Selling Service Contract Renewals - Cisco
Services GuideSelling ServiceContract RenewalsAccelerating Partner Success with Cisco Technical Services
Services GuideSelling Service Contract RenewalsContentsManaging Your Customer Base with Service Renewals3Selling Services: Using Solutions Selling to Capture Renewals3Securing Renewals: Increasing Your Sales Opportunity4Best Practices for Selling Service Contract Renewals6Handling Objections7Portfolio of Cisco Technical Services9More Information9Appendix: Cisco Technical Services Portfolio Features Comparison10
Services GuideRenewing Cisco TechnicalServices contracts can help you: Enhance cash flow and margins Penetrate new markets Improve your competitiveadvantage Increase customer retention Increase customer satisfaction Expand your relationship withyour customerManaging Your Customer Basewith Service RenewalsThe information in this guide can help Cisco channel partners boost revenues,increase margins and build long-term customer loyalty by renewing TechnicalServices contracts with customers.This services guide focuses on increasing your sales effectiveness by helpingyou better capture opportunities to sell service renewal contracts. It also coversobjection handling tailored to the specific requirements of customers withinsmall to medium-sized businesses and provides information about the portfolioof Cisco Services.Selling Services: Using Solutions Sellingto Capture RenewalsSelling Cisco Services contract renewals is a process that requires organisationand planning, but can provide great rewards. Selling renewals provides you withthe potential to capitalise upon the investment you made at the first sale of service.And, if you have planned and implemented your approach, you may secure at leastanother year’s revenue for a far smaller outlay of time and effort than you madeduring the first sale.Selling service renewals creates opportunities to upgrade or extendservice coverage or expand the overall solution by selling new hardware,software, or financing.The solutions selling approach is important when pursuing renewals. This is youropportunity to revisit you customer’s business needs and requirements – todiscover new directions and plans or validate existing ones. Few company plansremain the same for a long time. With each company’s changing needs come newopportunities to upgrade or extend service coverage, or expand the overall solutionby selling new hardware, software, service or financing. In other words, contractrenewal time gives you the chance to build your business base and increase yourrevenue stream, while developing your role as a strategic part of your customer’steam. To do this, you and your customers need to have a shared understanding ofthe value received from Cisco Technical Services and fully explore issues, concernsand objections that might affect the decision to renew. (See Figure 1.)Figure 1. Solutions Selling Ask Questions to Discover the Right Approach to the Renewals Process3
Services GuideSecuring Renewals – Increasing YourSales OpportunitySecuring the renewal of a service contract and increasing your sales opportunityis dependent upon a number of critical factors: Starting early – 90 to 120 days in advance Understanding the customer’s business needs Exploring opportunities to sell additional services Proposing a solution to meet customer requirementsA key tool to help you is the Cisco Service Contract Centre Website (SCC).To access the tool, go to www.cisco.com/go/sccStarting Early – 90 to 120 Days in AdvanceThe most important aspect of successfully managing the renewals process isstarting early – at least 90 to 120 days before service contracts are due to expire.Contact your customer to let them know they have a renewal coming up and thenschedule time with them to conduct a business review. The business review isessential to understanding the customer’s business needs and proposinga valid solution.Customers with a variety of equipment and different types of service contractswill require more complex negotiations to secure renewals. They also representgreater opportunities for upgrades, extensions and new sales. For these customers,the objective is to secure a face-to-face meeting well before the expiration date.Scheduling this meeting well in advance enables you to have adequate time todiscuss all the issues and propose a valid solution prior to the expiration of theservice contract.For customers with very few devices, the renewals sales process willtypically revolve around e-mail and telephone contact rather than costlyface-to-face meetings.4
Services GuideUnderstanding the Customer’s Business NeedsThe renewals process is an important opportunity to re-engage with your customer.It is an excellent time to revalidate your customer’s business challenges, networkingrequirements and service coverage models. Use the renewals process to learneverything you can about their business and how it has changed since you firstsecured them as a customer. Better understanding your customer’s situation willhelp you to retain them as a customer. It will also increase the value you provide themthrough Cisco solutions. (See Figure 2.)Figure 2. What Customers NeedExploring Opportunities to Sell Additional ServicesYour discussions with your customers should fully explore whether this is strictlya renewal, or an opportunity to sell additional services. Discuss the changes thathave taken place in your customer’s business that might affect the way they areusing the technology. If they have taken on more staff, you can make a case forincreased demand on switches and routers, meaning the existing service level maynot be enough. If they have Cisco SMARTnet Next Business Day coverage, forexample, the customer might be better off moving to a contract providing four-houror even a two-hour replacement. If they have added additional, or replaced existingequipment, they may need additional coverage. Look for equipment that does notcurrently have a service contract to include in the renewal proposal.Proposing a Solution to Meet Customer RequirementsOnce you have a thorough understanding of your customer’s business issues,you will be in the best position to propose a complete solution that helps themachieve their business objectives. Your proposal will no doubt include the renewalof any existing service agreements, but the exploration of your customer’s evolvingsituation may also lead you to propose new hardware and software and new serviceagreements for any uncovered equipment you have discovered, as well as financing.5
Services GuideBest Practices for Selling ServiceContract RenewalsUse a Solutions Selling ApproachEntering into the service agreement renewals process is an important time tocontinue using a solutions selling approach. This is an opportunity to continueexploring your customer’s questions about cost of ownership, the effect ofunexpected downtime, their need to show a return on technology investments andwhat a reliable network solution means to the long-term success of their business.Increased Revenue Streams Through CoterminationThis is an excellent strategy for optimising your revenue streams and reducing youradministrative burden. Where customers have purchased different service contractsat different times, you may find yourself contacting them repeatedly with the samemessages relating to different pieces of equipment, which is a nuisance for youand for them. Cotermination means arranging for all service contracts to be renewedat the same time. Use the Cisco Service Contract Centre Website (SCC) atwww.cisco.com/go/scc as a tool to help you.The advantages of multiyearcontracts include: Discount incentives forcustomers Lower sales administration costs Higher renewal rates, strongergross margins Improved cash flow for you andyour customerSell Multiyear OptionsMultiyear contracts (typically three years) give customers the opportunity to takeadvantage of discount incentives, lock in prices, match service contract to leaseterms and with financing, improve cash flow. Selling multiyear agreements can alsolower your sales administration costs, boost your renewal rates and increase grossmargins and cash flow, with other associated benefits for your return on investment(ROI). In particular, if you sell at the point of first sale, you can secure the budget forthe longer-term contract, instead of having to resell it every year. You can make astrong case for multiyear options, because they also remove administrative andmanagement burdens for the customer.Sell Financing SolutionsOffering your customer a financing solution that spreads their capital outlay over a numberof years can help enable the customer to accelerate or increase the deployment ofstate-of-the-art network solutions. Financing is one of the most important tools you have tomanage a customer’s budget concerns and promote multiyear contracts.Cisco Capital Easy Lease financing solutions provide straightforward, flexiblefinancing options, competitive rates and fast credit processing. This can help yourcustomers acquire the solutions they need to be successful.Find out more at www.cisco.com/asiapac/easylease6
Services GuideHandling ObjectionsAs you implement your Cisco Service Contract Renewals strategy you mightencounter some objections. The information below can help you counter thoseobjections.ObjectionI know the technology now.Why should I pay for another year?My team can look after it.ResponsePoint out the value they have already received in terms of support, upgrades,updates, replacement parts and tools and resources. Meeting industry needs,Cisco continuously evolves and develops its products. With service protection, yourcustomers have taken full advantage of the Cisco investment in innovation and kepttheir network infrastructure up to speed with leading networking technology.Discuss the need and benefits of being able to update Cisco OS software. Ask howthe customer plans on handling Cisco OS software updates. Remind the customerthat Cisco OS software updates are available only on products with service contracts.Ask the customer if servicing equipment is really the best use of its in-house team.Emphasise that the best solution is to have coverage to help technicians when theyneed it and free their team to focus on work related to the customer’s core business.Also discuss the expertise of the in-house staff. Does IT have the necessaryknowledge and experience, especially on new technologies?Ask the customer questions that focus on the types of information they usuallyneed about Cisco products, the easy access they currently have to this informationand how much time they would spend looking for it without service coverage.Show them that they have saved time and money by using the Cisco.com websiteto get quick access to a wealth of information on Cisco products and solutions. Itmay be helpful to sit down with your customer and together re-visit some of theinternal Cisco product sites available within Cisco.com, such as the Cisco Products,Technology and Solutions pages.If you are positioning Cisco SMB Support Assistant as the best option for yourcustomer, tell them about or show them the Cisco SMB Support Assistant Portal.Emphasise how use of this portal will help your customer to effectively managecontracts and devices, as well as implement basic network configuration scenariosand help resolve common troubleshooting issues. Visit the portal athttp://tools.cisco.com/Support/SMBSA/Login.do7
Services GuideObjectionI do not need updates forCisco OS software (for renewals ofCisco SMARTnet).ObjectionWhy do I need to renew my servicecontract? I have not used it this year.ResponseRemind them that their business is constantly changing and new applications are beingreleased frequently. Abandoning software support may result in new applications notworking to their full potential, thereby decreasing the value of these applications. Reinforcethat new versions of Cisco OS software will add new functionality to their equipment andwill help to boost their return on investment and lengthen the life of their equipment.ResponsePoint out that your customer has received updates of Cisco operating systemsoftware (and application software, if this is relevant), which have kept their Ciscosolution current and operating at a high level. Most customers do not realise just howmuch they have benefited from Cisco OS downloads.Point out that service contracts: Supply rapid response to problems that can affect network availability Provide investment protection Avoid high transactional fees and long waits for delivery of parts Provide current softwareFinally, point out to your customer that once their current service contract expires,a Cisco engineer will have to inspect the equipment before any future servicecontract can be purchased. There is usually a charge for the inspection, which yourcustomer can avoid if they renew service before the current contract expires.ObjectionI need service, but Cisco SMARTnetis too expensive and providesmore than I need.ObjectionI do not want an on-site contractfor parts replacement any morebecause it is more expensive(for Cisco SMARTnet Onsite renewals).ObjectionI didn’t budget for it.ObjectionI have not used phone support(for Cisco SMARTnet).8ResponseIf your customer does not want to renew Cisco SMARTnet and meets the criteria forSMB Support Assistant, consider offering SMB Support Assistant. Revalidate thebusiness need for the device and the associated decision to use service previously.Lead with the message that Cisco SMB support assistant is a service programdesigned to meet the needs of small to medium- size businesses.ResponseAsk your customer what would happen if they were to experience a criticalnetwork problem after business hours or on the weekend. Point out that with CiscoSMARTnet Onsite support, they have access to fast responding onsite help, evenafter hours. Ask if they are comfortable with the risk of having their network down,without access to assistance, over a weekend, or even for several days, until theycan get a resource to the location to help them. This point is particularly compellingfor customers in remote locations.ResponseHandling this objection involves identifying cost savings, price protection and mostimportantly, financing opportunities. Emphasise that while a customer might nothave budgeted for a prepaid multiyear contract, making monthly payments to Ciscoby financing the contract, while incurring some financing charges, can make therenewal viable. Partners can also work with Cisco Capital Easy Lease to buy downthe rate by using their multiyear prepaid discount.ResponseThis objection indicates that the customer has not taken full advantage of their servicecoverage, or has not monitored their use of it. Point out that with service coverage,your customers have access to a team of Cisco or partner experts who have theknowledge to resolve any problems and get their network back up as quickly aspossible through the Technical Assistance Centre (TAC). Compare the time it wouldtake the Cisco TAC to resolve a problem with the time the customer might spendtrying to resolve the problem on their own. Remind them also that they might have tocall the TAC anyway if they cannot resolve the problem themselves, incurring time andmaterials charges. Conclude by adding up all of these potential costs and risks andcompare them to the annual flat fee they have been paying for phone support.
Services GuideObjectionI don’t see the value of renewing a SASor SASU service contract to supportour network software applications.ResponseThis is a question of return on investment and total cost of ownership over time.Explain that the value of the applications in terms of their contribution to businesssuccess will diminish more quickly if they are not kept current. Point out the speedof software evolution, particularly in the area of security, as well as the fact that thewarranty may not cover upgrades to the software. Highlight some of the featuresthey have already taken advantage of during the current service cover period.Point out also that if they would like to upgrade their applications in the future but do not havevalid service coverage, the cost of purchasing these upgrades will be greater than the costof renewing their service contract. Remind them that future additions to their network maynot be compatible with their current applications, resulting in unexpected additional costs.ObjectionThere is no more budget for service.ResponseAsk your customer about the business reasons for the investment and show how includingservice can help to reduce total cost of ownership and build in investment protection.Position technical services as an essential extension of the technology investment.Mention that the cost of one service call can be as expensive as the contract itselfand that with the service contract, the customer receives a full range of benefits(Next Business Day Advance Hardware Replacement, etc). Discuss Cisco CapitalEasy Lease financing solutions with your customer.This is also another scenario in which Cisco SMB Support Assistant may beappropriate. Be careful to position it as an alternative to Cisco SMARTnet supportfor a small to medium-size business. Discuss the customer’s needs and show howCisco SMB Support Assistant addresses them.Portfolio of Cisco Technical ServicesCisco offers a portfolio of technical services to help meet the diverse needs ofcustomers. Many of the offerings are designed to provide service and support for allCisco products, while some are specialised by technology and others are meant tofurther enhance the operation of the overall network.Please see the Appendix section for a comparison table of the portfolio ofCisco Technical Services.Cisco Product-Specific Technical Services: Cisco SMARTnet services and SMARTnet Onsite Cisco SMB Support Assistant Cisco Software Application Support (SAS) andSoftware Application Support plus Upgrades (SASU)Cisco Technology-Specific Technical Services: Cisco Unified Communications Essential Operate ServicesCisco Services for Integrated Services Routers (ISRs)Cisco Services for Intrusion Prevention Systems (IPSs)Cisco Security IntelliShield Alert Manager ServiceMore InformationFor more information about selling service renewals and about selling servicesat the very first sales opportunity, refer to the series of sales tools at:www.cisco.com/go/ap/accelerateservicesOther Resources include:Cisco Technical Services: www.cisco.com/go/supportservicesCisco Capital Easy Lease: www.cisco.com/asiapac/easyleaseCisco Service Contract Centre Website: www.cisco.com/go/scc9
Services GuideCisco Technical Services Portfolio Features ComparisonCisco offers a portfolio of technical services to help meet the diverse needs of customers. Many of the offerings are designedto provide service and support for all Cisco products, while some are specialised by technology and others are meant to furtherenhance the operation of the overall network.Cisco Product-Specific Technical ServicesCisco SMB SupportAssistantOfferings and Main ComponentsSKU Samples**Cisco SoftwareApplication SupportServicesCisco Focused TechnicalSupportCustomers that need ongoingmaintenance and technicalsupport for both hardwarereplacement and Cisco OSsoftware maintenance or thatneed a specialised engineeronsite to replace a part (CiscoSMARTnet Onsite only)Specifically designed forsmall and medium-sizedbusinesses (SMBs), with250 employees or fewerwho require essential,easy-to-use and affordabletechnical support to allowfor operational reliabilityof networks running basicapplications on selectCisco productsCustomers that needto increase applicationavailability, functionality andreliability, with around-theclock access to technicalsupport, software updatesand, with SASU, majorupgradesCustomers that need toimprove operational efficiencyand shorten problemresolution time throughhigh-touch operationsmanagement, technicalsupport andengineering servicesSupports Cisco equipment*by individual product and isentitled by individual productserial numbersSupports select SMB classproducts. This service andsupport coverage is entitledby individual product serialnumbersAll Cisco software applicationsexcept voice products that areincluded in the Cisco UnifiedCommunications solution.SAS and SASU are purchasedby individual Cisco softwareapplicationSupports all Cisco equipmentSMARTnet is required beforeHigh-Touch OperationsManagement can be purchasedSMARTnet and High-TouchOperations are requiredbefore High-Touch TechnicalSupport is added.SMARTnet, High-TouchOperations and High-TouchTechnical Support arerequired before High-TouchEngineering is added.Two service offerings include:1. Cisco SMARTnet2. Cisco SMARTnet OnsiteIncludes the followingfeatures: Registered access to Cisco.com knowledge base Access to Cisco TechnicalAssistance Centre (TAC) Cisco OS software updates Advance hardwarereplacementCisco SMARTnet Onsite only Access to an onsite fieldengineer Network management andproductivity tools designedspecifically for SMBs that canbe downloaded to a laptop oraccessed through the Webbased portal 24-hour access to CiscoSMB TAC Cisco OS minor softwareupdates Next Business Day AdvancedHardware Replacementwhere available, otherwisesame-day shipTwo service offerings:1. Software ApplicationSupport (SAS)2. Software ApplicationSupport plus Upgrades(SASU)Includes the followingfeatures for SAS and SASU: Registered access toCisco.com knowledge base Access to Cisco TAC Application software updatesSASU only Major application upgrades High-touch operations:management with weeklyconference calls, quarterlydata analysis High-touch technical support:24-hour access to experttechnical support, specialphone number for reportingtechnical issues, technicalsupport engineering team,quarterly operationalcase-trending analysis High-touch engineering:network-level problemresolution during businesshours, problem -SAS-XXXCON-SAU-XXXCON-PSAU-XXXNetwork-based pricingCoverageFor WhomCisco SMARTnet andSMARTnet OnsiteCisco NetworkwideTechnical Services10
Services GuideCisco Technical Services Portfolio Features Comparison (continued)Cisco and its partners offer a variety of services to support customers in operating Cisco technologies.This table shows an overview of the Cisco technology-specific technical services.SKU Samples**Offerings and Main ComponentsCoverageFor WhomCisco Technology-Specific Technical ServicesUnified CommunicationsVoiceSecurityCisco UnifiedCommunications EssentialOperate ServicesCisco Services forIntegrated Routers (ISRs)Cisco Services for IntrusionPreventions Systems (IPSs)Cisco Security IntelliShieldAlert Manager ServiceCustomers with Cisco UnifiedCommunications that needongoing technical support forboth hardware replacementand software maintenanceCustomers that needmaintenance bundles forCisco integrated servicesrouters with voice applicationsthat combine hardwaresupport services such asCisco SMARTnet andSPBase with SoftwareApplication Support plusUpgrades (SASU) in asingle bundleCustomers that need CiscoIntrusion Prevention Systems(IPS) signature updatesand alerts about availabilityof signatures, OS softwareupdates, technical support,hardware replacement optionsand access to online securityknowledge baseCustomers that need acustomisable, Web-basedthreat and vulnerability alertservice that allows them toaccess timely and usefulinformation about potentialvulnerabilities in theirenvironmentSystem-level coverage onCisco Unified Communicationhardware and software:includes Cisco UnifiedCallManager, Cisco Unity Connection and Cisco Unitysoftware.Available for the Cisco 2800and 3800 Series with voiceapplicationsAll Cisco IPS ProductsAll Cisco equipmentAssisting availability, securityand operational efficiency of aCisco unified communicationsnetwork. Support and servicesinclude: System-level approach ontechnical and maintenancesupport Enhanced access to highlytrained professionals Advanced server hardwarereplacement Optional onsite technician forhardware replacement Application software updates Registered access to Cisco.com knowledge base All the components ofCisco SMARTnet All the components of SASUfor voice applications Alerts and e-mail messagesabout the latest signatures Access to network signaturefiles and signature file-basednetwork-layer protectionalgorithms Access to intrusionprevention operating systemsoftware maintenancereleases Registered access to Cisco.com knowledge base Access to Cisco TAC andto specialised securityengineers Advance hardwarereplacement Updates of threats andvulnerabilities that mayimpact network-enablingdevices, software, or ITinfrastructure Built-in tools to proactivelymanage intelligence withinorganisations Configurable portal withflexible service packages Detailed information;historical coverage ofapproximately 10,000 XFor more information about Cisco Services, visit: www.cisco.com/go/supportservices* SMARTnet is not available on Cisco equipment included in the Cisco Unified Communications solution because support is coveredby specific services created for that technology.** SKUs listed are samples only. Please refer to your theatre price list for a complete listing of available SKUs for each service offering.11
Services GuideCorporate HeadquartersCisco Systems, Inc.170 West Tasman DriveSan Jose, CA 95134-1706USAwww.cisco.comTel: 408 526-4000800 553-NETS (6387)Fax: 408 526-4100European HeadquartersCisco Systems International BVHaarlerbergparkHaarlerbergweg 13-191101 CH AmsterdamThe Netherlandswww-europe.cisco.comTel: 31 0 20 357 1000Fax: 31 0 20 357 1100Americas HeadquartersCisco Systems, Inc.170 West Tasman DriveSan Jose, CA 95134-1706USAwww.cisco.comTel: 408 526-7660Fax: 408 527-0883Asia Pacific HeadquartersCisco Systems, Inc.168 Robinson Road#28-01 Capital TowerSingapore 068912www.cisco.comTel: 65 6317 7777Fax: 65 6317 7799Cisco Systems has more than 200 offices in the following countries and regions. Addresses, phone numbers and fax numbers are listed on theCisco.com Web site at www.cisco.com/go/offices.Argentina Australia Austria Belgium Brazil Bulgaria Canada Chile China PRC Colombia Costa Rica Croatia Cyprus Czech RepublicDenmark Dubai, UAE Finland France Germany Greece Hong Kong SAR Hungary India Indonesia Ireland Israel ItalyJapan Korea Luxembourg Malaysia Mexico The Netherlands New Zealand Norway Peru Philippines Poland PortugalPuerto Rico Romania Russia Saudi Arabia Scotland Singapore Slovakia Slovenia South Africa Spain SwedenSwitzerland Taiwan Thailand Turkey Ukraine United Kingdom United States Venezuela Vietnam ZimbabweCopyright 2006 Cisco Systems, Inc. All rights reserved. CCSP, CCVP, the Cisco Square Bridge logo, Follow Me Browsing and StackWise are trademarks of Cisco Systems, Inc.; Changing the Way We Work, Live,Play and Learn and iQuick Study are service marks of Cisco Systems, Inc.; and Access Registrar, Aironet, ASIST, BPX, Catalyst, CCDA, CCDP, CCIE, CCIP, CCNA, CCNP, Cisco, the Cisco Certified InternetworkExpert logo, Cisco IOS, Cisco Press, Cisco Systems, Cisco Systems Capital, the Cisco Systems logo, Cisco Unity, Empowering the Internet Generation, Enterprise/Solver, EtherChannel, EtherFast, EtherSwitch, FastStep, FormShare, GigaDrive, GigaStack, HomeLink, Internet Quotient, IOS, IP/TV, iQ Expertise, the iQ logo, iQ Net Readiness Scorecard, LightStream, Linksys, MeetingPlace, MGX, the Networkers logo, NetworkingAcademy, Network Registrar, Packet, PIX, Post-Routing, Pre-Routing, ProConnect, RateMUX, ScriptShare, SlideCast, SMARTnet, StrataView Plus, TeleRouter, The Fastest Way to Increase Your Internet Quotient andTransPath are registered trademarks or trademarks of Cisco Systems, Inc. and/or its affiliates in the United States and certain other countries.All other trademarks mentioned in this document or Website are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company.(0502R) CableLabs is a registered trademark of Cable Television Laboratories, Inc.Renewals SG Aust. 1106. 10166-1206/Cisco
objection handling tailored to the specific requirements of customers within small to medium-sized businesses and provides information about the portfolio of Cisco Services. Selling Services: Using Solutions Selling to Capture Renewals Selling Cisco Services
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