Revenue Streams

For the modern company to prosper it is important to retain as many customers as possible. Retaining customers is cheaper than finding new customers and happy customers will usually pay a premium price if they are satisfied with the service they receive. Customers that are really pleased with the service you provide become advocates and these customers make good reference sites and provide referrals.

Often suppliers think that customers are more price conscious than they actually are. If you think your customers are price conscious, you need to test your assumption and ask yourself how much money is on the table for the products and services you provide.

One of the most common reasons for unhappy customers is because the supplier thinks the customer is more price conscious than they actually are and many problems are logged as support problems because it is perceived that that is the only way of resolving them.

Often customers do not realise that alternative solutions exist. If they did realise other solutions existed, they might be prepared to invest in upgrading the hardware, software, operating system or networking necessary to solve problems at the route source.

All potential sources of revenue should be reviewed for each customer and your company’s strategy should ensure that revenue streams are maximised in the future. The following list of revenue streams is not exhaustive and others should be added:-

  • New sales
  • New product developments
  • Support and maintenance contracts
  • Consultancy
  • Training
  • Bespoke work
  • Product development
  • Development work done for one user could be sold to other users
  • Create upgrade path to maximise revenues from existing users

Many customers actually use Support to solve problems which should be resolved by training or consultancy. The sorts of problems which require training or consultancy are not easily resolved by Support and this leads to Customer perception problems whereby they believe the Support service they are receiving is not up to standard.

The best way to avoid this kind of problem is to recognise its potential prior to it arising. Once the problem has arisen it is difficult to resolve and will almost certainly require management involvement, whereas the problem can be avoided by educating the Customer as early as possible in the sales cycle as to the services available and the exact role of Support. All quotes and pre and post sales correspondence and quotes should provide a budgetary figure for ongoing services, including consultancy and training.

As soon as support problems arise which should be resolved by other means, the support department should notify the account manager or sales person. Prompt action and an explanation by the account manager or sales person should forestall the problems which can only cause a deterioration in relationship if not resolved sooner rather than later.

Points to remember:-

  • Recognise non support problems as soon as they arise
  • Deal with non support problems promptly
  • Maximise income by selling hardware or services to resolve problems
  • Make sure money spent results in improved performance or other benefits
  • Do not assume the customer has no money
  • Provided the customer gets improved performance they are usually happy to pay
  • Make it easier for the customer to have you resolve the problems than for your competitor to resolve them.
 
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