Ongoing Debate

There is a debate that goes on between Customer Success professionals about whether or not CSMs should sell. The argument against it often goes something like this: The CSM is a ‘trusted advisor’ and as such their role is one of service, not selling, or… as a ‘trusted advisor’ discussions around sales and pricing may adversely impact their role as the customer’s ombudsperson. Although there are instances where this may be the case (I’ll touch upon them below), I think it is worth looking at some reasons you may want your CSMs to upsell and possibly cross-sell. My hope is that what follows will provide you with something to think about as you address this challenge yourself.

Why CSMs Should Sell

1. ROI is what the customer cares about: I believe that businesses exist to add value in the markets they participate in. This is clearly a B2B perspective. I can argue that in a B2C market, the goal may be an experience, to make someone feel good, or to make them feel better than someone else (think about a $8,000 Sport Coat from Kiton or a $2,000 pair of Roger Vivier sandals). In business however, the job is to drive value in a market, to make your customers “successful”, to provide a return on their investment in your company, an ROI. If you believe like I do that ROI is the most critical and viable metric for an outside-in view of customer success, then ask yourself: Who has this discussion with customers? Shouldn’t it be their “trusted advisor”… the CSM? To continue with this logic, isn’t it impossible to talk about ROI without discussing cost? Shouldn’t a trusted advisor discuss other things your company may be able to offer their customers that would help them to succeed? How do you quantify the value of this investment without touching upon the cost? Should this decision and advice not be based on ROI? If so, once again, we’re talking cost/pricing at a minimum.

2. Is Your Company “Good for Your Customers”: If your company is good at what they do, if you add value to your customers business, isn’t it the role of a trusted advisor to make them aware of this? If your CSMs are consultative and proactive, isn’t it their job to have these conversations? If your company is good at what it does shouldn’t CSMs talk about what future value you can provide? If the answer is yes, why can’t they have the conversation about what it will take to realize this value? To do this credibly pricing is important, it defines what it takes to make this value “happen”. No sales pitch, rather an open discussion about your customers business goal and what you can do to help achieve them.

3. You get it, but why not just let Sales handle it? I think in part it’s because I believe that the reason Customer Success exists is to make sure that the Customer Renewal Costs (CRC) and Customer Expansion Costs (CEC) offset Customer Acquisition Costs (CAC). Consider this data from David Skok. The average CAC for a SaaS company was $1.15/$1.00 of revenue in 2017. To drive CLTV (which is based on profit) success requires the retention and expansion costs to be significantly lower than that of acquisition. Just flipping to sales doesn’t necessarily contribute to this goal. Sales people should always focus their efforts on those activities in their comp plan that maximizes their income. This is what those plans are designed to do. If the value of renewing or expanding is less that acquiring, you may be missing out on revenue opportunites.

4. Farmers vs. Hunters: Is there a difference? Over my career (which as been quite a few years:), I’ve had the pleasure to work with a lot of different AEs and AMs. I can only remember a handful that were both hunters and farmers. I think this is because each requires different skills. Hunters look for new game and kill it. That means they are always searching for something new (an account), and closing those deals. That’s what makes them tick. To farm is quite different. It is more strategic in nature. You don’t harvest corn before the ears are mature; sometimes you trim back a tree to maximize output over years (CLTV). As such, if your AEs are hired to be hunters, they don’t necessarily have the skill set to switch from hunting to farming on an as needed basis. Jack of two trades, master of neither.

5. Is your relationship with your customer personal or business centric? Don’t get me wrong here; I’ve had plenty of customers that were good friends. We go out together, have common interest, and do things outside of work but that is not my job. Clearly it can help, but in a business relationship your job is to do what is best for the customer. This means sometimes you need to disagree with them. You have to tell them what you can and cannot do for them. This is not based on your personal relationship, it is based on what is best for their company.

As promised, here are some caveats to what I said above:

  • If your pricing is wonky (discounts run from 0 to 70%), then your CSM credibility is at risk. Sure, they can give discounts but they should be: 1) An extension of discounts in existing pricing or 2) in line with standard discounts that sales can offer. If the deal requires deeper discounts, then executive management should required to make the call, as such the sales person is often just a go between on pricing discussions.
  • In dealing with large enterprises, the purchasing organization is often involved. In theory, these purchasing people should be professional negotiators. If your CSMs are not (and I don’t think they should be), then you need someone who is. I know of CS organizations that have an individual on the team for just such instances.
  • Enterprise account can be really complex. In an instance where the renewal and buying teams at customers are very complex, your team should be designed to balance that complexity. This will often require a team approach.

Clearly this issue is complex, and your approach should be designed for your business. The purpose of this blog is not to be prescriptive, but rather to take into account the factors above to make your decision! Hope this was helpful. If you have any questions, or comments, I can be reached via LinkedIn or at my email [email protected] Happy farming…

Tom Lipscomb is a Bay Area Executive who has spent his career helping companies around the world deliver products and services that contributes to their Customers’ Success. He has always lead organizations with the understanding that, as Peter Drucker says, “Value in a service or product isn’t what you put into it, It is what the client or customer gets out of it.”

Tom Lipscomb

VP of Customer Success, Datanyze