Embracing the role of revenue generation in customer success

This article is based on a presentation given by Kimberly at our Customer Success Festival in Boston 2023.

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Embarking on the journey of integrating commercial roles into customer success is a transformative experience for any business. It's about redefining the traditional boundaries of customer success, not just by supporting customers but actively contributing to revenue generation and business growth.

I'm Kimberly Ayala, Director of Customer Success (North & South America) at Akeneo, where we've embraced this challenge head-on. My career has been a blend of customer success, account management, and even sales, providing me with unique insights into how these functions can synergistically drive a company forward.

In this article, I'll share my experiences and strategies on:

My journey into customer success
The challenges and rewards of integrating sales into customer success
How to best differentiate roles between CSMs and Account Managers
Balancing sales and renewals in customer success
Valuing customer success through target-based incentives
Navigating challenges and innovations in customer success
Embracing the mindset shift in customer success

My journey in customer success

I serve as the Director of Customer Success for North and South America at Akeneo, a company specializing in product information management software. Imagine your favorite online retailer - the detailed product information you see there is likely powered by a solution like ours.

I joined Akeneo two years ago, starting with a team of just two Customer Success Managers (CSMs). Since then, I've been fortunate to scale the team up to five.

Our company, headquartered in Nantes, France, with a key office in Boston, was recently honored as one of the Top 100 Software Companies of 2023. My role at Akeneo was a culmination of 15 years of diverse experience in customer success, account management, and even a stint as an Account Executive.

This blend of experiences was crucial for Akeneo, as our customer success team has always played a role in managing commercial aspects, specifically in renewals and upsells.

Since my arrival at Akeneo, we've accelerated the involvement of our CS team in commercial activities. The journey hasn't been without its challenges, but the results have been immensely rewarding. Today, I'm eager to share how we managed this transition, the obstacles we faced, and, importantly, the benefits that emerged from this strategy.

The challenges and rewards of integrating sales into customer success

Addressing the common apprehensions about CS professionals handling commercial aspects, many often express concerns like, "selling feels uncomfortable," or "forecasting seems like a task for a psychic."

These sentiments resonate with me as well; initially, I too felt that asking customers for money or managing sales forecasts was outside the comfort zone of a CS professional. However, the benefits we've observed at Akeneo have made stepping out of our comfort zones incredibly worthwhile.

One of the most significant benefits has been our customers achieving their objectives more effectively than ever. By closely aligning customer success with commercial activities, we've been able to demonstrate and drive home the real value of our services.

This alignment hasn't just benefited our customers; it's elevated the internal standing of our CS team. We now have a more substantial seat at the decision-making table, leading to better job security, increased investment in our department, and greater recognition and compensation for our team members.

Our proactive approach to owning upsells has notably improved our customer retention rates. In a climate where retention is a universal challenge, my team has been excelling.

We've achieved a record-breaking retention rate, with our last quarter at 99.1% and an annual rate of 97% globally. This success underscores that we're doing something right by blending the roles of customer success and commercial management.

Differentiating roles: CSMs vs. Account Managers

It's crucial to understand the difference between the roles of a CSM and an Account Manager (AM). As CSMs, we are deeply invested in our customers' long-term success. We're their trusted advisors, equipped with in-depth product knowledge, best practices, and case studies. This positions us exceptionally well to manage upsells effectively.

On the other hand, Account Managers are quota-driven and often prioritize larger deals due to this. Their focus is more on short-term goals and closing deals, after which they typically move on, leaving the long-term value delivery to CS teams.

While I empathize with the challenges faced by our sales colleagues, the contrast in roles makes it clear who a customer would likely prefer to handle their upsells and renewals - a trusted advisor who understands their business and has comprehensive product insight.

Balancing sales and renewals in customer success

I'd like to address a familiar yet disheartening experience many of us in customer success have faced: having customers who express satisfaction and yet decide to churn. It's like a personal heartbreak, especially when they delay conveying their decision to avoid hurting our feelings.

This brings to light the complex dynamics of customer relationships and the crucial role of understanding and delivering value.

This year, while hiring a new CSM, I encountered an intriguing scenario. A former point of contact from a customer company reached out, expressing a desire to shift his career towards customer success, particularly to join my team at Akeneo.

Initially, this seemed like a perfect fit - he was familiar with our product and understood the business outcomes it drives. However, during our conversation, he repeatedly emphasized his desire to be the "customer's best friend," placing customer satisfaction above all else.

This perspective, while admirable in its customer-centric focus, indicated a misunderstanding of the broader scope of the CSM role. It's not just about being a friend to the customer; it's about driving tangible value and business outcomes.

This interaction reinforced my belief in the importance of focusing on driving value for customers. I follow the insights of CS maestro Greg Daines, who famously said:

"Companies that focus on retention tend to have poor retention. But companies that focus on expansion, get retention for free."

This philosophy has been evident at Akeneo. We concentrate on ensuring that every product and service we offer integrates seamlessly into our customers' organizations, making their departure not only undesirable but also challenging.

Integration into a customer's ecosystem involves two critical aspects: people and infrastructure.

Firstly, it's about expanding our reach within the customer's organization - touching unexplored geographies, impacting different departments, and introducing our products to various segments of their business. This approach ensures that if one area derives less value, another might compensate, bolstering overall retention.

Secondly, the integration into a customer's technical infrastructure is vital. The deeper our products are embedded into their tech stack, the more challenging it becomes for them to consider a switch.

This integration not only makes a departure labor-intensive but also reinforces the ongoing value they receive from our solutions. The more we sell, the more integrated we become, and the stronger our position is when it comes to renewal time.

Valuing customer success through target-based incentives

In our approach to merging sales with customer success at Akeneo, we've implemented a unique structure that focuses on targets rather than quotas. This distinction in terminology is crucial for me, as I believe in setting goals (targets) rather than imposing rigid quotas. This approach aligns more with the ethos of customer success, which is fundamentally about nurturing and growing customer relationships.

To compensate our CSMs for their role in expansion and retention, we have introduced a bonus system. This system is intricately linked to three key factors: retention rates, expansion numbers, and management by objectives (MBOs). This incentivization model has been a powerful motivator for our team, particularly for those who are driven by financial rewards.

One of the most exciting aspects of this structure is the opportunity for overachievement. In 2022, we had the unique situation of outperforming the sales team in one quarter (though that's our little secret!). As a result of our success, we've introduced multipliers into our compensation model, further motivating the team.

Beyond financial incentives, we've also seen tangible growth in our team size and investments in our infrastructure, even during times when other companies are downsizing. We're currently rolling out a new customer success tool, which is a testament to the investment in our department.

Perhaps one of the most gratifying outcomes of this approach has been the increased recognition of the value of CS within the broader business context. We're now integral participants in key business decisions, reflecting a deep understanding and appreciation of the role CS plays in achieving business outcomes at Akeneo.

This strategic involvement is not just a sign of recognition but also a testament to the tangible results our team has delivered.

Navigating challenges and innovating in customer success

But let it be said that integrating sales into the customer success function hasn’t been without its challenges. A significant hurdle is that not every CSM is naturally inclined or experienced in sales. For many, this is a new territory requiring substantial enablement and training.

Developing sales skills

Developing skills in forecasting, discovery, sale staging, and negotiation is crucial, as these are key components of effective selling, even though they can initially seem daunting.

To equip our CSMs with these necessary skills, we encourage participation in sales enablement sessions. This approach not only builds competencies but also fosters camaraderie between the sales and customer success teams. Over time, this has led to a stronger relationship and mutual respect between the two departments. We aim to function as one cohesive unit, understanding and empathizing with each other's challenges.

Pipeline reviews

Hosting our own pipeline reviews, separate from the sales team, has proven to be an effective strategy. These sessions are not about creating competition but about learning from each other. During these reviews, we discuss different approaches to challenges, share experiences, and brainstorm solutions. This practice has become an invaluable part of our team's development and success.

Geographical advantage in innovation and adaptability

Being based in the U.S., while our company's headquarters are spread across France and Europe, offers a unique advantage in experimentation and flexibility. This geographical separation allows us to trial new approaches and innovate independently.

We've been pioneers in starting a tech-touch function and implementing new customer success software ahead of other regions. This freedom to experiment with small groups and remain adaptable has been crucial to our progress and success.

To effectively integrate these changes, it's often necessary to gain top-down sponsorship, which might involve creating a compelling business case. This support is essential for securing the resources and buy-in needed for a successful transition.

Embracing the mindset shift in customer success

One of the most critical challenges in integrating sales into customer success is facilitating a mindset shift among CSMs.

It's paramount for CSMs to feel comfortable with the concept of selling, recognizing it as an extension of solving customer problems. This shift involves understanding that we are here to present all options to our customers, both free and paid. If we're not offering every solution, we're essentially withholding potential value from them.

I recall a telling experience from my time as a CSM at what is now First Step, formerly Dynamic Signal. During an account transition, a colleague walked me through an elaborate process for generating a report for a client. It was complicated and time-consuming.

When I discovered that we had an integration that could simplify this process, I suggested it to the client. The reaction was overwhelming; they were eager to pay for this solution, seeing its immediate value. This experience highlighted the disconnect that can occur when CSMs are hesitant to upsell or when sales teams are not focused on smaller but significant customer needs.

It's not just the CSMs who need to adjust their mindset; other departments like sales and operations must also adapt. In sales, there might be initial resistance to this new approach, as they are accustomed to handling renewals and upsells.

However, by framing this change beneficially for them - such as reducing their load to focus on bigger deals - we've found that they become more receptive. At Akeneo, we've cultivated a camaraderie where both sales reps and CSMs benefit from this arrangement.

In terms of operations, it's vital for them to recognize the needs of the CS team alongside those of the sales team. Since we don't have a dedicated operations person for CS, building strong relationships with the operations team is crucial. They need to consider the requirements of CS when making decisions in systems like Salesforce.

Undertaking this transformation in customer success, integrating sales responsibilities while ensuring a seamless and beneficial collaboration with other departments, is a journey. It requires diligent change management and time. However, the rewards in terms of customer satisfaction, team empowerment, and business outcomes are immense.

Going commercial: Embracing the role of revenue generation in customer success