This story originally appeared in DestinationCRM.
The practice of customer success (CS) has evolved rapidly over the past decade. It’s no longer about just playing defense to keep your existing customers satisfied. Today’s CS orgs play a key role in creating additional revenue through upsells and expansion, especially at SaaS companies. This is a huge change from when pipeline was purely the Marketing or Sales team’s domain. I believe we’re at an inflection point in terms of CS finally getting the credit for pipeline that this critical team deserves.
Until now, there’s been a “church and state” approach to giving credit/recognition to teams for their role in bringing in new revenue to a company. Sales teams are the deal closers, so they are recognized and incentivized for the role they play in bookings regardless of whether those bookings came from new logos or expansions into existing customers. Customer Success teams are the trusted partner to a company’s customers, and are recognized and incentivized for the role they play in making customers successful, not by the amount of additional expansion revenue potential that a customer’s success might create for a company.
As a marketer, when I look at this model, I can’t help but think that CS teams play a similar role in the realm of expansion bookings as marketing does when it comes to new business bookings. Most Marketing teams aren’t compensated by bookings. But they ARE compensated and incentivized to increase the potential for bookings by focusing on pipeline generation and pipeline acceleration.
Over a decade ago, as marketing got more sophisticated, Marketing teams began to talk about marketing dollars spent in the context of revenue influence and revenue attribution. Today, when pipeline numbers are reported, different types of marketing efforts get different levels of attribution for the role they played in revenue outcomes.
While marketing and customer success are two different disciplines, I believe that the practice of customer success has now reached parity with marketing when it comes to influencing revenue. These days, CS is actually the team (outside of Sales, of course) that has the most influence on new revenue coming in from existing customers. And so it’s time CS teams are able to attribute and get credit for how much influence they’ve had on new revenue coming from the install base without, of course, diluting the higher purpose that the CS team serves.
To be crystal clear: I’m not talking about the CS org having a pipeline quota like Marketing or Sales. It’s about finally having a spotlight shined on the work they’ve already been doing for years, but have never gotten credit for. And it’s not just good for CS; it’s good for your entire organization—because when the CS org gets attribution, it acts as motivation to develop a revenue/pipeline mindset, which fuels more growth.
When Your CS Org Should Ask for Expansion Attribution
SaaS companies of a certain size, maturity, or product offering complexity are most ready to step into the world of expansion attribution. If you’re a startup that’s in heavy customer acquisition and retention mode, expansion attribution is probably not what you need to be prioritizing right now.
Expansion attribution is also probably not the best strategy for companies with a single product, even if you’re an established organization with a huge customer base; there’s no pipeline to mine if you don’t have cross-sell opportunities to offer your customers.
Finally, if you’re struggling with high churn, then you’re definitely going to want to fix that leaky bucket before you start working at attributing expansion revenue.
How to Create a Seamless Attribution System
1. Blend data-driven insights with human expertise to uncover expansion potential. Today’s Digital Customer Success (DCS) platforms have new capabilities to capture insights such as adoption patterns, customer sentiment, use case white space, outcomes delivered, etc., that are often leading indicators of an expansion potential within an account. Your Customer Success team should use that data in addition to qualitative input, the subjective expertise from their one-to-one customer conversations, to uncover expansion opportunities.
2. Partner with your Marketing and Revenue Operations teams. In most companies, Marketing is the voice of pipeline production, even when the pipeline being produced is coming from multiple sources. And they’re used to reporting and presenting pipeline data in a specific way to the company. So it’s crucial to partner with them to make sure the CS pipeline attribution data gets integrated in a way that works for you while not upsetting their applecart, so to speak, and making them reinvent the wheel of their pre-pipeline and pipeline reporting operations. Timing is important here; better to start the process well before the end of a quarter (and definitely long before the end of a fiscal year—learn from my own mistakes in this regard!).
3. Make sure Marketing knows how this helps them. As CMO at Gainsight, I am responsible for a pipeline quota. So if I can get more people contributing to that target, the better it is for our company. And because expansion pipeline has a much higher conversion rate than new logo pipeline, having more hands on deck for it can help close critical gaps.
4. Learn to speak the same language as your partners. If you run into pushback from your counterparts, check your language. Here’s why: The language in this brave new world is very specific—e.g., in some cases it is “pipeline;” in other cases it is “leads.” Pipeline includes the entire sales funnel and is made up of stages that prospects go through as they move through the sales journey. Leads, on the other hand, are specific potential buyers that the Sales team hasn’t yet qualified to be a part of the pipeline.
And if you don’t use the right words, your counterparts might think you’re asking them to prioritize solving the wrong problems and could say “we’re too busy” or “not right now.” Work with your CS platform provider’s own Marketing team; they can help with some of those vocabulary barriers.
5. Allow your Sales org to accept or reject what you send them. Just because a Customer Success Manager (CSM) tells an Account Executive (AE) that there’s an expansion opportunity in an account, it doesn’t necessarily mean Sales will agree. You have to give the Sales org control over what they do with that information and how they qualify it. Because in the end, they are the ones with the expertise to know when a deal is “real” and how to close it. That shouldn’t change.
6. Get your own SLA. Marketing and Sales have had service-level agreements (SLA) in place for years. And you’ll want to have your own version of this contract with your Sales team to make sure you’re on the same page. Your SLA should be a contract you have with Sales that establishes a timeline for what happens when you present a potential opportunity for expansion to your Sales team. For example, if you pass an opportunity to sales on a Monday, it shouldn’t take three weeks for sales to come back to you with a yay or nay. You want to make sure there’s a response time agreed to—24 or 48 hours is common. This agreement keeps everyone accountable, and most importantly, it ensures your customers are taken care of.
Since Marketing is an old hat at this, I’d recommend going to your VP of Marketing or CMO to get their input and advice on how to structure your SLA so everyone is in alignment.
CS will always be the “trusted adviser” that’s focused on taking care of your customers. I’m certainly not recommending that attribution evolves into the Customer Success team owning a quota. But now that Customer Success has a permanent seat at the table of executive leadership, it’s time that CS teams get credit for the work they’ve been doing all along to contribute to pipeline.