In a tight economy, every sale counts, even the small ones. That's particularly true for the 3,700 North American resellers that provide service to the customers of $38 billion Ingram Micro, a global IT distributor and a Fortune 100 company.
The resellers provide the first line of contact and support to users of everything from Apple iPads to IBM servers and Cisco networking equipment. But renewing a service contract is a time-consuming task, and account reps can't easily track every contract nearing its expiration date.
Two years ago, Ingram executives became concerned that many of the company's smaller customer contracts were expiring more frequently than those of its large customers. The reason was obvious: Salespeople tended to put more time into renewing the higher-priced service contracts, which carry higher commissions.
However, the small contracts -- $25,000 and under -- accounted for 95% of Ingram's SMARTnet support customers. So the cumulative value of those "small" contracts was by no means small. Moreover, failure to renew a contract in a timely manner could lead to a permanent loss of business.
Enter MaintenanceNet, a Carlsbad, Calif., company that provides IT services to automate the handling of contracts. MaintenanceNet tapped into Ingram's enterprise systems and data, as well as those of its reseller partners, and set up a contract renewal process that pulls data from the ERP and CRM systems, product catalogs, pricing documents, and point-of-sale, ordering and transaction systems, and then identifies expiring contracts, verifies product and service availability, and emails everything to the appropriate reseller 90 days before the expiration date.
Tom Sweeney, an analyst at ServiceXRG, a consulting firm that helps companies develop and execute service strategies, says this approach optimizes revenue from a large number of contracts without an excessive investment of human or technical resources.
"I'm not going to sell a 3-cent service contract on every pencil that I sell if it's an intensive process," says Sweeney. "But if it's automated, all of a sudden you generate a whole lot of incremental revenue without throwing a bunch of bodies at it."
For Ingram Micro, a new contract renewal system powered by business intelligence delivered more than $220 million in automated quote opportunities to resellers each quarter and resulted in a 135% overall increase in revenue from renewals.