The Gift That Keeps on Giving: 20 Tips for Software Licensing Renewal Success [Part 3 of 4]

4 factor box
In my first blog in this series I covered two factors that affect renewals: product- and purchase-related factors. In my second post I covered some upgrade-related factors as they relate to software licensing renewals processes and how you can drive more revenue from higher software licensing renewal rates. We’ll continue below with additional upgrade-related factors.

Tips 1-6, Tips 7-11

Tip #12: Make getting your software update easy

It amazes me that in 2015 I still hear producers who ship out upgrade CDs to their customers. My favorite story about physical software upgrades came from Livermore Lab which complained because they had received 10 pallets of boxes for a particular OS upgrade. Physical distribution of an upgrade is a guarantee that some customer will not receive it because they’ve moved or it was received by someone who only upgraded one box and forgot to give to the rest of the department or receiving didn’t recognize the name and threw it away or…

It’s simple – upgrades must be available electronically – including firmware upgrades. Tesla has made a name for itself by providing electronic software upgrades to their cars – all producers should do the same.

Tip #13: Make your entitlement management system intelligent about upgrades

In your entitlement management system, upgrades should be managed. For end users/enterprises this means:

  • Entitlements should be flagged as “upgrade available”
  • When customers activate an older version of the product, let them know that a newer version is available
  • Give customers tools to find all users who are running older versions

For your channel, this means:

  • Receiving weekly reports with all customers on older versions so that they can proactively reach-out and offer training and/or installation help
  • Being able to generate upgrade software licenses on their behalf

When your product managers are using your entitlement management system, give them the ability to view “upgrade adoption rates.”

Tip #14: Involve your channel partners in the upgrade but don’t make them the ONLY conduit

Traditional reseller channel partners make little money from software upgrades. They might be able to sell some additional/beefier hardware or perhaps testing services or perhaps some training but they make far more money on new sales and therefore will spend their energy on that. Distributors will make no money on software upgrades and therefore have no incentive to be involved. From my experience, producers that rely entirely on channels for upgrades will find few customers on the latest version. Channel partners aren’t incented to prioritize this higher than their daily activities.

For software upgrades, I’ve always recommended that producers take the initiative of communicating availability and making it available. This shouldn’t be perceived as anti-channel – the company I mentioned in the first post (that grew from less than 40% to over 85%) sells almost entirely through channels.

However, I think it’s critical that channel partners be involved and be able to talk about the new capabilities that are available in the upgrades. In addition they should be able to go through the same experience of doing the upgrade (end-to-end) so that they can help customers that ask them about the process. This means:

  • Creating not-for-resale (NFR) entitlements with maintenance
  • Sending emails to these NFR contacts
  • Having them download software like any other customer
  • Experiencing the same entitlement management experience

In the example company I mentioned in the first blog in the series, we didn’t do this initially. Once we did it though the channel felt a lot more comfortable with the process and the experience.

Want More? Watch “Best Practices for Ensuring Success with Software License Renewal Processes

Continue readingPart 4 of this series.

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