Why Customer Success Should Own Revenue
Why Customer Success Should Own Revenue
Anyone who has spent time working in a Customer Success organization can attest to the fact that Customer Success can be defined in many ways, resulting in different responsibilities and metrics. The role may or may not include things such as: onboarding, training, customer relationship development, account strategy and mapping, business reviews, cadence calls and renewals.
Oftentimes, I hear about Customer Success organizations that focus so much on customer advocacy and training that they shy away from any revenue related metrics. This is a mistake and does a disservice to your CS team.
Objections to be handled
Some reasons I’ve heard that a Customer Success team does not align to revenue:
1) Being a customer advocate while also negotiating with the same customer impacts the relationship
I agree that this could be a fair point if your target market is small companies where your one contact runs both aspects. (I would then argue that, in supporting smaller companies, you need to drive towards efficiency – either by having CSMs take on more responsibilities or enabling ‘tech touch’ for auto-completing renewals, which CSMs can help process). As a company enters into the mid market and enterprise space there is often a separation between technical user and procurement.
2) The Customer Success team has enough to do without taking on revenue as a focus and/or Revenue is a ‘sales thing’, not a CS thing
More on this later, but one question to ponder – why are you doing all of these “other activities”? (Hint: Your answer should be to retain and grow your customer)
3) The CS team isn’t made up of hunters – we doesn’t have the right skill set
Sales is certainly not for the faint of heart and for those who haven’t done sales in the past, owning a revenue quota can seem scary. Aligning to revenue does not mean you need to change your entire customer approach, push items your customer doesn’t need, or run into the end of the month crunch. Revenue is a component of the customer’s ongoing relationship with your organization. While you may need to offer some additional training to the team, this is not as big of a stretch as you may imagine.
The Reasons Why
As you can begin to tell from my notes above, there are many reasons your team should own a revenue number:
1) Headcount discussions get much easier.
When you can’t demonstrate tangible value to your internal organization, asking for additional headcount is based off of qualitative ‘customer would be happier’ statements rather than being able to point to quantifiable statistics. (How powerful is this? “Once we add this resource to an account, we’ve seen a 10% growth rate above our company’s typical growth”.) If you can show sustainable growth that covers the cost of your CSM resource, the headcount becomes approved much more easily.
2) You are already doing the hard part.
Becoming integrated into your customer’s business is not easy – you need to understand the use case, how your offering provides value, multiple contacts, and how your company aligns with the customer’s long term goals. As the CSM is instrumental in holding these conversations (and documenting the information), he or she is in the position to provide trusted advice and guidance to allow your customers to best utilize your products.
3) Owning a number gives you a seat at the table.
Sales has always had the ear of the CEO given their alignment to company growth. By positioning the CS organization as a growth engine for the company, you gain internal credibility for support on both Success and Customer Experience initiatives as well as the ability to help drive the voice of the customer internally.
If you are not owning revenue today, the transition may seem intimidating. In order to take on (full or partial) responsibility for revenue, you may not need to change your approach in activities or ownership level. As mentioned above, many of the activities a CSM typically does help drive revenue. This change may simply be better aligning the value the CSM provides to a tangible outcome.
The Road Ahead
If you are not aligned with revenue today, here are a few steps you can take:
- Start measuring the revenue growth on the accounts you manage today. You may want to work with your sales operations or finance team to understand the company’s growth projections, churn anticipation, and the growth seen on accounts the CSMs manage.
- Continue to track these metrics on a monthly basis.
- Work with your team to start considering additional opportunities to drive value with customers (ie: uncovering new use cases, getting introductions to other business units)
- Ask for a quota as you plan next year’s quota structure!
Director: Account Management; Fastly
With extensive experience in direct sales and sales enablement, Emily Garza brings a holistic view of the customer journey to Customer Success. Emily has built and reshaped multiple functions, allowing her to offer a practitioner’s view on creating an impactful and scalable organization.