There is an expansion in CSP revenue for Microsoft partners, as demand continues to rise within the Microsoft Cloud market. Yet, we also see CSPs struggling to accelerate past initial roadblocks to scale their recurring revenue. As your client number begins to increase, so does the workload and the customer’s expectations. What results is a bottleneck creating friction in your revenue growth plan.
If your CSP business is experiencing any of these eight friction areas, it’s time to examine a new process and/or system.
This first example is very common, and if you’re reading this, I’m sure you’re nodding your head. Tracking changes through email communication, then documenting that change in an excel spreadsheet can be painful work. Steve Cakebread called out this type of process in a recent interview with his former colleague, Tien Tzuo: “automation is key. A lot of companies realize this way too late. You can’t just throw bodies at the problem anymore. People just don’t want to do that kind of work these days.”
2. Revenue/Sales Models and Billing are not aligned
A sales strategy not aligned with your billing processes is a recipe for significant friction amongst critical teams. Striking the right balance between allowing your sales team to be more creative in product definition, pricing, and deal terms and your billing teams’ ability to support and provision these requests is paramount. Creating a harmonious workflow between each team enables your sellers to spend more time closing business, with your billing team collecting Cash more efficiently.
3. Sales Teams are spending too much time to turn around quotes
If you’re a sales team member, you dread having that quote returned to you with corrections from your billing team. If you’re a sales leader or a business owner, you want your sales team out in the field selling. Creating a standard process for quoting, including product definition, terms, and pricing parameters, frees up your sales team to sell more. Having to customize pricing on every deal creates friction in your sales velocity and slows revenue.
4. Waiting until you receive Microsoft/Provider Invoices to invoice your customers
This area is also quite common with CSPs, who are keen on waiting for providers to invoice before sending out client invoices. The result is friction with cash flow and increasing risk, in that you don’t know what your customers have purchased and have no record through the billing period. This strategy is reactive, which customers don’t like and can lead to attrition.
5. Collecting cash before provisioning
We see this a lot from Dynamics customers, and it’s an outdated model that can decrease client satisfaction. This strategy often stems from the difficulty in accommodating changes or tracking changes between collecting Cash and provisioning. This area is ripe for automation and needs to be examined before your customer satisfaction begins to decrease.
6. You only have one billing frequency
What’s best for you is not always what’s best for the customer, unfortunately. However, this challenge is a good thing because your client list is beginning to grow, and enabling your team to offer multiple billing frequencies without impacting the business is a natural step in your CSP business’s growth. Customers expect certain flexibility, and promoting this within your systems will empower your sales teams to close deals faster.
We’re now deep in the customer experience conversation because this is one request we repeatedly hear from customers: they want transparency and the ability to manage their licenses on their own. In the CSP world, customer experience is the leading indicator of customer retention, and providing an optimal experience is why customers stay. Creating a self-service portal is what customers want. Of course, you should put guard rails in place, including a view into when changes were made and by whom. Manually entering these changes, creating reports to track the changes, then processing the addition/reduction all creates a long process.
8. You spend too much time on reconciliation
Reconciliation is undoubtedly a hot-button concern for all billing teams. They want everything to match up correctly, and rightfully so. The fastest way to alleviate this concern is to have an integrated system that connects provisioning with billing. This automation relieves stress on your billing team, mitigates the risk of any error, and helps everyone focus on the areas of work that excite them.
If you’ve read this far, so you must be experiencing at least one of these challenges. The good news is Work 365 has you covered. Even better news: Microsoft Incentive Co-op funds can be utilized for the purchase of Work 365. If you’re a CSP partner and want to accelerate your business’s growth this year, visit the page to learn more about Work 365.
I am a Dynamics 365 enthusiast. I enjoy building systems and working with cross-functional teams to solve problems and build processes from lead generation to cash collection. Work 365 is a global developer of the Billing Automation and subscription application for Dynamics. Helping companies to streamline business processes and scale their recurring revenue.