Channel Mechanics

Make Sure Partners Are Preparing for Service Contract Renewals on Day One of a New Contract

Channel Mechanics

Service Contract Renewals…Is Day One to Early to Start?

Your partners are passing up great opportunities if they don’t start doing the right thing by new contract customers from the day they sign up. And the right thing is simply “show up!”. Wait for service contract renewals  time to reach out to their customers and they may be in for a big shock! All too often, their customers have decided to no longer be their customer. Create a Contract Contact Checklist to help assure they contact and visit these customers regularly. Not only will they get you the service contract renewals, they just might find new business along the way.


The failure of partners to win service contract renewal agreements is one of the biggest frustrations a channel manager faces. What seems like an easy and lucrative sale, lost simply due to inattention. Some channel managers send reminders to their partners when customer service agreements are coming up for renewal, but by then it’s often too late.


Why Customers Fail to Sign Service Contract Renewals

Customers invest in service agreements with the expectation that they’ll receive a return. Often, customers don’t have any problems with the assets they have protected by an agreement. You’d think that would be good news. No problems is always good news. The reaction of many customers, however, is that they didn’t receive any value from their service agreement. Nothing required service, so no service was rendered. It’s far too abstract for them to agree that being protected is real value in itself.

Some salespeople encountering this challenge have tried to explain this abstract concept, mostly in vain. Others point out that even though they’ve been lucky enough to have a good year with no problems, it’s therefore more likely that they’ll encounter problems as products age. You’ll agree, that’s just not a smart argument when it comes to service contract renewals.


It’s All About the Experience

Everybody is emphasizing the importance of the customer experience (CX) to just about everything. But there’s nowhere that it’s more important or valuable to your partners than in the area of service contract renewals. Properly managed, optimizing the customer experience begins day one. Since receiving useful information about their contract on day one builds their confidence.

Monthly reports (not quarterly) are only valuable if the customer knows how to interpret them, so at a minimum your first report should be presented personally and discussed with the customer. Beyond the obvious value of keeping the customer informed, it is not uncommon for reporting to surface other requirements which become new projects for the partner to provide. Encourage partners to see monthly update meetings as being twelve great sales calls per year. Each one is an opportunity to achieve several important things when it comes to Service Contract Renewal time.


Benefits of Monthly Update Meetings

    1. They (and their service agreement) gain regular visibility with the customer
    2. It’s a great opportunity to once again demonstrate their abilities and intelligence to the customer. After all this is the core reason they invested in the first place.
    3. The best forecasting is achieved by asking the customer what’s coming soon. Imagine what can be achieved when they have twelve opportunities to ask in person.
    4. Now they can test the waters months in advance of service contract renewal, providing time to strategize around overcoming objections. And if the reason is lack of service calls, the partner can either begin talking about the value of protection, or they can schedule proactive, preventative services.


Preventive services, by the way, are still services. Customers appreciate them and see them as valuable. With today’s AI-based instrumentation, you may even be able to help your partners be predictive about needs that are likely to arise soon.


CRM is not SFA

Channel Automation is your best friend. Many channel partners use their customer relationship management (CRM) system as a sales force automation (SFA) system. But they are not the same, and the difference is important when managing the customer experience effectively. SFA strategically ends once the customer purchases and they are then transferred to the enterprise resource planning (ERP) system.

CRM tracks, automates, and helps plan the entire customer experience. Their purchase is a milestone along the path, but it continues by helping to automate and manage every interaction. Today, your partners have the option of adding customer experience management (CEM) software to enhance their ability to optimize the entire relationship with each customer.


To learn more on how market leading vendors automate and manage their Service Contract Renewals, contact Channel Mechanics today and demo our renewal tracking software.


It’s All About the Relationships

When it comes time to sign the service contract renewal, it’s all about the relationship that your partner has built with their customers. It may be useful to ask your partners to see their service agreements more as “memberships” in the elite community of intelligent customers who have chosen them as their servicing partner. They may want to add immersive customer information forums and webinars that are exclusive to members. Or even publications or other premiums that only members can enjoy. When customers enjoy these benefits, they see value beyond service calls. And partners can leverage their community to refer them to others, building the community larger and larger all the time.

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