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Should the Customer Success Function Carry a Sales Quota?

should customer success function carry a sales quota?

At the 2015 conference, Jason Lemkin famously said that “Customer Success is where 90% of the revenue is.” This bold statement really does hold validity to it. Most of the revenue your company will rake in will come in after the initial sales are received. Renewals, upsells, and cross-sells will help with customer success, which is why they will continue providing you with more revenue. Customer success sales quota will help account managers and the company overall to reach sales quotas, but only if customer success managers help customers achieve the success they want to actualize. 

While there should be a customer success sales quota, it should be measured differently than a standard sales quota. Here is how the customer success sales function differs from others. 

How a CSM Sales Quota Differs? 

Customer success managers are, first and foremost, tasked with helping customers succeed in their own goals. This differs from account managers, who are focused on getting as many renewals, upsells, and cross-sells they can get their hands on. The CSM focus also differs from the sales team’s laser focus on getting as many new sign-ups as possible. 

At the end of the day, all of these teams have the same fundamental goal: get more revenue flowing into the company. It may seem that the goal for all teams is to have satisfied and successful customers who will continue as customers for a long time to come. 

There is a key difference. CSMs have a customer success sales quota that uses different metrics. This leads to differing priorities, which is what you want. An account manager will be someone whose goal is to lock in all the renewals, upsells, and cross-sells from customers they want. A sales team will focus on getting as many new customers as possible. These lead to a true sales quota, using metrics that define a specific number of sales within a given period, just to give an example. 

Customer Success Is the Focus 

A customer success manager will have a sales quota that is met by using success metrics in relation to those same customers. 

For examples, one way to measure customer success is to measure the ROI that customers achieve thanks to the utilization of the company’s product. Alternatively, they could boost the Net Promoter Score, which is a metric that identifies how great of an experience a customer has with the product. 

There are several ways to use a modified version of the sales quote within the customer success function. All of them are connected to the Lifetime Value of a customer. When customer loyalty is strong, you can be confident to assume that customer success is being achieved. 

The most loyal customers are also the most valuable ones to any SaaS company. They will be a source of revenue that you can count on for the long-term. As you probably know, the average customer acquisition cost is five times that of the cost for retaining existing customers. This makes the customer success function a critical focus if you want your product to succeed. 

When a customer sees that they receive a streamlined, seamless, and simple onboarding experience, they will likely stick around and start using your product regularly. If they find that your product is one that they should definitely adopt to boost their success, they will be a recurring customer that renews their subscriptions. When they see the value added by various upsells and cross-sells, they will expand their use of what your product offers them. 

Customers who find value and success in these areas will probably refer your product to their network, bringing you further sales and increasing their lifetime value. CSMs, therefore, have a customer success sales quota that is not a cut-and-dry summation of how many new subscriptions or expansions were sold. It is a more nuanced metric that is based on the success of the customer, since that will bring with it a wellspring of additional revenue opportunities down the road. 

Customer Retention Is Elementary 

One of the most elementary customer success sales functions for CSMs is to retain customers. Generating revenue comes directly from retaining customers. You are reliant on the customers you currently have to pay for acquiring new customers and increasing your revenues. The longer you retain a customer, the more their lifetime value. 

Yes, there are different metrics used among sales teams and account managers when it comes to a sales quota, compared with what CSMs look at. You can even say they are very different. However, at the end of the day, they all help one another achieve more revenue. Since most revenue comes from customer success, the metrics need to identify what is helping customers achieve the success they seek to gain from using your product. 

Customer success metrics are directly connected to the revenue and other metrics that the customer achieves. This means that CSMs will act in a way that is proactive and relationship-driven. This is a strategy for product success, which leads to, you guessed it, more revenue. 

A Different Kind of Sales Quota 

The customer success sales quota differs from the standard kind, yet it helps achieve the same thing, which we mentioned earlier. While it may differ a bit, the same goal is in mind, always. It is just the methods of pursuing the goal which is different. 

This is also a reason why you should avoid trying to cut costs by renaming your account managers to be CSMs. Account managers need to stick to their own sales quotas and stay focused on their responsibilities. CSMs should be focused on achieving customer success and the metrics which measure it. 

CSMs, account managers, and the sales team can all work together, since they all have the same goal of increasing revenue. However, they each need to stay focused on their part of the customer life cycle, to make sure increasing revenue is a goal that is successfully achieved. 

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