Achieving business success today can be a demanding process, and there are times when it feels like you have to keep many different plates spinning at the same time just to keep your head above water. For any organisation, the Holy Grail is to achieve a regular, recurring stream of revenue that will allow you to build a platform for long-term, sustainable growth.
However, the truth of the matter is that in order to achieve this, it’s becoming increasingly necessary to keep more plates spinning than ever before by dealing with an increasing number of ‘added-value’ third-party vendors. So what’s the secret to managing this, and to keeping your plates spinning and the stream of revenue moving?
Targeting a regular level of recurring revenue may sound like a simple task, but the truth is that the days when you could simply rely on your quality of service or the strength of you business relationships to source regular revenue are over. Today, customers have more choice than ever, while newer, subscription-based methods of consumption mean that customer churn is on the increase. The upshot of this is that businesses need to work harder than ever to keep their customers by offering added-value services, many of which are taken care of by third-party vendors.
Management of each of these third parties can, however, be a costly and time-consuming exercise in itself, and is often seen as a necessary evil because many businesses do not have the core capabilities they need in order to be able to offer them themselves.
Let’s say that you run a business, and have set your sights on guaranteeing customer loyalty, and regular income. You might have one vendor that focuses on data analytics used to track customer behavior, another focused on providing quotes and research and perhaps even another focusing purely on sales. Remember that each of these vendors has their own specific KPIs, their own specific needs and their own distinct ways of operating. All of which could mean that half your day is spent just ensuring that all of these are met, before you can even consider the effect they can have on improving customer loyalty.
The obvious solution is, of course, to consolidate each of these services and bring in one supplier to manage all of them on your behalf. By selecting one managed services provider to handle all areas of your business that relate to ensuring recurring revenues for your business, the load can be lifted, and business leaders can be left to concentrate on their day job. So why don’t more organisations select only one managed services provider, and instead elect to use multiple suppliers?
The reasons for this can vary, but typically, businesses choose a multi-sourcing strategy because they feel that it spreads the risk, and that it can help to bring in niche suppliers who perhaps have specific expertise in a given area. This may work for larger organisations who are made up of a number of different functions that work in isolation, but if the business feels that the best way to achieve growth is to get back to basics by ensuring recurring revenue through a number of different services, then it can present problems.
If all suppliers are not unified in terms of working together to achieve a common goal or objective, it can quickly and easily turn into a mess, which can, in itself, make the process of supplier management a more difficult one. For the end user, the task of consolidating the efforts of each of these third party vendors and ensuring that all of these information sources are able to make a positive impact on renewal rates can be an exhausting process.
If your business is looking to maximise recurring revenue as a means of achieving growth, it helps to have everyone on the same page. Indeed, a study independently verified by the SEC has shown that using one managed services provider as a route to growth can improve customer renewal rates by an average 15 per cent. Any performance artist will tell you that spinning one plate is easier than keeping four or five spinning at the same time. So why not consolidate each of these plates into one, easy to manage services provider that can ensure a regular stream of profitability?