How You Can Drive More Repeatable and Predictable Revenue in 2017
I’ve been putting my Amazon Echo through its paces lately. Its voice recognition service, Alexa, and I have established a pretty close relationship: “Alexa, call Uber”, “Alexa, buy How Far Can You Go? by John Maclean”, “Alexa, it’s a little chilly, raise the temperature to 70 degrees.” You get the idea.
But while this Jetsons-like service is pretty amazing unto itself, I got to thinking about one of Echo’s primary design goals that’s not so obvious: make it really easy for me to regularly spend more money with Amazon.
Don’t get me wrong, I get a lot of value out of this device and the service it provides. But you’ve got to hand it to Amazon for their brilliant strategy to prime the recurring revenue pump as it were. As prompt and courteous as she is, do you think Alexa is tracking and influencing my shopping habits or the digital content I consume through movies, books or music? Do you think the growing number of third-party apps are making it really easy for me to buy more stuff? And do you think this leads to a repeatable, predictable revenue stream for Amazon. Yes, yes and absolutely yes.
While this example may not represent the holy grail of a B2B recurring revenue model, it does illustrate the extent to which companies are revamping their business models to capture more recurring revenue and customer lifecycle opportunities. At Cisco, we’ve been very clear in our intent to transition our business to a more software- and subscription-driven model. Our Q1FY17 earnings reflect this with 48 percent growth in our product deferred revenue related to recurring software and subscriptions.
As critical it is for Cisco to align our business model to the way our customers want to consume our technology, it’s equally critical that we help and enable our partners to transform as well. Last month at Partner Summit, Scott Brown and I unveiled our latest efforts to help partners build their recurring revenue and customer lifecycle practices using Lifecycle Advantage and SuccessHub, with a goal of creating happy customers for life.
Both of these initiatives are designed to address the demands of today’s new kind of IT buyer. These buyers want ROI and outcomes, which is why actively managing the post-sale relationship lifecycle—ensuring customers are gaining full value from the solutions they’ve purchased—is essential. The Lifecycle Advantage program combines analytics, automation and personalized content to enable partners to nurture adoption and customer success. With Lifecycle Advantage, partners can gain digital capabilities and fuel email campaigns that address every stage of the post-sale journey. Partners can also use data and analytics to simplify software and service renewals and more easily predict and anticipate customers’ needs and address them proactively.
Those partners who piloted Lifecycle Advantage reported customer reach increased five times, click rates increased nine times and renew close rates increased 20 percent. Most importantly, using data, analytics and forward- and backward-looking metrics, partners can ensure the Cisco products and services they offer deliver the business outcomes customers signed up for. It’s no wonder, Channelnomics recently recognized Cisco with their Channel Transformation Award for Lifecycle Advantage.
Check out how Lifecycle Advantage helped improve customer satisfaction and accelerate renewal growth for Cisco Gold Partner Red River.
We recognize that transitioning your business for the changing market won’t happen overnight. That’s where SuccessHub comes in. SuccessHub is a one-stop portal that guides Cisco partners to establish a best-in-class customer success practice. Featuring a rich and comprehensive library of tools and resources—videos, webinars, white papers, playbooks, best practices and more—partners can learn how to improve adoption.
If only building a recurring revenue practice was as easy as asking Alexa to order a pizza. The reality is, Lifecycle Advantage and SuccessHub can help you deliver a nearly Alexa-like experience to your customers, paving the way for you to expand your recurring revenue relationships with them.
Want to learn more about building a customer lifecycle practice? http://www.cisco.com/go/successhub
If you are not a partner with Cisco, learn how to get started today.
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