Customer success responsibility for revenue is a hot topic and highly debated in the CS world. So, should a CSM hold a revenue target? Should CSMs be compensated like we do in sales? And should we really be charging for CS or should it be baked into the cost of goods sold?
With extensive experience in direct sales and enablement, Emily brings a holistic view of the customer journey to CS. Emily has built and reshaped multiple functions, allowing her to offer a practitioner’s view on creating an impactful and scalable customer focused organization. As the AVP of Customer Success at Fastly, Emily supports teams across multiple customer segments to drive customer business value and revenue growth.
One of the most important factors for revenue growth is successful renewals. It is not just an upcoming date that needs to be extended, but a large proportion of overall sales. But, should renewals be owned by CS or the sales team?
“I think that depending on the structure and as long as it is really focused on that overall long-term build rather than kind of those short-term wins, then it can be owned by customer success.”
So, what is CS responsibility for ARR and how much ARR should one CSM actually handle or be responsible for? Fastly has a combination of activities they look at including time-based as much as it is revenue based.
“We don't have a CSM to ARR model, but what we've done instead is we've outlined expected behaviors and actions for each of our segments, and then put together more of an allocated time model.”
Having aligned compensation goals and target metrics across the board naturally makes your business more customer centric. But compensation models for CS can be tricky. For example, should CS have direct sales targets or how are you making sure they hit a certain net retention number?
“So I think looking at it from an annual perspective allows everything to be the right size and really show the overall direction of the book of business that the CSM drives.”
It can be challenging to find a way to charge for CS as it is kind of expected these days - unless you have the exact metrics that your CSMs are supposed to uphold in the entire lifecycle. So, should we really be charging for CS or should it be baked into the cost of goods sold or the cost of your purchase?
“I love the idea of charging for a CSM, but personally, I think it's really hard to do that, especially if you have a technical product. There is a hundred percent still value in having a CSM. But I don't know if it's enough value that customers can wrap their minds around to pay for.”
Listen now to the full conversation with Emily and Anika about CS responsibility for revenue.
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