11 May 4 ways Managed Services helps maximize recurring revenue
More and more companies are transitioning to a recurring revenue model for one simple reason: It makes good business sense. Over a nine-year period that ended in 2020, subscription-based businesses grew nearly six times faster than the S&P 500 itself, according to 2021 industry research from the Zuora Subscribed Institute. Simply put, recurring revenue models are good for businesses and they’re good for customers. With a recurring revenue model, businesses don’t focus on one-off purchases from a mostly anonymous customer base that may or may never become repeat customers. Instead, businesses focus on building lasting, mutually beneficial relationships with customers who purchase services and products at regular, ongoing intervals—loyal customers who represent much more than just the sum of their sales transactions.
For businesses that have historically operated with a traditional sales model, the transition to a recurring revenue model is not easy. Recurring revenue models require fundamentally different workflows, systems, and technologies; most companies lack the expertise, resources, and time to architect them. That’s where a Managed Services partner can make a big difference. Managed Services partners are on-demand experts that can provide a range of services to support an organization’s technology infrastructure, including maintaining all of its sales and CRM (customer relationship management) tools. Let’s explore four key ways a Managed Services partner plays an essential role in helping companies successfully transition to and thrive under a recurring revenue model:
Managed Services partners zero in on opportunities to streamline and automate
Recurring revenue models are enabled by a powerful, customizable sales ecosystem, made up of interconnected platforms and tools that connect the business to its customers. This ecosystem is designed to streamline and automate key workflows that support these connections. Indeed, the systems behind recurring revenue tools do everything from rapidly delivering customized sales quotes to customers, to helping sales teams identify logical upsell and cross-sell opportunities, to sending value-add communications to customers to build strong and lasting relationships. Not only do most companies lack the in-house expertise to set up all of these features and functionalities on their own, but they also don’t have the experience and perspective to stay on top of new developments, opportunities, and trends to ensure their ecosystem remains updated and optimized. Thus, Managed Services partners are well-positioned to serve as a company’s expert eyes and ears—constantly identifying opportunities to tweak, improve, and expand the sales ecosystem and optimize both the customer experience and recurring revenue opportunities.
Managed Services partners are experts at collecting, analyzing, and interpreting customer data
Recurring revenue models are predicated on a company’s ability to truly understand its customers—what they’re buying and when, the reasons behind their purchases, and the value they’re getting from these purchases. Companies can only extract these insights if they know how to collect, analyze, and interpret the appropriate raw customer data. While most companies get an initial boost of help while setting up their initial CRM tools, dashboards, and performance metrics, many companies flounder over the long term trying to make changes and tweaks to their original configurations. The end result? Tools and apps break. Dashboards need to be reprogrammed to remain useful. New data types are collected over time that require new data analysis and visualization tools. When companies bring on a Managed Services partner, they get on-demand access to outside experts who have extensive experience configuring and reconfiguring data collection, analysis, and interpretation activities. Managed Services partners know what works, what doesn’t, and where the company should be moving next. These ongoing enhancements ensure that the company’s recurring revenue model continues to fire on all cylinders over the long term.
Managed Services partners know how to optimize integration and interconnectivity of systems
To properly support a recurring revenue model, companies need more than just a modern CRM. They also need their CRM to be seamlessly integrated with their CPQ (configure, price, quote) and billing systems, ERP (enterprise resource planning) systems, partner and vendor management systems, order fulfillment and tracking systems, and commerce systems. By connecting all of these systems together, key sales and customer data can flow seamlessly, eliminating the need for manual data entry and reentry and ensuring that customers can get the information they’re looking for at the moment they go looking for it. Specifically, access to reliable, real-time data enables companies to implement a range of customer-friendly experiences, including creating a self-service portal for customers to access information about their orders, as well as proactively emailing customers to let them know about planned service disruptions. This interconnected network of systems and tools can be prohibitively complex and overwhelming for in-house teams to maintain, but Managed Services partners are ideally suited to do the heavy lifting. Indeed, Managed Services partners have “done it all before”—they know how to minimize risks, avoid operational disruption and downtimes, and connect systems expeditiously and in accordance with best practices.
Managed Services partners can rapidly roll out and modify technologies to support revenue growth
When businesses operate under a recurring revenue model, they’re constantly adjusting and rearranging how they package their offerings, as well as tweaking the products and services themselves. All of these changes require updates to the sales ecosystem—to the CPQ system and its pricing catalog, to the back-end billing and accounting systems, to the knowledge bases and customer-facing portals that serve up this information. In many instances, workflows and systems also must be scaled to meet increased demands. While in-house teams may struggle to keep up and implement changes correctly, Managed Services partners excel at executing these changes rapidly and to exacting specifications. This gives the company the confidence it needs to move with agility and speed as it makes decisions to adjust its recurring revenue strategy; the company doesn’t need to worry that its in-house team might struggle to keep up with the supporting technology infrastructure upgrades and expansions.
There’s no reason for companies to rely exclusively on their in-house teams to support the technology that powers their recurring revenue strategy. When companies partner with a Managed Services provider, they can count on this partner to zero in on opportunities to continuously streamline and automate the entire ecosystem, to ensure the company is getting the most from the sales and customer data it’s collecting, to optimally integrate and connect the core CRM platform to other systems, and support changes to recurring revenue strategy by rapidly modifying the underlying technology.
Simplus specializes in helping companies maximize their long-term recurring revenue potential through Managed Services partnerships. To learn more about the flexible, on-demand support options available to you through Simplus’s Strategic Managed Services program, please reach out to us today. We look forward to applying our expertise and experience to help you reach all of your recurring revenue growth targets.