5 min read
The year 2023 brings significant changes to SaaS businesses, particularly in their customer success departments. With longer sales cycles and increased customer acquisition costs (CAC), businesses must focus on metrics such as net revenue retention (NRR), profitability, and gross margin to drive growth. With this comes an increased focus on customer centricity, automations, and hiring for new roles like RevOps to improve internal alignment.
Another one of the areas where these changes are most apparent is in CS teams generating revenue. According to Planhat’s Customer Success Community Survey, 64% of respondents believe that CS teams and sales should share the responsibility of expansion sales between themselves, with some suggesting clearly defined targets and split compensation as the best way to proceed.
The survey also showed it is essential for companies to have a clear definition of how expansions should happen, who owns them, and how they are measured. So now is the time to build a proactive CS organization that understands your customer’s objectives and keeps your company aligned around them. Anchoring this value creation in a revenue goal such as a quota or target is the best way for CS teams to look forward.
There has long been a debate in CS circles as to how customer success should get a “seat at the table” and drop the negative connotations of being a cost center. If they put an increased emphasis on expansion sales, CS has a great opportunity to drive revenue, quarterbacking growth across the customer base, and leverage other functions when needed.
Whether the focus is on retention to enable future growth, expansion through value creation for current customers or even value creation to drive advocacy and indirect revenue, expansion sales is a huge opportunity for CS. Moreover, analyzing and communicating their revenue impact will only help further establish customer success’s importance to companies.
Of those surveyed in Planhat’s Customer Success Community Survey, 19% indicate that greater alignment between departments could be key for retaining and growing customers. Some even suggest that marketing and product teams should be involved and held accountable for reaching sales quotas. But only 17% believe expansion sales should be the sole responsibility of customer success.
Therefore, ensure you deeply understand customer objectives and align your operating model and all your teams toward customer value creation. Use your customer data to stay on track, as well as a signal when your customers are ready to expand. Because as we all know, customers that achieve what they set out to achieve with your products will buy more.
In Planhats Customer Success Community Survey 2023, we asked some of the leading thinkers in our industry about how they will take on this year’s CS challenges. This is what they had to say about CS and Sales aligning on customer expansion:
It’s critical that CS and sales partner throughout the customer lifecycle. Sellers continue to be the business owner of the relationship with CS providing day-to-day coverage and relationship expertise. If there are challenges, it is imperative that CS inform sales, as they will likely need to be aware, or take action based on the situation.
Senior Vice President Customer Experience
Sales should learn to be more outcomes-focused, over revenue-focused. The only way to drive expansion is by proving to customers the value of a product, and highlighting additional opportunities for adoption. This needs to take place before we start hard selling to people who haven’t gained anything from our offering.
Vice President of Customer Operations
Sales and CS should partner together in key communications with clients, whether that is meetings or QBRs to share discussions on technical topics and best practices, industry connections, upcoming projects, and license needs. CS can also generate new sales opportunities for the Sales team based on knowing in depth customer needs and by analyzing product usage.
Director of Customer Success
Toon Boom Animation
This trend of companies utilizing CS to ensure the sustainability of revenue will only be on the rise, thanks to current conditions. More and more SaaS businesses will be looking to CS to bring in a greater market share than they have before and, at the same time, utilize the internal benefit of the sales team. In the trickiest of markets, this tactic will help companies increase NRR. However, in order for this to work, both CS and Sales must know how to play their part. Both teams must share ownership and responsibilities for this divided role. This works well when there are metrics – but different team members must have different metrics related to their particular roles within the sale.
Customer Success Manager
Now is the time to get ahead, know which strategies to double down on, which technologies to invest in, and which roles to prioritize. Help your business to stay profitable and make the right decisions by downloading your copy of Planhat’s Customer Success Community Survey 2023 today.
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