TLC - Sales or Revenue Driver - the same thing?

Rod Cherkas

CS teams are being asked to play a bigger role in generating expansion revenue, but what does that mean?

Do your CSMs have to become sales people? I don’t think so. Instead, I believe that your team can instead lay a foundation that supports the growth of your customers while delivering your experiences in a cost-efficient way.

What are some examples where customers expanded their revenue with you and where your work with them made that expansion possible? You are probably proud of those results. (You can exclude your customer’s name if that is a privacy issue).  

As an added incentive, I will send a free signed copy of REACH to the first 10 people who share an expansion story they have experienced.

*Be sure to read the blog that expands into HOW CS leaders can reframe their thinking here.

Brian Aherne

Hi Rod,
For my team we see ourselves as part of the revenue cycle. We help the sales team close more advance deals and are a key part of the business case creation. QBRs then become a way to share recurring impact with the customer and build engagement. We use these meetings to map out the customers organisation, identifying potential use cases and stakeholders. These CS qualified leads have a very high success rate but the commercial discussions stay with the sales team. We also provide the the marketing team with testimonials and really successful use cases, these helps them maximise their marketing spend to deliver authentic content to prospects who have a need.

An example recently was where we asked to support a deployment in a factory in Ireland by the Belgian head office. The company had invested heavily in automation and were not getting the results they expected. They were critical of the front line workers.
When we went on site we found a highly motivated team but a very poor deployment from the OEM. The team on the floor were having to troubleshoot the issues and this was not documented. We helped them record all this unofficial troubleshooting and reduced the downtime by 20%. While visiting we met other managers from other locations and got their details. The team also spoke and found out what the critical KPIs were for the organisation. They also did on the spot demos. This then lead to a pilot in Germany in another location which lead to a US deployment. We were then selected as the global supplier. All of this is down to being focused on the end users, getting quick wins for them, listening, networking and asking lots of questions. Recurring impact is key.

If you have a sticky product a good deployment can lead to reduced acquisition costs. Land and expand needs to have a good sales plan where CS, Marketing and Sales all play a part.

kwilliams0

CS is definitely a revenue-driving function. I personally don't think of it as selling, but instead about understanding your customers problems, and solving for them. One of the CS plays I'm prouder of running, is when the product team was considering building a new product, we did the following:
1. Had the CSMs introduce a few customers who had submitted the new product idea as a feature request to the product team so they could collaborate directly on the new product.

2. These same customers helped us by piloting the product (knowing it would cost money). They then purchased and acted as references.

3. From there, we took the product to the rest of our customers. This was a public-facing problem, so we ran the solution in the background for all customers, gave the results to the CSMs, and for those customers where there was a significant problem, had the CSM introduce the product with the customer's results in front of them.

This resulted in a high-quality solution, with a significant uptick in growth through the CSMs.

S200ajs

Growth in an account or customer is absolutely part of Success. No we are not sales but if we are not expanding we are going backwards.

Finding new teams, use cases, process, problems that we can help solve.

Jose Antonio

Hi, Rod.

Nowadays, the whole company should be in"selling" mode.

Understanding the "selling" word as an attitude of providing value, help and care before a sale arises.

From a relationship mindset instead of a transactional one.

Alignment within first line areas facing customers is vital to help customers succeed. The company's success comes after that.

Each department should have clear duties linked to the customer journey.

One case to share was providing products and services for a large clinic chain starting at a regional level with a few units.

The CS team was responsible for developing a success plan for each and analyzing and diagnosing needs, pains, and expectations.

It was a collaborative effort with the customer, reaching a consensus, setting time and people involved on both sides and setting a success path to follow.

The customer felt heard and, day by day was seeing positive outcomes internally and impacting their customer experience.

After one and a half years, the same plan was implemented in almost all company units thanks to the high impact on those first units.

I think CS should work side by side in and out to achieve in and out outcomes.

Andy Chandler

Hi Rod,

It's an interesting question and in this market there can be no doubt that Customer Success drives revenue. A couple of examples and a general thought/question on the strategic nature of that for businesses.

We focus the team on increasing adoption and value for customers as a way to both drive increases in revenue and also prevent churn. Most growth SaaS businesses will (need to) have some sort of tiered pricing that customers can grow into as they engage more with the platform but I task our CSMs on driving adoption of individual features within the product, regardless of if that drives revenue all the time or not. Realistically it probably leads to an upsell 10-20% of the time but the rest you are increasing stickiness and engagement which should also result in lower churn. By increasing adoption and value, it also may lead you to other opportuinities inside the customers you have, whether that be other departments and teams that aren't using your software or international expansion.

The interesting inflection points (when NRR hits 100%) for most growth businesses becomes at what point is it more efficient for you to get new revenue from customers then from new business and how can we start to measure that for businesses? Revenue from new business is measured and calculated as the bedrock of a Saas business but as a CS community can we measure the impact of adding a CSM rather than an AE to the bottom line of a business? I'd be interested in yours and others thoughts.

Ed Powers

No, CSMs don't have to become quota-carrying salespeople in order to justify their existence. However, I've found that most CS leaders do a poor job of connecting what they do to revenue and cost—the language of business.

This can be done in two compelling ways:

1. Using mathematics to demonstrate the increase in the likelihood of renewal and expansion decisions with Customer Success compared to without. This difference, compared with the cost of the operation, clearly shows CS ROI. And there are several approaches, from purely intuitive to purely empirical to show it.
2. Identifying and handing off new sales opportunities to salespeople and AMs. I implemented a comprehensive program to do this when I was a VP of CS and we saw a 7% jump in the sales funnel in the first year alone. I now teach my clients on how to do this naturally, without "selling."

Too many believe that CSMs are (or should be) salespeople when it's not their role. Customer Success is uniquely positioned to ensure customers get from Point A to Point B, from value promises to value realization. Item #1 above shows significant financial impact on its own, and item #2 is merely icing on the cake.