Why Does Customer Success Fear Revenue?
Editor’s Note: This article first appeared on DesiredPath’s blog here.
The topic of Customer Success owing revenue is still one of the most hotly debated topics in the industry.
I have consistently found this curious.
While I see the rationale behind the arguments on both sides of the fence, it is the myopic viewpoints on the proposed solutions and how fervently they are argued that I find irrational.
To Own or Not to Own – That is the Question.
One camp states that Customer Success Managers (CSMs) should be trusted advisors to customers and that by owning revenue, it is not possible for Customer Success to impartially focus on product adoption and business outcomes.
Owning revenue is this case is a big no-no.
The argument is that benevolence, a requisite to make customers successful, is not possible while concurrently carrying a quota.
The other camp states that Customer Success is about customer retention and as such, it makes sense for the function to own revenue as part of driving customer adoption and business outcomes.
Doing so is not mutually exclusive and owning revenue is therefore supported.
The argument is that the purpose of Customer Success is to retain customers (i.e. revenue) and as such, CSMs of course need to be carrying a quota.
Trusted Advisor versus Customer Retention
As with anything in life, an ill-thought-out solution or one taken to extremes, usually does not work.
Focus on the trusted advisor approach without any consideration to revenue and I see companies typically over servicing and complicating the journey for their customers.
This approach leans towards a product-centric model with the Trusted Advisor CSMs eager to demonstrate a plethora of ways to use the solution within the business context, and Account Executives introduced into the mix come renewal time for a disjointed interaction within the customer’s journey.
Focus on the retention side without consideration to the customer’s adoption needs and business outcomes, and I see companies displaying the stereotypical worst traits of sales and customers with “shelf-ware.”
This approach leans towards a sales-centric model with the retention CSM motivated by quota and relying on a team of reactive subject matter experts and support specialists to “fix” accounts to get the renewal done.
The Triple Win Business Model
The answer is not simply where revenue resides within a company.
That “whack-a-mole” oversimplification of a business model ignores the multifaceted nature of the challenges that exist in creating successful customers.
(It is also naïve for any department within a for-profit company to think they can operate without contemplating revenue).
There is a whole range of pragmatic constraints that must be considered when structuring the right business model for a company, its employees and its customers.
The key is to solve those challenges holistically.
Hands down, by far the most effective way in addressing the various complexities is through a customer-centric model.
Aligning operations to efficiently drive successful, customer, product adoption and business value realization, aligns the company’s interests to those of its customers and employees.
Trust or revenue are then not mutually exclusive responsibilities for separate resources to bare, rather achieving both are built into the business model that sets up all roles to holistically and effectively drive successful outcomes producing the desired revenue.
The prerequisite for revenue retention and expansion is driving successful, customer, product adoption and business value realization.
Customer-centric business models do this by effectively aligning the operations and interests of the company with its customers and its employees.
Who owns revenue within the company is then a decision based on pragmatic factors that keep the integrity of the customer-centric alignment intact (which means that the roles that should own revenue are very capable in doing so).
As such, revenue ownership is a very viable option for Customer Success and not something to be feared but a result of a well thought out business model that generates successful customers.
UserIQ surveyed 400+ SaaS leaders and found that one of the greatest opportunities for companies today is a stronger alignment between their customer success and product management teams. Learn why here.
As healthy companies continue to grow it becomes harder to do so at the same rate through new logo acquisition. Companies spend an inordinate amount of effort on labor-intensive adoption and reactive, renewal processes with little or no regard to creating a disciplined expansion strategy. It’s time to change your strategy. It’s time for Customer Success 2.0.
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