If you want to raise hell in an online forum of Customer Success professionals, just ask them who should own customer renewals and account expansion.
You’re going to find two schools of thought. One says Sales should tackle the job of closing all deals with new and existing customers. Selling, after all, is what they do.
The other take is that CSMs have the closest relationship with customers. They should leverage that relationship to close expansion deals.
Who's correct? We weighed the most common arguments for each side and came to a clear conclusion.
Spoiler alert: Sales should own account expansions and renewals
Here’s the logic of having CS handle the renewals and expansions: Sales needs to focus on selling new deals, and CSMs already have standing relationships with their customers. That makes it seem like CSMs are better suited to own renewal and expansion sales. On closer inspection, that reasoning doesn’t pan out. Let's break it down and see why.
No one knows a customer better than their CSM. They’ve been together since day one. In fact, the CSM wrote the success plan—the literal book on how a customer will get value from your product. That means no one is more qualified than a CSM to frame upsells around the value a customer will get from it.
So Customer Success should own expansion sales, right? Before you emphatically answer yes, consider this: is risking that relationship worth it?
The strength of the CSM/customer relationship is built on open communication. Customers need that one person in your company they can speak freely to. Not just as a subject-matter expert, but as an adviser, an advocate, and even a friend. Those uncensored conversations are candid peeks behind the curtain of your customer’s operation. They net insights that guide everything from new product development to marketing strategies.
Inject awkward price negotiations into those conversations and the whole thing falls apart. Customers go into negotiation defense mode, wondering whether their CSM is gathering info just to sell them the next thing. Or even worse, the customer goes silent, avoiding their CSM altogether.
Even in a world of tech touch and asynchronous communication, trust remains one of the most important factors in the buying decision. According to an Edelman study, 81% of people surveyed said brand trust is a major consideration in who they purchase from.
With Vitally's powerful playbooks, you can give your CSMs more time to focus on building relationships that count. All without losing that oh-so-important personal touch.
If trust is so important in making a decision, the thinking goes, why not leverage the customer trust your CSM has developed to close more sales?
It’s true: trust is helpful for closing sales. But trust is like a bank account. Your CSM has been earning small deposits from their customer for months. A single negotiation conversation can empty that account in an instant. Once trust is gone, it’s gone for a very long time. Let Sales be the negotiator so CSMs can protect the trust they’ve worked hard to develop.
People hate explaining themselves over and over again to different people in an organization. There’s a natural hesitation to have a salesperson jump back into the customer relationship at renewal time.
If your Sales and Customer Success teams are aligned well and speaking the same language, this issue automatically disappears. The CSM should be supporting the AE, making sure they have all the insight needed to present the deal in a way that shows value to this specific customer. Then, the customer will never feel like they’re speaking to two different organizations.
Hunting for new logos is much more difficult than selling to an existing customer that’s already a warm lead. The fear here is that AEs will take the path of least resistance and your growth will stagnate.
There’s an easy fix for this as well. If Sales starts spending too much time on resells and upsells, a change in their comp plan can balance their focus. Alternatively, you could assign one AE to renewal and expansion deals. Either way, you don’t have to sacrifice selling new deals just because your Sales team owns upsells and renewals.
Renewals and account expansion sales are important to the health of your SaaS business. Put those deals in the hands of the people with the best chance to close them: your sales team.
CSMs are customer-centric. That is, CSMs are hired and trained for their ability to help customers be successful with a product. As an advocate and adviser, CSMs need to stay in the mind-set of the people they work with.
Sales, on the other hand, is company-centric. Even if an AE considers themselves more of a guide than a salesperson, they’re still sitting on the company’s side of the table come negotiation time. Asking a CSM to take on this role is a huge shift from their primary focus.
Selling requires a different set of skills and personality than Customer Success. A great AE knows how to negotiate, isn’t afraid to handle objections (read: doesn’t take the first no as the final answer), and has the fortitude to follow up with dogged persistence. When Sales is selling renewals and expansion deals, you have your “A” closing team on the job.
People go into sales because they like selling. Their personalities leave them yearning for the close of their next big deal, and their training strengthens those innate abilities. Upsells and renewals are as important. Let the closers close them.
In SaaS, it takes months or years to realize profit from a new customer. So it’s not enough to get a customer to sign up; they have to find enough value in the product to stick around.
When Sales owns renewals and upsells, they have a stake in the long-term success of a customer. AEs will scrutinize their ideal customer profile by how successful the customer can be with the product, not just whether the deal can close. Those good-fit customers will stick around longer and require fewer CS resources to make them successful. That’s a huge win-win for both your company and your customers.
Protect the CSM/customer relationship first and foremost. Why? Because as far as your customers are concerned, the CSM is your company. Once faith in the one person responsible for guiding the customer to success is lost, it doesn’t really matter who owns expansion and renewal deals. Without trust, customers won’t decide to purchase from anyone in your company. Let sales do what they’re trained to do, and let CSMs remain the trusted adviser they need to be.
That doesn’t mean Customer Success isn’t playing a role in those deals, though. CSMs should be in the ear of the AE, helping them position upsells so they fit perfectly into the customer’s business goals and notifying the AE when a customer is at risk. That way, no one has an ill-fated renewal call with a less-than-happy customer.
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