Lax Renewal Processes Result in Billions in Lost Revenue

By Michael Vizard

Each year, solution providers leave millions of dollars in revenue on the table simply because they didn't follow up on a renewal opportunity. A new report from ServiceSource, a provider of application software that is designed to simplify managing the renewal process, makes that clearer than ever. The company's first annual Global Recurring Revenue Index, based on surveys of ServiceSource customers, finds that renewal rates through the channel are, on average, 12 percentage points lower than through direct sales, resulting in billions of dollars in lost revenue opportunities for vendors and their partners. Despite the issue with renewals through the channel, the report notes that the vast majority of companies depend on the channel to generate renewals. In fact, much of the blame for poor management of renewals can be ascribed to processes that depend on flawed data or simply lack of access to critical information and tools. Regardless of who is at fault, with a little more discipline, it's clear that there is a lot more money to be made by being more attentive to what's actually happening with existing customers, versus always trying to land the next big one.

This article was originally published on 2013-09-05
Mike Vizard has been covering IT issues in the enterprise for 25 years as an editor and columnist for publications such as InfoWorld, eWeek, Baseline, CRN, ComputerWorld and Digital Review.