MASTERING REVENUE LIFECYCLE MANAGEMENT

MASTERING REVENUE

LIFECYCLE MANAGEMENT

CUSTOMER ENGAGEMENT LEADS

TO COMPETITIVE ADVANTAGE

IN ASSOCIATION WITH:

CONTENTS

Executive Summary ................................................................................................................................................. 2

Introduction ................................................................................................................................................................. 3

Key Findings ................................................................................................................................................................ 4

The Need for a better Customer Engagement Strategy ......................................................................... 7

Deﬁning the Challenges ......................................................................................................................................... 11

Conclusion ................................................................................................................................................................... 14

Key Takeaways for Meeting These Challenges ...........................................................................................16

Methodology / Acknowledgments .................................................................................................................. 18

2 | MASTERING REVENUE LIFECYCLE MANAGEMENT

EXECUTIVE SUMMARY

A direct correlation exists between market leadership and revenue growth of

B2B companies and their holistic investment in Revenue Lifecycle Management

(RLM).

hat was the major nding of a recent survey

conducted by Forbes Insights and sponsored

by ServiceSource. The survey, of 334 C-suite

and Senior Executives from a range of indus-

tries, examined correlations between a

company’s relative level of customer engagement matu-

rity across technology, data, people, process and KPIs

and their revenue growth, retention and protability.

The survey revealed that companies that take a more

holistic, sophisticated and mature approach to RLM are

more likely to be market leaders in protability, revenue

growth and retention of existing customers. Additionally,

the ndings also indicated that enhanced overall revenue

or topline growth is by far the most important benet of

Revenue Lifecycle Management maturity. Several other

benets, include greater customer satisfaction, improved

customer advocacy, expanded market share and compet-

itive dierentiation. This paper highlights key ndings

around the evolving nature of the customer-vendor rela-

tionship and addresses the critical role of an eective

and well-designed RLM strategy in promoting revenue

growth for B2B companies.

INTRODUCTION

It will come as no surprise to those in the B2B environment that a rapid conver-

gence of technology, enterprise and software is taking place—a convergence

disrupting the traditional roles of partners, vendors and customers that have

existed for 125 years.

evenue Lifecycle Management (RLM)—

that is, a framework for growing and

retaining revenue from existing custom-

ers—is now playing a critical part in this

disruption. Businesses are nding that a lack

of focus regarding their RLM process can have a neg-

ative impact on protability, market capitalization and

shareholder value. Yet opportunities present themselves

at each touch point in the lifecycle—onboarding, adop-

tion, upsell/cross-sell, retention and renewals. Those

enterprises that are ahead of the curve—that make data-

driven decisions and partner continuously with their

customers to help unleash the value inherent in insights

derived from the RLM process—are poised to see sub-

stantial returns on investment.



“The cloud business is more like a

service business because the engage-

ment has to be continuous and focused on

realization of value and business outcomes,

not deploying a technology. It has to be

a much more active relationship—

the partnership is deeper.”

— Augusto Abbarchi

SVP and Global Head of

Maintenance Go-to-Market,

SAP

What characterizes this disruption is the power

shift that has occurred between vendors and their cli-

ents. Heightened customer expectations are propelling

a profound rethinking of the meaning of service and

the role of RLM. Vendors can no longer count on

immediate returns derived from one-o sales: prof-

its now roll out over the full revenue lifecycle and are

largely determined by ongoing and long-term rela-

tionships typied by trust and a deep understanding of

customer needs. Today vendors do not have the luxury

of leaving their clients to their own devices in assessing

how to extract full value from their purchases. Instead,

companies must make the investments—either through

partnerships or directly—that allow them to be front

and center in assisting their customers as they maneu-

ver their way through the complexity and intricacies of

the products and services they buy at every stage of the

lifecycle. Firms achieving revenue growth appear to be

aware of this.

For instance, Augusto Abbarchi, senior vice presi-

dent and global head of maintenance go-to-market at

SAP, notes that “since the cloud has come into play,

the relationship with the customer is changing. A pro-

vider can no longer sell a license and then help only

with the support services. The cloud business is more

like a service business because the engagement has to

be continuous. It has to be a much more active rela-

tionship—the partnership is deeper.”

B4B,

.B. Wood, Todd Hewlin and Thomas Lah

, October 2013

Revenue Lifecycle Management maturity drives market leadership and corporate performance. Respon-

dents in the study with the highest levels of maturity

are 46% more likely to be market leaders in revenue growth

and growth from existing customers, and 36% more likely to be market leaders in proﬁtability than less mature

companies.

Evolving customer expectations and technologies are driving business changes. Eighty-one percent of

the respondents stated that customers are now more likely to expect vendors to engage with them and 73%

said that customers also tend to compare current vendors with their competitors in regards to how they are

engaged after initial sale.

Increasingly demanding customers will require increased engagement to succeed. Of the executives in-

terviewed with mature RLM processes, 34% believe that the future of customer engagement is most likely to be

shaped by an increasingly educated and demanding customer base, 32% believe new models for consumption

of services and technology are emerging and 32% are planning to use big data analytics for achieving success

in post-customer acquisition engagement. Senior management recognized customer engagement as one of its

top priorities and nearly as many say engagement innovation is critical for success.

Mature market leaders place greater emphasis on driving customer value, loyalty and retention. Seventy-

one percent of respondents from mature companies believe that enhancing customer loyalty versus growing

revenue (66%) and retaining customers (64%) are their organization’s primary goals for its customer base versus

39%, 53% and 47% respectively for less mature companies.

Mature market leaders balance investments across technology, analytics and process. Mature market lead-

ers are more likely to say that they experience consistent success by eectively leveraging “technology to manage

relationships” by 39% versus 14% of less mature respondents, as well as “consistency and adaptability of process

es” (36% versus 11%) and “use of data driven analytics to make informed decisions” (35% versus 11%).

Mature market leaders are more likely to have a higher degree of sophistication in terms of tracking and measuring

customer engagement strategies with 29% using industry or internal KPIs versus 13% of less mature companies,

and 16% making real-time strategic decisions based on the health of their customer base versus 8% of less mature

companies.

4 | MASTERING REVENUE LIFECYCLE MANAGEMENT

KEY FINDINGS

RLM maturity deﬁned as companies scoring highly across at least 3 of the 5 revenue lifecycle stages — onboarding, adoption, upsell, cross-sell, retention and renewal.

Firms that are the most mature in their use of RLM methods tend to

achieve higher rates of revenue growth from existing customers

Percentage of respondents in each revenue growth class who are the most

mature in their use of RLM methods at each stage of the customer lifecycle

Encourage adoption after

initial deployment

47%

28%

30%

Discourage customer

defection

42%

35%

25%

Effective at

renewing products/

services

39%

26%

13%

Driving upsells and

cross-sells

36%

21%

15%

Self-assessed market leaders in terms of revenue growth from existing customers

Above average

Average or below

Revenue Lifecycle Management maturity is variable across geographies and industries. U.S. and APAC

respondents are 42% more likely than counterparts in EMEA to name customer retention as one of their orga

nization’s top strategic priorities. Thirty-eight percent of U.S. companies say they evaluate success of customer

engagement initiatives through a focus on long-term customer value compared with 26% for APAC and 13%

for EMEA. Europe has the highest percentage of mature respondents at 29% while the US and Asia-Paciﬁc are

tied around one in ﬁve. The most mature industry is intelligent device manufacture at 26% and the least being

value-added resellers (VARs) or channel partners at 16%.

6 | MASTERING REVENUE LIFECYCLE MANAGEMENT

What do Mature Market Leaders care about?

Respondents proﬁcient in RLM are much more likely to seek to ensure customer value

(62% vs. 36%), increase deal margins or revenue from new customers (55% vs. 30%)

and to optimize the initial impact (48% vs. 14%).

THE NEED FOR A BETTER

CUSTOMER ENGAGEMENT

STRATEGY

An urgent undertaking

Making Revenue Lifecycle Management a priority—a process that often requires

third-party expertise—is critical. Nearly three-quarters of survey respondents

say that, in today’s environment, their customers “are more likely to compare us

with competitors.”

he Forbes Insights survey found that the

practice of Revenue Lifecycle Management

appeared to play a large role in the success

of companies adapting well to the new com-

petitive realities aecting vendors and their

customers. These companies are therefore likely to

maintain their advantage in a tough marketplace. Just

as 71% of market leaders practice holistic RLM, num-

bers are similar for the broader KPI of protability,

where the proportions run from 47% of market leaders

to 30% of those below average.

The survey also drew attention to evolving

customer engagement expectations that are driving

business changes. Some 80% of those surveyed strongly

agree with the statement “customers are more likely

to expect us to engage with them.” As well, 72% of

those polled say that senior management has recog-

nized customer engagement as one of its top priorities;

nearly as many say engagement innovation is critical

for success. However, respondents still see expanding

their customer base as a top priority by a margin of at

least 10 percentage points over retaining their exist-

ing customer base, improving customer engagement or

maximizing customer lifetime value.

Strategic priorities most important to organizations

Percentage of respondents

Expanding our customer base

42%

Retaining our existing customer base

32%

Improving customer engagement

31%

Maximizing customer lifetime value

29%

Controlling costs

22%

Ensuring regulatory compliance

13%

8 | MASTERING REVENUE LIFECYCLE MANAGEMENT

Also signicant is the fact that less than one in ve

executives say they have recognized solid achievements in

every potential touch point of engagement after the cus-

tomer’s initial purchase. Most companies say development

of customer engagement strategies is a work in progress.

Only 10% say they have clear real-time visibility into the

health of the customer base and make strategic deci-

sions derived from the resulting insights. But more than

half say either that they are starting to design processes

for customer engagement or that they have consistent

processes that they are trying to apply across business

functions.

Knowing that companies are focused on growth,

it is surprising that only a minority of enterprises

measure success of customer engagement accord-

ing to the long-term value of customer relationships.

Respondents report that overall revenue gains and mar-

gins are more important. While another 29% say that

maximizing customer lifetime value is a top strategic

priority, and a slim majority of the companies polled

say they practice “some form” of RLM, it isn’t clear

that they are connecting the process with improved

customer engagement: only 36% say they manage some

post-sale activities but not the complete cycle.

Yet companies cannot aord to lag behind in

reforming their approach to RLM. Customers are

demanding intimacy, and competition is more preva-

lent than ever. While this is perhaps most evident

in the so-called subscription economy typied by

software-as-a-service (SaaS), the impact of this shift

now permeates every aspect of enterprise technology.

“The combined annual revenues of the 50 larg-

est enterprise technology companies in the world have

shrunk on the order of a $150 billion to $200 billion

in the last six or seven years,” says J.B. Wood, presi-

dent of the Technology Services Industry Association

(TSIA), which provides research, industry best prac-

tices and benchmarking for technology leaders. “There

are a lot of shifts in the market driving that, but at the

end of the day it comes down to the old way of doing

business, which was to sell a bunch of features to a cus-

tomer, help them install the features, and then turn the

whole thing over and let the customer own the respon-

sibility for translating that product into a business

outcome. That strategy no longer works.

“Now customers are saying: ‘I’m not

investing in you unless you can

translate this bunch of features into

a business outcome.’”

— J.B. Wood

President,

Technology Services Industry

Association (TSIA)

Level of development of customer engagement strategy

Percentage of respondents

We have a consistent process that we are trying to apply

across business functions

31%

We are starting to design processes for how customer

engagement should work

20%

We take advantages of opportunities to engage customers, but the

successes we have achieved are not driven by a systematic strategy

19%

We have optimized our customer engagement processes and are

tracking them using industry or internal KPIs

17%

We have clear real-time visibility into the health of our customer base,

and we make strategic decisions based on the resulting insights

10%

“Obviously,” Wood continues, “if you have

the as-a-service subscription model, if the customer

isn’t successful, they don’t renew and you’re dead.

[This new reality] is aecting the traditional asset

world—that part of the business that never really had

to worry about how much value the customer got out

of the solutions. The customer was pretty locked in.

The approach was: ‘I’ll sell you this bunch of hard-

ware and software [and]…I’ll be back in four years to

upgrade you.’ But now customers are saying: ‘I’m not

investing in you unless you can translate this bunch of

features into a business outcome.’”

SAP’s Abbarchi underscores the ascendancy of

the customer insofar as it aects SaaS: “The way we

engage has to be dierent now. We can’t just focus on

upselling. We have to focus on making sure the cus-

tomer realizes value out of what they’ve bought,

because in the cloud business, the customer has the

option of renewing or not renewing after a number of

years. [If they don’t perceive any value from us], they

can move to another solution if they want because they

haven’t bought the product.”

Some industries are better poised to fully realize the

benets of holistic RLM, while others have a signi-

cant way to go. Observers of the banking industry say

it faces particular challenges in that its systems aren’t

built for complex integration. Banking business peo-

ple often don’t have access to critical information that

can help them make the most relevant oers to their

prospective clients. Their sales tools frequently don’t

connect to their customer data, and they may not have

visibility into existing client service, maintenance or

onboarding inquiries.

Patricia Hines, a senior banking analyst with the

consultancy Celent, says stringent government privacy

regulations and a fragmented customer base are caus-

ing some of the problems preventing bigger banks from

adopting a sophisticated RLM strategy. At the same

time, in a sector ripe for disruption from Fintechs,

bringing RLM processes up to speed is becoming ever

more important. Financial institutions, she believes,

need to make use of all available data and analysis if

they want to achieve a richer relationship with their

customers—and creating an enterprise-wide system

with a common view of a customer’s total portfolio is

increasingly necessary. Stepping up to the challenge

could also result in more eective onboarding.

“The most advanced banks have

a system to collect data.…The credit

crisis in 2008 hurried that along because…

banks were exposed. They didn’t truly

know what was going on in their

corporate relationships.”

— Patricia Hines

Senior Banking Analyst

Celent

She says that, as with other industries, when a

bank is familiar with a company’s customers and sup-

pliers, it can address concerns that have an impact on

that customer’s whole business lifecycle. That gives the

nancial institution leverage, in that it can pinpoint

productivity issues facing its customers and oer appro-

priate solutions.

Hines does add that some nancial institutions

are making progress. “The average commercial cus-

tomer has 10 banks and 100 accounts,” says Hines, “so

it isn’t easy to collect all the information necessary to

create a robust RLM system in a cohesive way. Still,

the most advanced banks have a system to collect data.

Some banks have spent the time and money to get it

right—getting the technology in place. The credit cri-

sis in 2008 hurried that along because that was a place

where banks were exposed. They didn’t truly know

what was going on in their corporate relationships—

and unless you know, you’re particularly at risk during

a downturn.

“The best banks are starting from the customer

onboarding perspective,” she notes. “During the sales

cycle they’re gathering that information from a poten-

tial customer, then converting that when they onboard

that client.”

10 | MASTERING REVENUE LIFECYCLE MANAGEMENT

Business leaders in the vanguard say that

eective customer engagement calls for a profound, detailed and

exhaustive understanding of each customer’s business.

hat engagement, in the form of an ongo-

ing commitment to Revenue Lifecycle

Management, presents an opportunity for a

company to reach out at each touch point,

leveraging the information it has garnered

about that client during the course of the relationship.

The goal is to make such encounters satisfactory to the

customer and protable to the company.

To achieve that goal, companies do well when

they make a priority out of formalizing their Revenue

Lifecycle Management framework.

Business leaders in the vanguard say that eective

customer engagement calls for a profound, detailed and

exhaustive understanding of each customer’s business.

True engagement can’t be supercial if the purpose is

to work in tandem with the customer to best tailor a

product or service to her needs. SAP’s Abbarchi says

that’s the credo at his rm.

“We prole our customers,” he says. “You have

to listen and understand very well how the customer

thinks and works internally. You have to uncover what

they perceive as their unique market strength because

every organization will work to maximize their com-

petitive advantage. Because we work on their systems,”

he adds, “we have an enormous amount of data about

our customers. We know how they use our prod-

ucts. We know their behavior. We know whether or

not they use certain features and functionalities of our

applications. This allows us to prole the customer

according to a set of KPIs and then understand what

the customer might need in the next phase of their life-

cycle and work on potential upselling by analyzing the

data we have about that prole.”

The KPI factor

KPIs can and should be an exceptional resource to

reveal how a company’s execution is creating value and

retaining customers. An innovative RLM strategy may

call for a rethinking of current KPIs—and perhaps even

the adoption of a new set. Understanding the impact

that acquisition and retention strategies have on metrics

over time might be seen as the initial step necessary in

the process of aligning marketing eorts around more

customer-centric marketing principles.

Consumption patterns are a key indicator. The most

basic questions some companies are asking themselves

are: Is my product being used? Which products are cus-

tomers using? The ability to accurately describe the

consumption of the products by individual customer is

essential. For example, that information can help them

predict, based on the consumption by certain users

of certain features, whether customers are likely to

renew, or—from a vendor perspective—whether they

are likely to expand. Vendors can also begin to pre-

dict whether their customers are getting business value

from the products by determining if they are using

the features that they have purchased.

A sophisticated and still-evolving system for mea-

suring KPIs is key, say those interviewed. “We track

renewal rates and we track retention rates,” says Gabriel

DEFINING

THE CHALLENGES

Adapting in order to ﬂourish

Companies that are thriving in the advent of the power shift between cus-

tomer and vendor are the ones that have updated their strategies. While many

executives in the survey cite customer retention and revenue growth as key

goals, measuring the success of customer engagement over the longer term is

becoming equally—if not more—important.

12 | MASTERING REVENUE LIFECYCLE MANAGEMENT

Szulik, vice president-renewals at Red Hat, a pro-

vider of open source solutions, “so we not only care

about the dollars we renew, we care about retaining

every single customer, and we actually compensate our

teams by retaining what we call each opportunity. We

have other sets of KPIs, obviously, for each quarter.…

We track the retention and renewal in each quarter, not

just from future or from past quarters. “In the customer

success or customer engagement part of our organi-

zation,” Szulik adds, “we have the customer scorecard,

where we score each of our customers depending on

their engagement, how many times they call in for

support, how many downloads they do of our white

papers, how many times they engage our teams for ser-

vices, for updates, security features, et cetera. We rank

our customers, and we publish a customer scorecard to

our sales teams when it’s time to renew.”a

While subscription-based companies tend to be

more mature at measuring KPIs along the entire cus-

tomer journey, doing so may not be as obvious to

asset-based organizations—although customer expec-

tations have been amplied in both domains.

When too much information is

bad information

Successful adaptation to a customer-centric environ-

ment can depend on the quality of the data amassed and

on the skills of those who interpret it. Some businesses

are nding that while they suspect the data they are col-

lecting is valuable, they don’t know how to harness it

and put it to eective use. Their internal systems don’t

necessarily communicate with one another. This com-

plexity makes arriving at any business decisions dicult,

a fact exacerbated by a lack of analytics professionals.

Of those who say that they at least partially practice

Revenue Lifecycle Management, bad or incomplete

data (30%) is the most often cited shortcoming of their

existing programs—a factor that may be impeding

them from achieving a true overview of their renewals.

While it is a challenge to ensure that the data derived

from RLM is clean and workable, leaders in the eld

say companies that invest the time and eort to make

the most of this resource create a competitive advan

tage that allows for more informed decision making

and an enhanced customer experience.

“How do we make our management systems—all

our internal systems—communicate with each other,

and what kind of decisions can we make out of that

data?” Szulik adds. “How do we make sense out of

that data? I think we are increasingly hiring more data

scientists—young, very smart kids with math and ana-

lytics background—who can actually look at the data

and make sense of it. I talk to a lot of our competi-

tors and peers, and every company is going through the

same challenge.”

Back to basics

On the other hand, TSIA’s J.B. Wood says deriv-

ing basic information from data is within the capacity

of most companies, who need to start by positing a the-

ory, then testing it.

“It’s easy for most companies to ask: what do we

believe are the key consumption patterns that are help-

ful?” he explains. “It doesn’t take a lot to segment

people who are using a company’s features or prod-

ucts versus people who aren’t. Once they determine

whether or not their theories are valid, then you get

into a third stage—descriptive analytics, predictive

analytics and what we call outcome analytics.

“We track renewal rates and we track

retention rates, so we not only care about

the dollars we renew, we care about

retaining every single customer, and we

actually compensate our teams by retaining

what we call each opportunity.”

— Gabriel Szulik

Vice President-Renewals

Red Hat

“Then you start to say, wow, can I really look at

the top-performing customers—the customers who are

getting the most value and the most user adoption and

say, what are they doing? What’s the science behind

creating not just high-adoption customers but high-

performing customers—customers who are getting the

leading-edge business outcomes from technology—

and how did that happen? How do we recreate that

sequence across the entire base of customers?”

Making sure the data they are accessing is packaged

in a practical way is an issue that market leaders are

actively trying to address. But getting it done is often a

work in progress.

DELL

FORMALIZING RLM

“We’ve started to think about it like this,” says Lou Mabley, execu-

tive director, services at Dell. “Our clients are buying into services

that we provide. It’s less about extracting upfront cost and more

about maintaining a customer under coverage for a long time.

We’re looking at how long customers have been with us and

basing our pricing accordingly. We’re looking at longer-term

arrangements beyond the one-year model and are moving into

longer and more proﬁtable arrangements.

“We started formalizing RLM for smaller parts of the business that were software-related. Now

we’re trying to look at how that model plays within the hardware space. We haven’t formalized it

in hardware, but it’s certainly part of our discussion set and how we’re thinking about future plans.

“We’re looking from quote delivery to upsell rate, to conversion rate. We put analytics behind

each one of those and ask, are they going up or down? Where are they now? Where are we not

winning? We can predict by certain processes. For example, we’ve deployed new technology,

which is helping us deliver quotes faster. We’re using that kind of predictive analytics to say, ‘All

right, if we stretch that best practice across globally, how will that aect our P&L? How will that

aect our customer’s coverage?’

“We try to make sure that we have a really clear customer lifecycle approach that’s driven by

a couple of insights. One, let’s make sure that we’re marking expiration dates and changes in

service as key times to talk to customers. Six months prior to expiration of coverage, we’ll make

sure we’re having the right conversation about what customers need from a hardware stand

point and where are you looking in your journey toward hardware solutions. Three months prior,

we start talking to them about keeping the right support model that’s reﬂective of how you’re

trying to use the technology. One of the things we do is we ensure that there is cross-pollination

support among our divisions, so if you’re in hardware sales, you receive a portion of credit for

renewals. You’re motivated to have both conversations to ensure that what you’re proposing is

right for the customer.

“Onboarding, upselling and renewal are probably where we’re most mature. We’re still working

on adoption within our new software space—and how to better drive those conversations.”

14 | MASTERING REVENUE LIFECYCLE MANAGEMENT

CONCLUSION

Those interviewed for this survey isolated several investments, tactics and

strategies that have enabled them to establish successful customer engage-

ment practices, which in turn led to more revenue. Their methods of meeting

the challenges presented by the new vendor-customer dynamic include:

Providing value on a daily basis:

A profound understanding of customer interests, goals and needs can’t be attained in a piecemeal fashion. A true

partnership that drives success for both parties requires ongoing, frequent updates and check-ins.

“We engage with the customer. We analyze how they use our applications, and we can benchmark all their internal

processes as well as IT KPIs with their peers in the same industry. We can then suggest where they should invest

in order to ll the gaps or where they have opportunities for improvement and which support services, for which the

customer is already paying for, could be leveraged to improve. When a customer is happy and can perceive the return

on the investment—the value in our oerings—then they keep on investing, and we can maximize our sales.”

—Augusto Abbarchi, SAP

Following the money—long term:

The subscription economy has changed the nature of customer service, but its impact has permeated throughout

other forms of enterprise as well. Those who still maintain a one-o sale mind-set stand to lose in this new envi-

ronment. Those who understand the need to take advantage of each stage of RLM can maximize their revenues.

“The problem is that [some companies] are very strong in technology. They fall in love with technology, and they

think that talking about new technology will make the customer excited. But this is not the case. Customers have

their own business to manage. They don’t care if their technology is fantastic. They want to know what it means for

them—what kind of outcomes it can give to their business. Otherwise, it’s just a technology gadget. You can buy a

nice one because you are excited by the technology, but you don’t buy two, three, four, ve or 10 million informa-

tion systems just because they’re nice. They have to be eective in their business and drive the expected outcomes.”

—Augusto Abbarchi, SAP

Focusing on the customers’ metrics:

Having a revealing system of metrics is an invaluable tool for one’s own organization, interview participants agreed,

but added that it’s just as critical to gain an in-depth understanding of clients’ metrics as well, since the success of

both enterprises may rest on understanding these vital signs.

“What tech companies have not historically always done a great job of is understanding what the best business out-

come metrics are for the customers. How does a product specically improve their revenue or reduce their cost? What

specic productivity metrics will improve? What is dierent at a retailer versus a bank? How do we describe the

outcomes from a customer perspective, not just an internal perspective?”

—J.B. Wood, TSIA

Partnering with customers on business outcomes to drive revenue:

A thorough grasp of a customers’ KPIs gives suppliers a rare opportunity to build a long-term, close relationship

with their clientele that can have a signicant impact on the bottom line.

“If you as a customer don’t see value in what we provide, in theory, you can do it yourself. So it’s very critical that

we actually provide value every single day to our customers through our subscription, because otherwise they don’t

come back next year and renew their subscription.

“What it does to our culture and to our business, is every day when we come to work, we’re forced to be honest

and to provide value to our customers—not just invoice them once a year and come back for maintenance. It’s a

very dierent model.

”

—Gabriel Szulik, Red Hat

“Innovation is all about trust, and trust can only be there if the relationship is very good. If you never let the cus-

tomer down—if you never oversell something to the customer. For us, it’s very important to nurture the relationship

with customers, and the quality of the relationship will determine the business for the coming future.”

—Augusto Abbarchi, SAP

Keeping abreast of suppliers’ and customers’ KPIs along the entire revenue lifecycle:

KPIs are a moving target, and companies may need to evolve the design of their KPIs to reect new troves of infor-

mation that may be embedded in data.

“You have to deploy predictive analytics to measure success across the various customer lifecycle processes and to cap-

ture and implement best practices globally.”

—Lou Mabley, Dell

16 | MASTERING REVENUE LIFECYCLE MANAGEMENT

KEY TAKEAWAYS

FOR MEETING

THESE CHALLENGES

Make a commitment to investing in RLM a priority. Companies that do so see higher returns—but not

enough of them are giving RLM the attention it deserves, as market leaders recognize:

“We’re trying to drive our customers toward our consulting services, our software services and deeper into our tech-

nology services. I think that’s something we’re getting stronger at, but our work there is still not as good as our

customer acquisition through upsell. I do think retention is denitely a strength of ours as well. If I were to say

onboarding, upsell, renewal, then retention and probably adoption and cross-sell are where we’re developing.”

—Lou Mabley, Dell

Consider partnering with companies who have the expertise and ability to deliver a comprehensive

approach to Revenue Lifecycle Management. Doing so is one way to give companies a decided competi-

tive edge.

“We are working with a partner to understand and improve how we do onboarding, adoption, et cetera, with the

thousands of customers who are more dicult to reach directly. Right now we do a lot of work in the rst and last

90 days of the subscription; however, what we are working on now is how and when we engage them in the middle

of their lifecycle.”

—Gabriel Szulik, Red Hat

Recognize and act on the fact that the subscription economy has also raised customer expectations over

the service they receive on their assets. An RLM system that produces data at all touch points can be just as

useful in onboarding, retaining, renewing, upselling and cross-selling hardware-purchasing customers as it is

for SaaS ones.

“We’re trying to streamline our processes so that we have one sales rep who’s having a lifecycle discussion about

Dell solutions. Each rep is having conversations with our customers about how to keep them under coverage and in

support—and what that means in global fashion, rather than in just pieces and parts.”

—Lou Mabley, Dell

Successful customer outcomes are the key to a healthy bottom line. With the rapid convergence of technol-

ogy, enterprise and software, the KPIs and success of a company’s customers are at least as important as its

own.

“It’s very critical that we are honest and provide value every single day to our customers, because otherwise they

won’t renew. It’s a culture of taking care of your customers, not just once a year, or once a quarter when you need

to sell and make your number, but increasing value to our customers throughout the entire year.”

—Gabriel Szulik, Red Hat

18 | MASTERING REVENUE LIFECYCLE MANAGEMENT

ACKNOWLEDGMENTS

Forbes Insights and ServiceSource would like to thank

the following individuals for their time and expertise:

Augusto Abbarchi

SVP and Global Head of Maintenance Go-to-Market

SAP

Patricia Hines

Senior Banking Analyst

Celent

Lou Mabley

Executive Director, Services

Dell

Gabriel Szulik

Vice President–Renewals

Red Hat

J.B. Wood

President

Technology Services Industry Association

METHODOLOGY

The data in this report is derived from a global survey of 334

C-suite executives and senior managers conducted by Forbes

Insights in August 2015. Half the leaders polled are in the U.S.,

28% are in Europe and 22% are in the Asia-Paciﬁc region.

Industries included software, hardware, industrial systems

manufacturing, SaaS, Intelligent device manufacturing, value-

added reseller, information subscription services and medical

device manufacturing. All companies represented have at

least $250 million in annual revenues; 36% have between $1

billion and $10 billion in revenue; 23% have more than $10 bil-

lion in revenue.

ABOUT

FORBES INSIGHTS

Forbes Insights is the strategic research and thought leadership practice of Forbes Media, publisher

of Forbes magazine and Forbes.com, whose combined media properties reach nearly 75 million

business decision makers worldwide on a monthly basis. Taking advantage of a proprietary database

of senior-level executives in the Forbes community, Forbes Insights conducts research on a host of

topics of interest to C-level executives, senior marketing professionals, small business owners and

those who aspire to positions of leadership, as well as providing deep insights into issues and trends

surrounding wealth creation and wealth management.

499 Washington Blvd., Jersey City, NJ 07310 | 212.366.8890 | www.forbes.com/forbesinsights

FORBES INSIGHTS

Bruce Rogers

Chief Insights Ocer

Erika Maguire

Project Manager

EDITORIAL

Kasia Wandycz Moreno, Director

Hugo S. Moreno, Director

Rosa Harris, Report Author

Kari Pagnano, Designer

RESEARCH

Ross Gagnon, Director

Kimberly Kurata, Research Analyst

SALES

North America

Brian McLeod, Commercial Director

bmcleod@forbes.com

Matthew Muszala, Manager

William Thompson, Manager

EMEA

Tibor Fuchsel, Managing Director

APAC

Serene Lee, Executive Director