its business to thrive. This is especially true for fostering more robust relationships with your clients and effectively messaging your differentiation to prospects.
We know what customers are asking for: transparency, agility, and attentive customer service. Yet each of those three areas poses a unique challenge of its own for companies embracing recurring revenue models. Providing clarity and agility can be particularly tricky if you’re manually managing hundreds of inquiries and change requests per month, exponentially increasing the internal effort needed to provide the level of customer services your clients desire.
The good news is many companies are actually nailing their online presence and delivering the service their customers need. It all starts with self-service, a portal where your clients are empowered to view and manage their licenses, view billing data, and view new products and services available to help grow their business. Installing a branded customer self-service portal is a surefire way to deliver transparency, agility, and exceptional customer service, while also providing a platform to accelerate growth.
How to accelerate: once you have your self-service portal installed with your company branding, you can elevate your presence even further with the following tactics:
Every company can improve its online presence, and even amidst a pandemic, Zuora’s Subscription Economy Index finds that subscription sales remain resilient, rising 12% in Q2 2020 alone. Providing your clients with a hassle-free, transparent process for navigating inquiries and requests is a recipe for increased engagement.
Automation and Integration
In a recent interview with the current CEO of Zuora Tien Tzuo, there were some fascinating thoughts from Steve Cakebread (former CFO of Salesforce) around Automation and the subscription economy. Automation and the subscription economy are forever intertwined, with each facilitating growth of the other. The rapid rise in subscriptions isn’t possible without Automation; otherwise, it would be too painful to bill and collect cash on a monthly or annual schedule (it also wouldn’t make financial sense).
What Steve says is: “Automation is key. A lot of companies realize this way too late. You can’t just throw bodies at the problem anymore. People don’t want to do that kind of work these days.” Of course, he’s right. Too often, the standard procedure is adding headcount or resources to solve the problem. But for many growing small businesses, that’s not an option.
There are only two options: slow your growth, or automate. If you’re a business owner, the choice is clear: you have to find a way to automate. But how and where to start? An audit of your sales process is a good start, and being honest and objective with your evaluation is critical. From there, you’ll be able to target gaps where your effort is overly manual. This is your foundation for transforming your business, and identifying areas for investment – if you’re an MSP, integration with Partner Center is also worth exploring or integrating into your accounting system. As Steve mentioned, people don’t want to be working in excel spreadsheets all day, so enabling an automated, integrated flow across your systems is paramount. You also want to allow notifications and alerts through Power Automate’s flow.
How to accelerate: with your foundation in place, you want to continue eliminating overly manual workflows. The next four areas are how we see the best companies operating:
Once you begin to apply these tactics, you’ll be better informed, operate more efficiently, and gain critical insights into how your business should grow recurring revenue. One other quote of sage advice from Steve: “Make sure you’re in a position to take advantage of the data. We would have done so many things at Salesforce differently if we just had access to the data.”
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