We had an amazing evening at the Women in Services dinner last night with 100 women in attendance — it was THE place to be in Silicon Valley. The event is a fundraiser for the non-profit Dress for Success. Dress for Success provides career attire for women who are in need. They also provide career services to help women obtain work in order to support themselves and/or their families.

Ana Pinczuk, VP of Services at CISCO, gave the keynote. I personally appreciate her sense of style and individuality — you have a great presence, Ana. And Ana’s keynote spurred some meaningful conversations at our table where women were sharing business experiences to help each other with tough challenges.

Maria Chapman is our resident fashionista at TSIA and she helped choose amazing raffle prizes — Versace scarf, Tiffany bracelet, Chloe sunglasses, and an i-Pad 2.  Lots of oooohs and aaaahs from the attendees — the prizes certainly exceeded the attendees expectations.

I’ll tell you what … Diane Brundage, SVP of TSIA, knows how to throw a great party  — and I’m not the only one who thinks so.

What did YOU think of the event?

Very engaging session this morning with about 60 attendees at the Service Revenue Generation Executive Breakfast, held during the TSW conference.

The big topics that attendees talked about were two fold:

1.  Formal management of the recurring service portfolio
Many companies don’t have a person whose “day job” is to manage the recurring service portfolio. They beg, borrow, and steal resources from the Product Marketing team or just don’t pay enough attention to it. The TSIA SRG benchmark study reports that, on average, 45% of total company revenues are recurring service revenues. This significant revenue stream deserves more strategic investment — deploying a dedicated, Service Product Management function to shape and renovate the portfolio is an investment that many companies are considering.

2.  The role of channel partners with renewal sales
The TSIA SRG benchmark study reports that channel partner renewal rates, on average, are 20 points lower than technology companies’ overall renewal rate. AND … for companies in our benchmark study that have a higher reliance on channel parters in the renewal sales process, partners add, on average, 10 points of sales costs.

So there was discussion around when and how to use channel partners. Partners are helpful when expanding into international markets. But for markets where technology companies are well established, the additional costs and inferior performance associated with channel partners needs to be put on the table with senior executives.

Are you making changes with your sales coverage model for renewing recurring services?

I’ve been asked to highlight my “top picks” for the upcoming TSIA conference in May.

We have a great Service Revenue Generation track lined up for you. Among my favorites are:

Panel: Industry Leaders are Actively Evolving their Business Models for Growth

TSIA has a newly formed community of Service Sales and Marketing leaders. Man, these people are smart. I have immensely enjoyed getting to know each of them and I know you will too. We will have 5 of our Founding Members, including Bryan Belmont of Microsoft, Robert Deshaies of Sage, and Christophe Bodin of BMC Software, join a panel to tackle tough topics that many of you have on your mind. Here’s a sample of the topics:

• Sales Coverage:  The pro’s and con’s of various service selling models. Direct sales vs. partner sales. Deploying a dedicated service sales force vs. tapping the product sales force to sell services.
• Service Portfolio:  What it takes to build the right service offerings that customers will pay more money for.
• Transition to Cloud Offerings:  How quickly are companies shifting their portfolios to Cloud Computing? What are the unique challenges with the transition to cloud computing?

Managing Customer Churn

What I’m finding as I talk with technology companies is that everyone is a hybrid – they have both cloud computing offerings as well as the more traditional maintenance and support offerings. And everyone wants to know how to be successful with their cloud computing customers.

Daniel Bankert of eVault, (a division of Seagate) will share the innovative things he’s doing to not only keep customers but also add more value to them, amidst significant pricing challenges. You will find Daniel to be very passionate about this topic and creative with his solutions.

We all know it’s a dog fight in the market so it costs companies a tremendous amount of money to acquire new customers. Daniel and I have had some lively conversations about “customer churn” and we share the point of view that a hallmark of successful cloud computing businesses will be the extent to which they keep and grow their customers.

Secure Cloud Communications

Torsten Raak of Siemens can’t wait to share the journey Siemens has taken to make bold new moves in their markets.

Siemens Enterprise Communications recently announced the availability of OpenScape Cloud Communications, a public cloud offering with “One Number Service”, Instant Messaging, Web Collaboration, Mobile Access and much more. It’s sold in a 100% indirect model.

Come hear Torsten talk about the extensive market research they conducted in order to determine the components and pricing of this new offer. And how they’re enabling their channel partners to take this new offer to market.

EVERY SINGLE TECH COMPANY I’ve talked with over the past 4 months is re-vamping their service offerings and expanding their service portfolio. Torsten is a Services Marketing wizard and will have “pearls” to share with you.

Value-Added Services – Is the Juice Worth the Squeeze?

Phil Nanus of Symantec will tell his story about the creation of a new portfolio of value-added services that has grown INCREMENTAL service revenue by $130m, while also bringing Symantec closer to their customers.

Symantec was TSIA’s Value-added Services Star Award winner in 2011 and when you hear Phil’s story, you’ll know why. This will be a “how to” session focused on topics including service product management, sales compensation, sales coverage, and much more.

You want to grow your service revenues? Value-added services are a hot ticket.

You certainly won’t want to miss the TSIA conference in May. I personally invite you to join us and be part of this dynamic community of service sales and marketing leaders.

Check out some of our Founding Members who are on our Service Revenue Generation Advisory Board.

Well, the jury’s out. I heard disparate answers to that question this week at TSW in Las Vegas. Some companies have waived the white flag and have given up …”it’s just too difficult and they don’t get it”. They have hired their own Services Sales Reps and are very happy with the results. Others have chosen to persevere and the effort is much like training for a marathon … it’s no small feat.

Here are three best practices from Sophia Williams, Vice President of Global Services Sales for NCR:

1. Train the Product Sales Reps relentlessly on understanding and communicating the value proposition of services to customers
2. Get the right balance of sales incentives in their comp structure for both products and services
3. Incorporate the sale of services into the Product Sales Reps’ performance management criteria

Some specific sales comp practices that were mentioned during this session, which was moderated by Charlie Hohenshelt, PrTM/PWC and Bill Croft of GE Healthcare Systems, were:

• Pay different rates for products vs services
• Create a separate component of the comp plan just for services — one example was 70% for product and 30% for services. 20% wasn’t enough to affect their behavior and >30% impacted product sales negatively.

So what’s been your experience? Have you thrown in the towel or are you running the marathon?

Welcome to my new blog, Up and To The Right … Driving Growth in Your Service Business.

There aren’t many industries that have the growth opportunities like we have in front of us. With the transformation occurring in the technology industry, this is a very exciting time to be a Services Sales or Services Marketing leader.

You’ll find the tone of this blog to be all about you …  encouraging you and empowering you to drive your company’s service revenue growth. You’ll read about where the service industry is heading, thought-provoking ideas for charting your course, and best practices that are delivering superior results. We’ll also discuss the investments required so you can build an effective business case for more funding within your company.

JB Wood, Todd Hewlin, and Thomas Lah keynoted on Monday at TSW Las Vegas and they knocked it out of the park. Attendees commented in the hallways and in sessions how compelling their points of view are. Their new book, Consumption Economics, was the centerpiece of their keynotes and it is PACKED full of strategic vision and practical advise for steering the services strategy for technology companies. It’s a must read. Every conference attendee received a copy of the book and Amazon.com is also taking pre-orders. Conference attendees commented how effective it was to have the book as a theme for the conference and how well all the sessions dovetailed into the principles of the book.

Here are some thoughts I had after reading Consumption Economics. I believe you will be compelled to take swift action to not only optimize your current services revenue, but also build new revenue streams to secure your company’s future financial strength. A key premise of Consumption Economics is that there was a collision of three factors that is accelerating the shift to services as the primary revenue stream for most technology companies.

The Vortex Created by the Big three

1. The global economy tanked. Companies went into survival mode. With topline revenue being unpredictable, companies cut costs until it hurt, and then cut some more.  In 2008 and 2009, each year was a “dog year.”
2. Cloud computing got hot. Many on-premise software companies have been in denial about the advantages of cloud computing. But it’s difficult to deny just how powerful the value proposition is and how strong the customer adoption is when salesforce.com has dominated the CRM market and NetSuite recently announced it grew revenue 20% year-over-year, while most ERP companies are struggling to grow 10%.  The cloud is real, Baby.
3. The iPhone came out. Corporate IT departments have held tremendous power in deciding the IT environment end users will have access to. Apple created a new set of expectations and a powershift to the end user.

JB, Todd and Thomas also point out a number of challenges and opportunities that companies need to embrace. Two of my favorites were:

1. Learn to love micro-transactions.
2. Broaden your role to be a service leader who optimizes consumption.

Download my full article on TSIA.com’s website to read the details about how a company provided product for free in order to get volumes of micro-transactions and made three times more money doing this. And also how Intuit’s Website Division has nailed it with upselling contextual offers while delivering excellent customer service.

The future of the service industry will require new types of leaders. Time is of the essence. The sooner you get started and get your company on the optimal service revenue growth track, the sooner your company and your career will overcome the vortex. Being an early mover is more important than ever.