3 Questions for ConnectWise on Recurring Service Revenue
CI speaks with ConnectWise about three main areas of expertise: customer relationship management, cash flow and service contract oversight.
Whenever we can talk to folks at ConnectWise, a provider of business operations solutions, we like to ask them about common back-office pain points among integration firms.
CI editor Tom LeBlanc zeroed in on three areas in his interview with manager of strategic markets Dexter Williams: customer relationship management, cash flow and service contract oversight.
Integrators understand their best customers are their return customers, but they don’t necessarily have processes in place to manage those relationships. Any tips?
We always recommend [integrators have the] service techs who go onsite and do main-tenance [are] communicating the information back to you — whether that be on devices, whether that be on additional opportunity — [and] train them to find that opportunity while they’re out there doing other service for them.
Hear from Dexter Williams in the following video or read on below for the rest of the interview.
What steps can integrators take to improve cash flow management?
What we’re going to recommend is to start incentivizing your sales team, start changing strategically the direction of your organization to focus on more recurring revenue … We always recommend taking that strategic jump. Start incenting your sales reps not to look for the [big] payday but to look for more recurring revenue. Also, invoice your customers quickly and easily.
What advice can you offer for better service revenue oversight?
Managing it is extremely important. The arbitrary nature of pricing it and the arbitrary nature of understanding what real value it provides can be extremely challenging for a lot of organizations. So the first piece of the pie is make sure that you’ve created a price and package offering that is both profitable for you and of great value to the client.
How do we do that? We have to dig into the numbers. A lot of people tell me, “Well, they’re on service contract. I don’t have to track my time against that kind of account.”
More on Recurring Revenue here.
No, it’s actually more important that you track your time so you can get down to the hours and [see if] we’re making money on this account and is this providing value to the customer. One of the other big things about service contracts that I’ve noticed in this industry is that a lot of people have begun to think of it as sort of a product [to sell].
So I sell a device and throw on a maintenance contract and that’s the way to sell it, [but] recurring service contracts are really more about value-added service that you’re going to provide on a monthly or recurring basis … Start to think about the value-added services you can provide.
When you start taking your conversations to that level, it will help you to manage it better, manage your customers’ expectations better and allow you to be more profitable in those contracts.
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