Big change can mean big challenges. A leading cloud services company shifting from perpetual licensing to a subscription (SaaS) model learned this firsthand—particularly with their channel sales. Churn rates increased dramatically. At first, the client couldn’t identify the churn risk indicators—then, they realized channel partners were going around the migration effort by ending perpetual contracts (which showed up as churn in reports) and creating net new subscription contracts to increase their margins.
Meanwhile, the company’s CRM system and data weren’t set up to handle the shift efficiently. This led to a backlog of 6,000+ support cases about moving from perpetual licenses to subscriptions.
And the challenges kept multiplying: the company didn’t have defined processes to support the migration and address customers’ concerns (like security and the extra effort involved to implement the software in a complex environment). Without a strong renewal management strategy, it was only converting 2-3 percent of its customer base each month to its subscription offerings.
Time was ticking. So we leapt into action—creating a 10-person team in Kuala Lumpur to support the client’s migration effort, move the pipeline from perpetual licensing to subscription services, and resolve the 6,000+ support case backlog. All in a month’s work.
Next, we added a second team of 20 people to clean up the CRM data by comparing each contract between the old and the new systems (verifying details at every level). We also deployed a team of three ops specialists to work on the internal ticketing system—assigning, checking, and resolving partner requests quickly and accurately.
Two partner specialists were involved. One focused on process design and internal process optimization. The other worked with the company’s largest channel clients to standardize processes and connect the dots between the perpetual licensing and SaaS models. These partner specialists designed, implemented, and managed internal and external workflows for various business units. This meant training new hires, answering questions about critical scenarios, assisting the client’s internal teams, and resolving support questions.
There were a few more loose ends to take care of—like changing the channel partner policy to keep the same margins for partners when they migrated customers to a subscription contract. We also created a partner stack ranking system and conducted quarterly business reviews (QBRs) with underperforming channel partners.
And we got everyone talking: the renewals advisors, partner specialist, client partner, account manager, and partner’s representatives triaged the relationship and developed deep insights into the partner community.
To keep these great conversations going, we created a health check motion to pave the way for renewal management. This helped our advisors either set the stage for cross-selling or upselling to satisfied customers, or to identify churn risks and pass the account to the internal customer success management team. We made sure there was a closed feedback loop between the monthly health checks and a voice of the customer / voice of the partner program.
More recently, we created a team of 20 global business development advisors to help the client identify and prep perpetual customers to migrate to a subscription model. Our advisors reach out to prospective customers, identify their needs, and qualify the customer to pass to the client’s internal account managers.
Our renewal management team created and initiated action plans to combat competition, improve internal processes, and overall customer and partner satisfaction—with some pretty glowing results:
- 85 percent on-time renewal rate for the subscription/SaaS business
- 92 percent on-time renewal rate for the perpetual business
- 80 percent reduction in churn via health checks
- 15 percent monthly conversion from perpetual license to the subscription model—a 500% improvement (no, that’s not a typo!)
- 6,000+ support cases resolved in one month
- 56 percent of wrongly created contracts corrected