The Toronto Customer Success Executive Breakfast is a forum whereby local industry leaders get together over breakfast to discuss the still young and rapidly evolving field of Customer Success.
Organized by DesiredPath, senior executives in the field of Customer Success are invited to share their knowledge and expertise amongst their peer group in an intimate and highly interactive setting.
The breakfast is an opportunity for these leaders in Customer Success to convene, exchange ideas and further define industry best practices.
Vanessa Brangwyn, Chief Customer Officer at Achievers, was this month’s key speaker at the Customer Success Executive breakfast.
Hosted at Achievers’ head office, Vanessa led the group through the topic of “Who Owns the Customer?” exploring the evolution of Customer Success at Achievers, the partnership with Sales and ultimately how it all fits together to deliver customer value.
A topic very near and dear to the hearts of Customer Success executives, Vanessa led the group through a very engaging conversation!
Vanessa started by highlighting that it is important for companies to first know who their customers are before accountability for them can be defined.
At Achievers, they think of every single person at the customer’s company and factor that in to all of their transactions with them.
Accountability for the customer therefore means ensuring that they are addressing the needs of all the various stakeholders.
Previously, Customer Success was part of the sales team.
The structure was cohesive for customer coverage however the challenge was that the organization focused more on new acquisition so it was hard to get the voice of the customer heard “at the table”.
Everyone was talking about growth but not about retention.
This led to the “leaky bucket” problem where customer retention was becoming more of an issue as they continued to grow.
In 2018 they started to talk about retention as key for growth and created the new Chief Customer Officer role, moved Customer Success out of the sales organization and augmented the department to better support the needs of all customer end-users.
In this new model, Customer Success Managers (CSMs) own and are compensated on renewal, with accelerators if they overachieve on contract.
Upselling and Cross Selling
Upselling and cross selling is a bit trickier.
What is an upsell vs cross sell?
And then when should an Account Executive (AE) be brought in to manage either?
They are trying to be clear about organic vs inorganic customer growth and assign accountability accordingly.
Organic growth occurs naturally as a result of the CSM effort in having customers do more with the product and hence CSMs own, and are compensated for this, with a commission plan that reflects the account farming effort.
Inorganic customer growth occurs either when dealing with new departments or regions at the customer, or when there are new products to sell.
In this case, the AEs do the cross selling and upselling and own the revenue growth number.
Vanessa asked the group who owns the customer at their respective companies and how is the corresponding compensation plan modelled?
A Growth Strategy Framework to Increase Customer Retention and Revenue Growth
A number of executives had similar structures at their companies where AEs report into the Sales organization and CSMs are trained to “hear for” opportunities.
In this case, Customer Success is generally responsible for customer health and the customer retention rate with bonuses for various additional elements including accelerators for growth.
AEs are then typically responsible for upselling and cross selling whenever new relationships or budgets are involved.
New metrics such as CSSQL’s or SQO’s were mentioned as ways to quantify Customer Success as a revenue lead source.
The problem with this arises when Sales simply views Customer Success as a revenue stream.
There is a trend occurring where companies are having trouble growing new logos and therefore looking increasingly at the customer base for revenue growth.
But this pressure is also making it harder to sell into the customer base.
Ultimately a vendor cannot sell to customers if they are not seeing value, therefore the balance between customer success and revenue growth must be considered carefully.
A growth strategy framework that is proving successful at increasing both the customer retention rate and revenue growth rate is a double compensation model for upselling during the first 12 months.
Although Chief Revenue Officers (CROs) are loathed to double compensate on deals, this model does well at balancing both the needs and timing of the customer, with Sales’ drive to sell to the install base.
Members of the group did however favour the responsibility of customer expansion residing within Customer Success to ensure that both the CS organization and by extension, the Customer, have a “seat at the table”.
Bottom Line: Revenue Growth Requires Customer’s Seeing Value
What did the group conclude then?
Many elements need to be considered when determining how best to resource accounts and grow revenue.
There is no one-size-fits-all approach, but everyone agreed that no one can sell to an install base if customers are not seeing value!
If you are responsible for the Customer Success strategy at your company and are interested in joining the group, please contact me at email@example.com.