Should Customer Success Managers own Renewals is the Wrong Question
If you were to ask me if customer success should own renewals I would respond “yes” every time. A core component of the customer success function is to renew clients so it only makes sense that CS owns the renewal process. In addition, customer success’ main role is to focus on the customer’s outcomes so they should have a more trusted relationship and be in a better position to own renewals.
The confusion that I typically see is that the debate centers around if the customer success manager should own the renewal. Customer success managers don’t equal customer success. A customer success team can have many roles which include customer success managers, technical account managers and renewal managers. This is why I believe that customer success should always own renewals but not the necessarily the CSM. Either the customer success manager should be able to do this or you can create a renewals manager role. Ultimately this should sit within the customer success team. Owning a part of the revenue pie is important if customer success wants a seat at the executive table.
Here are some other things to consider as you are deciding who should own renewals:
Don’t feel you need to make immediate changes to who owns renewals. There may be several factors at play that you need to untangle if you are a new CS leader. These include: how sales are compensated, how customer revenue is measured as part of company metrics, the skillset of your CS team, your ability to hire and the workload of the CS team. What worked in one organization may not work in another. It’s best to understand the current situation and understand what would work best for your customers. You can then propose changes and create a plan to put those changes into reality. As Gainsight rightfully says in their post on this topic “Culture Eats Strategy Every Day”.
Treat segments differently. The structure and processes you put in place for renewals can differ across segments. You may want CSMs to own renewals in one segment but split up renewals and typical CSM responsibilities in another. It’s best to understand how many renewal transactions there are per quarter per segment and how much effort is involved per customer for renewals. You need to weigh this against what you want the CSM to be responsible for and what experience the customer is expecting.
Consider breaking up renewal and upsell/cross-sell responsibilities between Sales and CS (depending on how you define these). Upsell/cross-sells may be better suited for Sales (or a dedicated upsell role within CS) based on the complexity of the upsell and the time required. You need to ensure that you have clearly defined roles and responsibilities so you don’t have internal and external confusion.
Be mindful of having too many cooks in the kitchen. I’ve seen organizations with CSMs, renewal managers and upsell specialists. This can be super confusing for the client and for the internal teams. Be sure to try and have one person that has overall responsibility for the client and that can best determine how to orchestrate the various resources. As an example, it may not make sense to seek an upsell if the client is struggling to meet some of their basic reasons for purchasing your product. You can use simple transactional surveys to get feedback from your customers after renewals and other transactions so you can make improvements.
If possible, I would prefer that CSMs own renewals in the higher revenue segments as they tend to have a trusted relationship with the client. In addition, if they are following the right processes the renewal should be a non-event. They may need help managing the renewal negotiation at times but this can be accommodated with assistance from a manager or possibly another more sales focused role. Upsells and cross-sells should involve a different role as this typically requires a different skill set and can be very time consuming. This role may or may not be within CS. Renewals should be handled by a renewals manager for clients with a lower average contract value as there are typically many more transactions.
There definitely aren’t cut and dry answers here and you should do what works best for your organization. Be sure to keep evaluating your current structure and don’t be afraid to experiment with different approaches.
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