Who Should Handle Upsell - Customer Success Or Sales? - 10 Questions To Ask Before You Decide

10-Jul-2017 17:08:42

The question of who should manage selling to your customers is something I’ve been asked and seen posted online more than any other customer success question.

Many people will be quick to jump to their version of the perfect solution but in reality, there is no single answer. The context of everyone’s business, resources and customer base are so different that the decision has to vary company to company.

Instead of arguing for one side or the other I’ve compiled a list of questions and factors to consider when making this decision. My goal is that these questions will help you on the way to making the right decision for your team and business.

1) Company growth stage and maturity


How fast are you growing year over year and where is that growth coming from?

If you’re a startup or scale-up, new business is likely the driving force of your net revenue. In this stage, it’s critical that the sales team focus 100% on net new business. This focus will allow you to define and refine your sales process and get really good at signing up new customers. In this world, the CSM can focus 100% on the customer experience post-sale including upsell and cross-sell. This focus is critical early on to learn fast and keep your team's priorities aligned.

Conversely, if you’re a mature organisation with high penetration, you may depend heavily on selling back into your install base to drive new revenue. In this case, sales should take responsibility for upselling and cross-sell. At this stage expansion revenue can be essential for sales to hit their targets and if you’ve hired right then sales will just be better at it anyway.

In this world, it also gets harder and harder for CSMs to simply replace churned customers by upgrading. More importantly, as your install base grows it takes a lot more effort and to move your customer retention metric by even the smallest %. At this stage, it’s more efficient to have CSMs focus 100% on driving intended value and long-term retention. By this stage, you’ve likely learned or have enough data to be sure what exactly it takes to make customers truly successful and it’s a matter of execution.

2) Product maturity

What exactly are you upselling?

This varies from company to company and across industries. If you have a single product with a simple or transactional upgrade path, it’s easy to have a CSM manage that process. Usually, this kind of sale is value based or a function of their success or growth anyway.

If you have multiple product lines or a lot of add-on products, however, it becomes more complicated. In these instances, a huge portion of CSM time could end up being dedicated to running lengthy sales process to bring on new divisions or teams within their customer's business. This kind of activity is important but it’s distracting from driving value and results from the products your customers already have.

In a multi-product world, it’s often better to have sales or a specialist sales team manage these upgrades with close collaboration from the CSM team. If you’ve got a simple or transaction upgrade process then it might be easier to keep it with CSMs.

3) Scope and responsibility of the CSM


Where do your CSMs spend their time and what numbers are they truly responsible for having an impact on?

In the early days, I’d advocate for having your CSMs be generalists. It allows you to move fast and learn a lot about your customer and market needs. As you become more mature and process driven that scope of responsibility should reduce to allow to focus on a few (1-3) core areas of responsibility.

If your CSM team are responsible for onboarding, training, renewals, health checks, quarterly account reviews, success plans etc, adding or keeping a sales component on that list might force them to de-prioritise some core areas. If you are asking your CSMs to perform a wide variety of tasks it’s going to get increasingly difficult to improve the metrics in each area without some prioritisation and focus.

Take onboarding or implementation for example - this is a critical phase of a customer's lifecycle that requires focus for the long term. If your CSMs are delivering this service but are also expected to drive upsell in their customer base they could end up solving for the short term over the long term.

Ask yourself - if I really want to increase upsell or account expansion who has the most capacity and focus to execute it? Can I add another responsibility to my CSMs plate? If I remove this responsibility will it allow them to focus and move the needle on another metric?

4) The current skill set of your CSM team

If you’re planning to remove the selling responsibility from your CSMs or move that responsibility to them, it’s important to ask what skills you hired for in the first place and what expectations were set.

If you’ve hired for traditional account management skills it’s likely that your team are quite good at negotiation and selling and might even enjoy that kind of work. Moving that responsibility to a sales team could impact their morale or enthusiasm for the role.

Likewise, if you suddenly place an upsell burden on your CSMs who don’t have that background they may resist or not be bought into the change. Some people are really averse to selling so studying the makeup and skillset of your team is critical to making this decision.

Can you effectively answer this question from your CSMs? - what will replace the sales portion of my job that’s been taken away from me? It needs to be crystal clear that - now I am not focusing on account expansion I will have time to do more of X, and this will have an impact on Y.

5) Technical component of the sale


Are your CSMs domain experts or generalists? How much technical specialisation is required to upsell or cross-sell into your accounts?

Selling an additional few seats of your application to your existing customer is something a CSM and your customer can decide quickly. If you introduce another product line or add an advanced integration, however, the decision-making process becomes more complex. In this case, it’s likely that the customer will need much more technical specification on how the product will work, features etc.

Are your sales team better suited to this kind of transaction? In most companies I speak to they have some sort of sales engineer or solution specialist who handles the technical component of the sale. If your account expansion relies on selling technical products then the sales team are usually better suited to this type of work.

A happy medium could be to have the CSM team still manage the upsell but rely on the help of sales engineers / solution specialist as an “overlay” team to field some of the technical queries and requirements.

6) Systems and process

Do we have the systems and process in place to know who is communicating with our customers, what the history of selling looks like, when is a good / not so good time to sell to them?

As soon as you have more than one person communicating with a single account it becomes critical to have the systems in place to keep track of that. There’s nothing worse for the customer experience than feeling like the left hand isn’t talking to the right.

For example, if an otherwise healthy customer is in the middle of an escalation and is furious, that information needs to be visible somewhere so sales don’t start calling them with a new product they might be a fit for.

Other than customer experience, this kind of tracking also allows you to look objectively at how you're performing at selling to your customers and reduce any blame games that might occur between the two teams.

Here are some specific tips I would have if you are planning to move selling from your CSMs to your sales team.

- Set targets and expectations with your CSMs about how many opportunities or qualified leads they should be passing to the sales team and measure it

- Create the least effort solution for passing the leads to sales and creating alerts for the sales team - particularly important in big or remote teams

- Have a way for sales to accept/reject the leads and use that feedback to improve the handover / qualification process

- Ensure there’s visibility and an SLA in place about how the sales team will follow up with the lead

- Create some sort of “stop/go” system on your accounts so sales knows when and why not to call your customers

As you can see, this is a whole other topic that I might expand on in the future on the blog.

7) Compensation structure


How are your CSMs compensated currently?

If CSMs have been responsible for upselling it’s likely that they would have a variable component in their salary. If sales suddenly have responsibility for all selling then a huge portion of the CSMs compensation is now out of their control. When your targets or earnings seem out of your control that’s not good for motivation.

Another factor is the possibility of double compensation. If you keep your CSMs on variable compensation but have sales take the burden of this work then both may need to be paid commission on the upsell. This can be expensive in the long run.

I don’t have specific advice here as it varies so much company to company but even if you are a startup or just starting your CS team consider the long-term impact that your compensation model can have on decision making. Changing compensation structure is not trivial and highly emotional even in a small company.

8) Sales philosophy


Would you consider your sales team pushy and outbound or helpful and consultative?

Most of us would like to think that our sales reps are consultative and helpful all of the time but reality often forces us to focus on closing and being pushy in certain situations. If that’s the regular culture in your sales org, however, it can be very damaging to move upsell to that team.

Existing customers are far more aware and savvy about your business and expect a deeper consultative sale. If you don’t respect this and take that approach it can be very damaging to your brand and damage the ongoing relationship with your CSM team.

Investing in training, resources and a different sales process for upselling can help alleviate the risk if you do decide to make this change.

9) Account ownership

Who has ultimate control of the account?

In certain situations, you will need someone to have the final call with your customers or make a tough decision. Is that ownership going to live with your sales team or the CSM team?

Of course, I’m biased and believe the CSM or a customer success leader should be able to make the final call on any of these kinds of decisions. Including when and how the customer should be sold to. Decisions that solve for the long term instead of the short are more likely to be made by someone invested in the customer's success.

10) What value does your company place on customer success?

Finally, the most nuanced of all - where does customer success fit in the strategy and culture of your company? Is customer success viewed as a team sport as I've written about before?

In some companies, customer success is in the DNA business and in place since day one. In other companies, CS is seen as a “new initiative” or something that is not as important as new business and sales.

In the latter case, it can be risky to move selling away from your CSM team. In some companies, the ability for your CSM to drive revenue gives you a seat at the table. Without upsell or account expansion your customer success function could be viewed as a cost centre. While I would always disagree with this assessment there’s no denying that in tough times it could become a reality.

So, if you are deciding who should own account expansion in your company, these questions and considerations should help you come closer to that decision. My advice is to consider these factors plus any other factors relevant to you and weigh the pros/cons and effort involved in each one of them before making the final call.

What are your thoughts?

Topics: customer success

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