CS - Revenue or Operations?

Jordan Silverman
Jordan Silverman Member, CS Leader Posts: 109 Expert
First Comment 5 Likes Photogenic First Anniversary
edited August 2023 in Strategy & Planning

I had an interesting conversation with my CEO last week and have been thinking about this a lot.

He asked me - long term do you see customer success living under Revenue or Operations?

CS for us is onboarding, training, CSMs, customer service, etc. all living under the CS umbrella. We own renewals, upsells, downgrades, and more!

My gut reaction and still how I feel is Revenue. Why? Because CS is a revenue generating piece of the business.

But would love other people's thoughts on this!

Jordan Silverman
jordan.silverman@usestarfish.com
(914) 844-5775
https://www.linkedin.com/in/jordansilverman/

Comments

  • Stewart Stokes
    Stewart Stokes Member Posts: 17 Thought Leader
    First Comment

    If CS fully owns renewals, upsells, and downgrades then I think it should be in revenue. Presumably the CRO has responsibility for those metrics and so it makes sense to me that you'd roll up to that person.

    If it's indirect where you influence it but don't own it, then I think you can go either direction depending on the specifics of your company. I'd ask myself a couple of questions:

    1) Does our team spend more time/add more value to revenue growth or day to day customer satisfaction?

    2) Would it be harder for us to live in revenue and stay aligned with operations or vice versa.

    I don't think there is a fully right or wrong answer. I've seen it done well both ways. It's contextual to the specifics of the situation.

  • Adrian Mendes
    Adrian Mendes Member Posts: 2 Navigator
    First Anniversary First Comment

    My organisation recently transitioned from having CS be a part of operations to recognising it as a revenue stream. The change was welcomed because CSM's could identify and close major revenue opportunities last year without letting that impact their day to day interactions and experience management.

    In my opinion if the success depends on a high touch engagement model and the rep is constantly chasing timeline and updates it probably is an operational stream.

  • caseybaldin
    caseybaldin Member Posts: 3 Navigator
    Name Dropper Photogenic First Comment

    If the CS is part of revenue do your CSMs make commission or anything for those upsell/cross-sell opportunities? I'm figuring this out at my own company when Sales hand off new clients to CS. How long does Sales "own" a contact/account and once owned by CS should we implement a commission or part of bonus attainment? CS will be responsible for renewals.

    I'm curious how other companies do this. I came from a space where CS didn't receive anything for upsell/cross-sell opps and Account Managers were responsible for closing.

  • mccauley.dd
    mccauley.dd Member Posts: 2 Navigator
    Photogenic First Comment

    It seems historically it lived under Ops to drive value, but as time has grown it has grown to be retention tied to expansion and trends are showing those should be tied back to revenue/commercial side.

    I’ve seen where CX evolved to CS due to the importance of expansion revenue and we have tied back variable comp into the equation for those now CS folks. Even if it’s a lead gen responsibility, the comp helps reduce the effort, time and increase close rates for partnered sales teams.

  • Ian Remington
    Ian Remington Member Posts: 6 Navigator
    First Anniversary Name Dropper First Comment

    Hey @Jordan Silverman - The timing of this post has me excited as we're in the exact sort of tweening phase here. Our current SVP of Ops is departing, giving us a moment to reflect where the puzzle pieces should fit. Previously, prior to her departure, we were split to: Support, Finance/HR, Professional Services (including implementation) & Support all living in Ops. Revenue consisted of Marketing, Sales, and Customer Success. Ultimately, I see a more natural reorg that has a soft split in Revenue consisting of: Professional Services, Support and Customer Success.

    I would love to connect with you more on this to see where you're at and hopefully learn from you.

  • Allison Bantz
    Allison Bantz Member Posts: 6 Seeker
    Name Dropper First Comment First Anniversary

    @Ian Remington @Jordan Silverman Hi both! I was thrilled to see this post and would be eager to connect on this topic with you both. I am eager to get your insights into the structure, incentives, and roles across the customer lifecycle. We, too, have an opportunity to redefine and I have some experiences in both areas to share. Would you both be interested in a conversation this week? Feel free to email me direct abantz@shutterstock.com.

  • Allison Bantz
    Allison Bantz Member Posts: 6 Seeker
    Name Dropper First Comment First Anniversary

    @caseybaldin We have a commission structure for our CSMs. I see pros and cons here, given the books of business between our CSMs and RMs are not 100% overlapping yet dependent on collaboration to drive retention and growth. We also do not have pure Account Managers in our model and CS acts as full lifecycle post-sales for our most strategic customer base. We are quota and target driven today at an individual level. Happy to connect further if of interest.

  • Jordan Silverman
    Jordan Silverman Member, CS Leader Posts: 109 Expert
    First Comment 5 Likes Photogenic First Anniversary

    @Allison Bantz I have a call with @Ian Remington today! Just added you to the invite :) hopefully that time works!

    Jordan Silverman
    jordan.silverman@usestarfish.com
    (914) 844-5775
    https://www.linkedin.com/in/jordansilverman/