Is Customer Success Part of the Sales Organization?
It’s a Common Question Without a Definitive Answer
However, as with a number of other factors that come with setting up a customer success function in a B2B SaaS company, the frequent response is “it depends.” It’s easy to understand why the question of whether customer success is part of the sales organization is a common one for two reasons: 1) because of the role customer success plays in the growth of the business and 2) the potential difficulty of overseeing it alongside sales. Let’s explore these more closely.
Customer Success is a Revenue Function
For B2B SaaS companies with an annual license agreement structure, customer success is often responsible for managing and closing renewals. They start the company’s new fiscal year with a book of business equal to all of the previous year’s retained ARR plus all newly sold ARR. Thus, they’re managing all recurring revenue. Additionally, if customer success consists of consultative, commercially experienced people, it’ll be in a stronger position to predictively renew customers as well as capitalize on the expand component of a land & expand strategy.
Differences in Team Management
If customer success is part of the sales organization, then the person overseeing it will need to be able to successfully lead and manage teams with top performers that often exhibit vastly different behaviors. Let’s consider what behavioral tools such as Culture Index say about this:
- On the sales side, the best account executives are competitive and independent, have a strong drive, are impatient for results, have a relatively low attention to detail, and are flexible with rules.
- On the customer success side, the best CSMs/account managers are collaborative, consultative, steady, long-term focused, detail-oriented, and structured around rules. (Note that the best CSMs are more competitive relative to the general population, but not as competitive compared to account executives.)
Two Scenarios in Which Customer Success as Part of the Sales Organization Could Make Sense
A B2B SaaS Company with a Product-Led Growth (PLG) Strategy
In this example, key focuses such as user acquisition, conversion, retention, and expansion are primarily driven by the software product. In a PLG environment, the customer success organization often becomes involved during the buyer journey by leveraging product usage data and other health metrics to guide newly acquired customers to conversion and beyond.
Once the SaaS company has established a foothold with a customer’s user base, the potential for expansion increases — such as growing it into a potential enterprise account. Customer success would then provide this opportunity to sales, which then pursues growth. In this PLG scenario, customer success is part of the sales organization because the two functions are closely intertwined, with customer success sharing customer information that leverages the bottom-up selling approach that, with sufficient numbers and conversions, opens the door for what’s ultimately a top-down sale of an enterprise license by sales.
Already have a strong customer success function? Learn how to take it to the next level — without adding headcount. Read More
A B2B SaaS Company with a Strong Revenue Expansion Opportunity
In this example, the initial sale was essentially the SaaS company getting its foot in the door with a new customer. Not only is additional recurring revenue possible but it’s also key to the SaaS company’s success in growing quickly and attracting new investment at a higher valuation. Here, a CSM will be simultaneously delivering on the business outcomes for a customer while also looking for opportunities available as a result of their proximity to and trust built with the customer to better map the organization and gain introductions to other decision-makers.
In this scenario, customer success is sniffing for commercial opportunities and teeing up sales with new, well qualified, and top-of-the-funnel revenue opportunities in the form of account expansion. Like the PLG scenario described above, this scenario augurs customer success and sales organizations that are working side-by-side and in lockstep in pursuit of additional revenue via top-down selling.
Business Growth = Customer Success Growth — Explore four situations that indicate it’s time to grow your customer success team. Read More
Maximize What Customer Success Can Achieve for Your Business
Whether you’ve been treating customer success as a separate function or have already been including it in the sales organization, now is the time to identify opportunities for improvement. With the road ahead still uncertain, leveraging the power of customer success for your SaaS business can put a strong foundation in place to strengthen revenue from existing customers and contribute to expansion.
Carema Consulting works with B2B SaaS companies nationwide to help them understand customer success as part of the sales organization and what that means for growth. Learn more about our land & expand philosophy, then get in touch with us to put our expertise to work for your success.
