By Emily Lehnen
Senior Marketing Manager
With product revenue decreasing, service managers are being pressured to meet the dual goals of cutting costs and increasing revenues. One of the best ways for companies to accomplish this is by doing a better job of meeting the service obligations under contract, and by placing more customers under contracts, leading to a higher and more predictable revenue stream.
In a new benchmark report titled Service
Contract Management: Winning Strategies for Managing Customer's Expectation, the AberdeenGroup reported that companies that effectively manage their contracts experience significant competitive advantages, including:
26% increase in service revenue
90% contract renewal rate
28% increase in SLA agreement/contract compliance
These companies employ a number of strategies and capabilities to achieve these results. REan on for four key recommendations from Aberdeen on your company can improve contract management.
RECOMMENDATION #1
Automate key service contract processes
Lack of technology to help automate the management of contracts is cited as one of the biggest challenges to putting customers on long-term contracts.
Fully automated contract management
Automate contract pricing, renewals and approvals. Metrix contract management will help your company create, execute, revise, monitor and administer service contracts from initial quoting and pricing to automatic renewal and billing.
RECOMMENDATION #2
Expand contract service portfolio
Having a wider portfolio of offerings, especially meter contracts and self-renewing contracts, improves contract renewal rates.
Easily manage evergreen, self-renewing and tiered-service contracts
Many companies shy away from more complex contract offerings such as meter and self-renewing contracts because they are more complicated. With Metrix, you set up contracts based on rules. These rules may define coverage types and response times, part and labor coverage as well as OEM warranty coverage. Contract rules can also define renewal terms, current and future contract pricing as well as contract entitlements. Simply define the rules, and the system takes care of the rest, creating a way to bolster renewals with minimal effort.
RECOMMENDATION #3
Integrate contract management with service execution
Every year, an estimated 10%-12% of service revenue is lost due to poor management of service contracts.
Stop service “giveaways” through improved visibility
The Metrix contracts module is fully integrated with all other aspects of the field service solution, including scheduling/dispatch, parts management and reverse logistics. Metrix Mobile gives field techs real-time visibility into contracts, and allows for cross-selling/up-selling opportunities.
RECOMMENDATION #4
Measure service performance against contract obligation
Without this information, you will not be able to successfully attain improved level of SLA compliance, and therefore will find it difficult to incorporate expanded contract offerings.
Gain greater visibility into contract performance
You don’t know how you are doing unless you can measure it. With Metrix all the data you need is available, providing information you can act on.
Want to learn more? Download the whole report, or go to our Key Findings site for a summary of the report's statistics, strategies and recommendations.
Labels: Contract management, field servce software, field service automation, warranty management