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Improving the Outlook for Renewal Sales Reps
Why CRM isn't enough to maximize recurring revenue.
Posted Feb 7, 2014
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"It was the best of jobs; it was the worst of jobs," to broadly paraphrase Charles Dickens. Okay, being a sales rep is by no means the worst of jobs. But in most organizations, recurring revenue sales reps do not get the same respect and support given to their new sales counterparts. To put it bluntly, new sales reps get the glamour, prestige, and new tools, while renewal sales reps get little recognition and hand-me-down technology.

New sales and renewal sales: A study in contrasts

This should come as no surprise. Successful organizations are always on the lookout for new, lucrative business opportunities. In these organizations, big-ticket sales reps may track between 10 and 20 sales each quarter. With each new sales rep potentially bringing tremendous value to the organization, it should come as no surprise that they are highly valued and rewarded.

An organization's CRM system helps these salespeople manage the various contacts and track the progression of opportunities, including qualification, determining if the customer has a budget and how much, identifying the compelling event, and determining whether it will happen this quarter. Tracking these activities to come up with a meaningful forecast has been the art of existing CRM systems.

In contrast, a renewal sales rep tracks far more quarterly opportunities, anywhere from 100 to 700. While each of these may have a lower individual value than a new sale, in aggregate, they net a higher value for the company. These renewal sales reps deal with service contracts, which don't reside exclusively in the CRM system. Instead, they must manually piece together data from multiple systems, including CRM and ERP, often into spreadsheets—a time-consuming endeavor that fails to streamline the sales process.

To further complicate the situation, recurring revenue sales reps need to track their deals by the day and week because renewal sales are highly perishable. Their value (likelihood of occurring) diminishes significantly if they are not closed before the expiration date.

Why CRM systems don't serve renewal sales reps

In short, the differences between recurring and new sales all but guarantee that CRM systems are incapable of meeting the needs of recurring sales experts. Here's why:

  • Customer relationship management systems, by name and design, are built to track people (contacts), not the assets (service contracts) that drive renewal sales.
  • User interfaces designed for handling a few high-value customer relationships simply don't work for handling large volumes of renewals with a short shelf life.
  • CRM applications do not easily support the customized process optimization and tuning essential to drive recurring revenues at scale.
  • There is a far, far better way to manage recurring revenue—using tools designed for the unique needs of this job.

It is essential for organizations to evolve and integrate the proper tools, technology, and best practices necessary to maximize their recurring revenue. Fail to make these changes to your sales platforms and you could find your organization—and your company's top and bottom lines—closer to the "worst of times."


Jim Dunham is the senior vice president of product management at ServiceSource.


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