Absolutely nothing. Okay, maybe not absolutely nothing, but I couldn’t leave you hanging, could I?
Working with sales and sales ops leaders across industries, I often see ‘war rooms’—real or virtual—as a common attempt to assemble a solution to wide variety of problems:
Need to identify upcoming renewals and know when you should talk to the customer? Let’s get everyone together, pour through documents and data, build a giant spreadsheet, and upload it into the CRM.
Want to understand the customer relationships we gained in the most recent company acquisition? Same exercise, only this time we produce multiple spreadsheets.
Trying to run a sales or marketing campaign and need to know which customers own what products or have specific commercial terms, such as exclusivity, anti-sunsetting or future purchase options? Godspeed.
Want to assess favorability of commercial terms and pricing across your portfolio so you can segment your customers and better prioritize the renewal, renegotiation, and upsell efforts of your sales team? Sure, just marshal an army of people, three years and a lot of coffee.
Most B2B companies are under increasing pressure to drive more revenue and renewals from their install base not in three years, but next quarter. The move to “as-a-Service” business models places an even greater emphasis on full understanding of your customer relationships. Traditional approaches of people + documents & data + spreadsheets + CRM held together by scotch tape and toothpicks won’t cut it.
Active selling time takes a hit
This sequence of “‘one-time projects’ that happen every quarter” has a particularly negative effect on sales teams. For all the effort that goes into collecting the information, I constantly hear feedback from frontline reps that it’s simply not that useful. In fact, we consistently see up to 15% of active selling time lost for this very reason.
Imagine the day-to-day research and myriad questions a sales exec undertakes to execute customer renewals, renegotiate unfavorable terms or engage in a cross- or upsell opportunity.
What is the product footprint?
What pricing is in effect?
When are there upcoming renewals?
Are there any non-standard terms?
The answers to these questions matter—a lot—but current account research approaches typically only address one question at a time for just a subset of customers. And even then, the answers may be missing information from the latest amendment or acquisition—and they become outdated as soon as a new deal is signed.
That leaves the full answer hidden in hundreds of pages of MSAs, order forms and amendments. Piecing together the current relationship for even one customer takes hours or days. Not only does this waste hours of selling time every week, it leaves potential upsell revenue and deal profitability on the table all the time.
Several years ago, I was working with a large telecommunications company on churn issues. As we dug into the root causes of the problem, we made an interesting discovery: for smaller accounts, sales team members weren’t actively working renewals because finding the right information to talk to those customers took too long.
Sales people are fantastic about getting the most return on time expended, and they had accurately judged that all of the internal work required to track down the renewal date, understand what the customer owned, and approach the customer did not justify the compensation they received when compared to working new deals.
Obviously, there were lots of issues at play here—from team organization to compensation—but the implications were clear. There were literally tens of millions of dollars in opportunities going unworked simply because the information sales teams needed were not available.
The pressure is rising
A confluence of trends are making this challenge a top priority for many sales and sales ops leaders.
The push to be ‘easier to do business with’: The move to “as-a-Service” solutions necessitates both a lower cost of sale because of smaller upfront fees and a more accurate understanding of what you’ve sold your customers and under what terms. This makes it easier to migrate customers to new business models and keep them happy.
A maturing technology landscape: Most companies have a relatively mature and stable CRM. Efficiency gains from CPQ systems are taking longer than expected to realize as deployments drag on, particularly for complex deals. And sales and sales ops leaders need to show a return on their investment.
Increasing relationship complexity: As emerging “as-a-Service” companies move upmarket into the Enterprise space and traditional players develop their own subscription offering, relationships are becoming more complex. Consolidation via M&A and continued push to “solution selling” bundles only serve to increase the complexity sales teams must deal with.
With this pressure, many large B2B organizations recognize this all-hands-on-deck effort for tracking down key customer relationship information is neither useful nor sustainable. Knowing precisely what you’ve sold your customer, at what price point, under what terms, and when it renews isn’t a nice to have, it’s a must have for any B2B organization. And every quarter delayed is another quarter of missed upsell and renewals.
War room-style attempts to piece together information, plug holes in your CRM or rely on managed spreadsheets will always fall short. Your sales operations team needs a systematic approach that gives them concrete benefits like a prioritized portfolio, advance relationship insight, negotiation recommendations and success tracking. When it comes to formulating a strategy for account research and renegotiations that will drive new revenue from your existing customer base, give peace a chance.
Take a closer look at Pramata’s Account Research & Renegotiation solution or contact us to request your own Impact Analysis.