Should Customer Success Managers carry Quota ?

By Subraya Mallya - February 2015 | Topics - SaaS

As companies continue to figure out the true role of a Customer Success Manager(CSM), various aspects of the job keeping coming up for debate. As such the Customer Success Manager job is an overarching role that touches various functions such as sales, on-boarding, implementation, training, support, product while continuing to be the single point of contact with the customer.

One such responsibility that gets debated repeatedly in the many discussions I have had with SaaS company leaders is – should CSMs carry a quota? Should they be responsible for up-selling, renewals ?

To set some context and understand how companies have attempted to fulfill the need for Customer Success function will yield the following

  • Large majority of companies have converted their Account Management team to Customer Success Team
  • A smaller minority have all but renamed their support representatives as Customer Success Managers while continuing to expect them to manage their help desk function.
  • Another slice of companies the Customer Success team is an amalgamation of resources pulled from their implementation, sales (the farmer kind), support and account management teams.

Consequently, based on their origins, the charter for the Customer Success team has been made up of responsibilities carried over from their previous function.

Coming back to the question – Should Customer Success Managers carry quota and the responsibility to sell – my recommendation is an overwhelming NO.

A Customer Success Manager, in the true sense, should be a customer advocate within the company and a trusted advisor to the customer. Their only goal should be to make the customer successful by ensuring that the product delivers the value that was “promised” as part of the sale. Adding anything else to that responsibility will distract the Customer Success Manager from their core purpose. CSMs should focus all their time in learning about their customer(s), their business, their revenue model, customer engagement, and provide proactive (and, as needed, prescriptive) inputs to ensure continuous value creation.

What’s wrong with them selling?

You might ask – what is wrong if they are required to sell? They are already talking to the customer and they will have the best indication of the right time to push for renewal or up-sell.

I can think of many reasons but here are some top ones

  • Customer Success Manager will be caught in this dichotomy. They will be torn between prioritizing making customer successful or pushing for a renewal/up-sell to hit their quota. The actions they take might be (partially) motivated by the eventual sale they hope to close.
  • Looking at it from customers’ vantage point, on the one-hand CSMs position themselves as their trusted advisor/guide. But at the back of their mind their intent is to sell. This can create distrust between the customer and CSM and break the “partnership” they have in attaining a common goal i.e. making the customer successful. There can be skepticism in sharing information which CSM can use as leverage to push a deal.
  • Most true CSMs are best at engaging with customers and lack the skills to drive home a sale.

What is the right approach?

While there might be many right approaches, here is one.

  • Separate the selling and customer success function.
  • Assign an Account Manager (or title of your choice) to each account with the sole responsibility of (up)selling. This could be the same person who made the original sale (the hunter).
  • Customer Success Manager will solely focus on ensuring delivery of value. While the CSM is not responsible for a sale, she/he will still be instrumental in making sure the customer renews and does not churn and any potential up-sell. As such their variable compensation should be tied to those goals.
  • Upon identifying the right window for an up-sell, a CSM can/should create a new opportunity in your CRM and have the Account Manager handle it – just like they handle other new opportunities. CSMs can get credit for the resulting sale and get compensated.
  • A renewal then becomes an automatic event resulting from the CSM focusing on and delivering value.

You might say, this is splitting hairs. How is it different from the CSM closing a deal herself and initiating the process for account manager to close? How do we measure CSMs?

Believe me, it is different. The cycles spent on closing, prepping for an up-sell on top of carrying a quota can be a serious distraction for a CSM. Given that the CSM will have a portfolio of customers that they need to be engaged with all the time, getting them to also do sales is loose-loose proposition.

As for measuring CSMs, measure them on customer churn, measure them on expansion of LTV of a customer that they influenced and NPS scores for customers.

What other approaches do companies follow in handling this case? Share your thoughts.

Thoughts shared by readers (2)

  1. Gene Krause Says:

    I definitely agree with your argument. A Customer Success Manager is a customer advocate and not a salesperson. But I wonder if the use of quotas could be salvaged and yet applied to Customer Success Managers. Rather than sales quotas, isn’t it possible to assign quotas of customer contact to Customer Success Managers or Customer Success teams? Rather than quotas of sales, upgrades, etc. like those of a sales team. Couldn’t Customer Success Managers be given quotas of contact of some sort in order to assure that he/she/they/ are “doing the rounds”?

  2. Subraya Mallya Says:

    Definitely. CSMs should be given quotas of a different kind. They should be measured on Churn (or lack thereof) and be given credits for successful upgrades, successful on-boarding, references they generate, # of sales calls they participate, # content material they prepare etc.

    I am not a big fan of measuring the # of contacts with customers. That makes things a routine where CSMs call customers or email them in round robin, on a schedule. That is like my dentist/car-mechanic calling me every month. I would rather my dentist call me when there is a trend in tooth disease that is spreading that I should know of or share with me something amazing that has been invented that is apt for me. My car mechanic call me when there is a recall that I might not have heard of or call me when winter is upon us with a pre-winter free checkup or something that is timely and personalized to my needs. You get the idea. Contacts should provide net value-add to customers and not casual checkups. That can be annoying and time-wasting for customers.

    As for the metrics a CSM should be measured on in terms of quota, I have a post coming up.

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