As a Head of Customer Success, I’ve seen how sales and customer success have become more closely linked over the years. We’ve gone from just being "there to help out" to being key players in growing revenue.

In this article, I’ll shed light on my journey and experiences, illustrating how customer success can seamlessly align with revenue goals and the importance of fostering collaboration across departments. Specifically, we're going to cover:

Customer Success Managers: The best candidates for identifying growth opportunities

Let's not beat around the bush: Customer Success Managers (CSMs) are a company's soldiers on the frontline of customer interactions. It'll come as no surprise that having this unique ear to the ground makes them ideally positioned to identify areas for driving revenue and expanding accounts. They know what's working and what isn't.

There are many opinions on who should own account expansion, and it often depends on the size and structure of a company. 

In the organization I work for, PlanRadar, we approach this collaboratively, with both sales and customer success sharing responsibility for revenue and account expansion.

Ownership of account expansion

The ownership of account expansion is part of a broader discussion on team responsibilities. In our organization, both sales and customer success teams are responsible for revenue and revenue expansion. 

While sales primarily handle new business, customer success also plays a crucial role in closing deals post-sales. This collaborative approach ensures that customer success enables sales to explore new opportunities within existing accounts.

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Identifying extra opportunities to cross-collaborate

Effective collaboration across various departments is essential for driving revenue from account expansion. 

Besides working closely with sales, customer success collaborates with several other departments:

  • Product management and R&D: We filter customer feedback and relay it to product management to ensure the voice of the customer is heard. Additionally, we bring feedback from product management back to the customers.
  • Marketing: We work with marketing on campaigns, reference programs, customer advocate programs, webinars, success stories, and case studies.
  • Revenue operations and finance: Collaborating with these teams helps us establish scalable processes, maintain data quality, automate tasks, and make data-driven decisions.

As the Head of Customer Success, my primary responsibility is to bring together these different departments and ensure smooth, cohesive operations.

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Structuring for success

In our current structure, we have a "growth team" composed of peers from various departments that significantly contribute to growth and revenue. This team collaborates continuously to break down silos and work together effectively. Supporting teams like finance play a crucial role in enabling the growth team’s initiatives.

This structure has proven effective for us, fostering collaboration and ensuring that customer success is a key driver of revenue growth. While other organizations may take different approaches, this method has worked well for us.

Using data to measure revenue growth

A common challenge among customer success managers is making the best use of data to measure revenue growth accurately. 

If you're starting out and unsure how to align customer success with revenue growth metrics, building relationships with key departments such as revenue operations and finance is crucial. 

These departments provide the necessary processes and data, making financial information visible and digestible through various charts and dashboards.

In our organization, I have weekly one-on-ones with revenue operations and regular discussions with finance to analyze different customer journeys by region, team, and individual. This helps us understand the reasons behind customer behaviors and track these metrics effectively. By clustering data and developing backed strategies, we can predict trends and make informed decisions.

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Key metrics for revenue growth

The three main things our team looks at to measure revenue growth are:

  1. Gross revenue retention (GRR): This measures how much revenue is retained from the existing customer portfolio.
  2. Net revenue retention (NRR): This includes GRR plus any upsells, reflecting overall revenue growth.
  3. Existing business target: This is a collaborative target involving both CSMs and sales, aiming to achieve set revenue goals from existing customers.

Next year, we're aiming high with net revenue retention above 120% and gross revenue retention above 90%. These are ambitious targets, but they're region-specific, so we've got our work cut out for us! Involving CSMs in the existing business target makes sure they work together with sales towards the same goals.
We also give sales managers an incentive to focus on renewals to make sure they keep up good customer relationships. This approach stops salespeople from getting too hung up on closing new deals and encourages them to keep up with their customers.

If you set realistic expectations from the start, sales managers are more likely to engage with customers consistently, which helps them succeed overall.
In our company, we try to get the CSMs and sales teams to work together as one. The tricky part is making sure they engage with the same customer in a way that doesn't overlap or clash with each other.

We make sure we don't get stuck in the same place by holding joint strategic account planning and success planning sessions. This means that both teams work together, each with their own specific responsibilities, to get the best results for the customer.

Effective communication and teamwork

Good communication and teamwork are key to any company’s success. If they're not in place, customer success initiatives can fall flat, especially if they're seen as just another sales team rather than an essential part of the company. This can make it tricky to get all the customer success strategies up and running.

One of the main challenges in driving revenue versus success is that different departments have different priorities. While each department is trying to achieve its own goals, it's important to make sure these objectives are aligned across the whole company.

As a customer success team, we often depend on other departments, and trying to force our priorities onto them isn't very effective. Instead, it's up to the leaders to make sure that everyone's on the same page and that the goals are updated regularly throughout the year to keep things running smoothly and everyone's working towards the same things.

On top of that, not having enough resources can also cause problems. Teams might find it tough to scale up quickly, have trouble hiring, or deal with short-term setbacks. If we can understand why these bottlenecks are happening and deal with them openly, we can limit the impact on the company.

It's important to look at the whole organization, not just in silos. For example, it's better to allocate resources where they'll have the biggest overall impact, rather than hiring more CSMs when another department needs resources. This way of looking at things helps to make the organization as a whole healthier.

Challenges for CSMs

Looking to the future, customer success managers will face several challenges:

  1. Catering to diverse markets: We work in different regions and markets, which have different levels of maturity. It'll be a big task to develop structures and processes that can cope with all these different situations. Making sure we succeed in markets with different growth stages requires us to think on our feet and be flexible.
  2. Hiring and keeping good people: It's always a challenge to find and hire talented individuals quickly enough to prevent bottlenecks. As we grow, this is still a big focus to keep things moving and make sure we have the right resources in place.
  3. Leveraging AI: We're looking to integrate AI more effectively into our operations. While we're looking into AI, it can take a while because there are so many steps involved. There are so many ways AI can help us, and we want to get it up and running as quickly as possible to make our customers happier and help our business run more smoothly.

If we tackle these issues in a strategic and collaborative way, we can keep on making progress and driving success as the year goes on.