Digging for Marketing Gold: 6 Tips for Mining New Revenue Streams
The search for gold can be simplified if you know where to look. More often than not, it’s right under your nose. It's in your customer transaction data, point-of-sale systems and ordering platforms. It exists within the walls of your own organization and within your partners’ data repositories. It’s ripe with information that can lead to a successful warranty and maintenance contract initiative and millions of dollars in additional revenue. The best part is that these monetary rewards aren't only immediate and impressive, but they’re also ongoing. Service contracts provide a recurring revenue stream.
For most marketers, the challenge of warranty and maintenance programs lies in the time and labor required to find opportunities that can be turned into a revenue stream. For businesses that sell thousands of products each year, new cloud-based platforms and automation technologies that help companies dig deep into data and unlock the full potential of service sales are sorely needed. Why? Because they eliminate the hassle of mining and managing service contract opportunities attached to products sold while quickly improving profits and revenues at the same time.
How can you mine gold from your existing marketing data and play to win in 2012? Here are six tips to consider if you’re ready to reap the rewards of increased maintenance and service contract sales:
1. Know the issue. Maintenance and service contracts are attached to a high percentage of products sold. In the IT sector, experts say these contracts generate $60 billion a year in revenues in North America alone. Yet manufacturers fail to capitalize on up to 36 percent of the service revenue annuity stream in this market.
The problem is that service contract information is captured in different formats and systems — by manufacturers, distributors, channel partners and at various points in time. When contracts come up for sale or renewal, more often than not this information can’t be easily or accurately retrieved from internal systems, so the data and accompanying sales are lost.
2. Know the opportunity. You already have the customer’s trust and buying information. Your own records can serve as product lifecycle management tools to help provide better customer service, uncover market preferences, predict when service contracts will expire and set the stage for product “refresh” sales. Armed with the knowledge that exists in your own customer records, you can gain valuable business intelligence that will empower you to approach each customer at the right time with the right marketing pitch.
3. Know the environment. In a challenging economy, customers may be more likely to extend the life of a product they already own rather than buy a new one. They'll probably opt to renew a maintenance contract attached to that product to ensure that it’s protected. The challenge is when entered into a conventional spreadsheet or database, these contracts can become difficult to track. A more sophisticated solution is often necessary — one that automates the process of reaching out to customers to pursue the renewal of a warranty or maintenance contract just as it’s about to expire. If this process isn't done properly, you can miss out on the opportunity for a timely sale or renewal and fall short of serving your customer promptly and effectively.
4. Know your customers. Get a pulse on your customers’ buying behavior. Keep track of product lifecycle information and use lifecycle management strategies to capture customers’ contact data. Track which products they bought from you, when and for how much. You can use this information to build powerful data analytics to know your customers and your market better and stay on top of service contract opportunities.
5. Know your numbers. Maintain good records and update them regularly with high-quality information. The more customer transaction details gathered up front, the better equipped you’ll be to capitalize on service sales opportunities. Make sure the information is “actionable,” meaning you have accurate, quality information which will enable you to successfully reach your customers to pursue new business over time, whether it’s service contract sales, product sales or other programs. Also, complete customer records help drive stronger sales and marketing campaigns.
6. Know your team. Communicate to your team that maintenance contracts are a top priority. They promote customer loyalty and set the stage for follow-up product sales.
There's clearly a lot involved with the successful implementation of warranty and maintenance programs. Regardless of whether you plan to turn to the cloud for service contract management, you can drop the prospector’s pickax and pan. You’ll find richer rewards nearer the surface and closer to home if you resolve to do a better job of mining and managing your data.