Field Service Operations

Field Service Operations

Eric Jeffries, ServiceSource: The True Value of Customer Retention, from Field Service East 2013

Video transcript:

I would like to actually just give you a couple of factoids. After the presentation yesterday a number of people said that they like some of the statistics and some of the background that we provided context as to why we see so much growth within this organization’s opportunity driving service revenue.

So a couple of points here. Pretty self-intuitive. This is a study that Bain & Company did finding that if you can retain just 10% more of your customers that will drive to an increase 30% in your overall customer value and that’s Wall Street valuations.

Secondly I mentioned this briefly I think it’s an important point you expect a great deal from your field sales organizations but potentially not as much from your field as it comes to recurring revenue. It takes 5 times more data to appropriately renew on par contract value at the right asset level in the right location a services contracts, so don’t underestimate the complexity here when you look at your teams and how much time they spend pursuing a new customer as well as renewing, as many of you know it takes a great deal of more time to pursue and close a new deal than it does to retain a customer but the end verse is it takes a great deal more information that you have to capture, track and manage correctly. And if you don’t manage it correctly your customers will be disappointed because they expect you to be the custodians frankly of their assets at their locations.

Also to note the interesting statistic six times more time in a one hour renewal than it does if you don’t an automation approach, and what we found within our organization is that the more tools that you provide to a person frankly the more complicated it get unless the process and the tools are well married, so in that regard you can actually increase the speed and if you also consider renewals are a function of a sales effort and is not an administrative effort if you leave the administration in your finance organization you’re making a collection event it’s not a selling event, so make sure that when quotes are created there is some distinction of value that is being given, not just here’s your invoice please pay it.

This is a stat we shared yesterday. This is joint research that Gardner and Services did, over $30 billion being lost across organizations for uncaptured revenue. Just moving that needle 1% for your organization can be very significant.

Quick graphic on the compounding aspect of losing a customer in 1 year and that revenue not being able to renew and recur so that exponential effect is losing $10 million in 1 year on a 5-year partnerships leads to over $150 million with a lost revenue and that revenue is frankly much more profitable than net new sales frequently.

And then lastly if you get to retain 5% more of your customers than you are taking on today you can increase your company’s profit 25 to 80% that’s a wide range that’s certainly given the profitability of a service report contract and that you already have your tack and others installed, two more phone calls, five more phone calls really is irrelevant, so any extra dollar you add is not going to add exponentially to the cost.

Field Service Operations

Eric Jeffries, ServiceSource: The True Value of Customer Retention, from Field Service East 2013

Video transcript:

I would like to actually just give you a couple of factoids. After the presentation yesterday a number of people said that they like some of the statistics and some of the background that we provided context as to why we see so much growth within this organization’s opportunity driving service revenue.

So a couple of points here. Pretty self-intuitive. This is a study that Bain & Company did finding that if you can retain just 10% more of your customers that will drive to an increase 30% in your overall customer value and that’s Wall Street valuations.

Secondly I mentioned this briefly I think it’s an important point you expect a great deal from your field sales organizations but potentially not as much from your field as it comes to recurring revenue. It takes 5 times more data to appropriately renew on par contract value at the right asset level in the right location a services contracts, so don’t underestimate the complexity here when you look at your teams and how much time they spend pursuing a new customer as well as renewing, as many of you know it takes a great deal of more time to pursue and close a new deal than it does to retain a customer but the end verse is it takes a great deal more information that you have to capture, track and manage correctly. And if you don’t manage it correctly your customers will be disappointed because they expect you to be the custodians frankly of their assets at their locations.

Also to note the interesting statistic six times more time in a one hour renewal than it does if you don’t an automation approach, and what we found within our organization is that the more tools that you provide to a person frankly the more complicated it get unless the process and the tools are well married, so in that regard you can actually increase the speed and if you also consider renewals are a function of a sales effort and is not an administrative effort if you leave the administration in your finance organization you’re making a collection event it’s not a selling event, so make sure that when quotes are created there is some distinction of value that is being given, not just here’s your invoice please pay it.

This is a stat we shared yesterday. This is joint research that Gardner and Services did, over $30 billion being lost across organizations for uncaptured revenue. Just moving that needle 1% for your organization can be very significant.

Quick graphic on the compounding aspect of losing a customer in 1 year and that revenue not being able to renew and recur so that exponential effect is losing $10 million in 1 year on a 5-year partnerships leads to over $150 million with a lost revenue and that revenue is frankly much more profitable than net new sales frequently.

And then lastly if you get to retain 5% more of your customers than you are taking on today you can increase your company’s profit 25 to 80% that’s a wide range that’s certainly given the profitability of a service report contract and that you already have your tack and others installed, two more phone calls, five more phone calls really is irrelevant, so any extra dollar you add is not going to add exponentially to the cost.