Customer Success or Sales – Who Owns Renewals and Upsells

Customer Success vs. Sales Team

While it is easy to think that they work in silos, both the customer success and sales teams have quite a few overlaps in their day-to-day activities. What binds them together is their ability to nurture relationships with their customers. 

Each team, however, has a different approach for their customer relationships, complete with unique goals, focal points, and metrics to measure their success. 

So how do we decide who takes up the new opportunities? It seems apparent that the onus should lie with the sales team to get the customer to sign the deal. 

But what about existing customers? 

Considering that the customer success team is at the forefront of optimizing the buyer’s journey, they should take charge in cases where customers want to renew. 

The question to ponder over is this– who should take charge of contract renewals and maximizing value for the existing customers and who should own responsibility for the upsell process? 

Before jumping into the debate, let’s look at what these two areas are:

  • Contract Renewal is the last stage of a customer’s lifecycle. When the lifecycle comes to an end, parties involved may decide to continue with the business relationship. They might either continue with the terms of the old contract or negotiate new terms in the renewal process. A report by the Aberdeen Group highlights that organizations that are considered the “best-in-class” have 56% of their contracts renewed every year.
  • Upselling is the process of encouraging customers to upgrade or include add-ons to the product or service they are purchasing from you. Similar to cross-selling, the upsell process occurs in the part of the buyer’s journey when they have added something to their cart.

So How Do We Decide?

There are three scenarios that come into play when we look into the management of existing customers in order to drive further value. These include:

  • Sales-driven Approach: In this scenario, sales executives drive all commercial activities. Customer success managers, on the other hand, will engage in non-commercial activities. 
  • Split Between Upsells and Renewals: In this, your sales reps drive revenue activities that include upsells and cross-sells while your Customer Success Managers (CSMs) are entrusted with the management of existing commercial activities along with non-commercial activities.
  • CSM-driven Approach: Here, it is the Customer Success team that manages all commercial activities, including both renewals and upsells. Sales executives are charged with driving sales for only new customers.

Each of these scenarios has its own set of pros and cons. 

Businesses and expanding ventures should take their time to carefully evaluate which set-up works for them and then make a decision. 

Should the Customer Success Team Own the Process?

You hired your CSMs with one goal in mind- they become a trusted advisor to your customers. 

And they do this by working consistently on building and maintaining the relationship, ensuring that your product or service provides value to your customers and helps them to reach their goals. 

Your customers understand how the CSM is on their side and wants what is best for them. 

This built-in trust makes it easier for your managers to handle the renewal process as well as sales upselling. This is because they now have the relevant information to pitch accordingly. 

Additionally, they don’t have to re-introduce themselves to other people inside the company, making it easier for your customers to sign the deal and maximize returns.

But there is a downside to this too. 

Becoming a trusted advisor to your customer takes a good amount of time and effort. And the pressure keeps rising up as more and more customers sign up for your product. 

The added workload can have a drastic impact on the quality of the relationships being forged.

This can be disastrous for any organization. If the deal goes wrong or if the customer is not satisfied, they will not trust the CSM. The loss of critical communication lines would mean a decrease in both the renewal and the upsell process.

Should the Sales Team Own the Process?

The sales team’s skill and expertise plays a more strategic role than having a familiarity with customers when it comes to upsells and renewals. 

According to a study, sales skills take somewhere between 9 – 15 months to develop. This means that you have a highly specialized team at your disposal. 

Another benefit is the prioritization they will give to the upselling process. For your CSMs, upselling is a smaller element of their larger role and responsibilities. 

On the other hand, when customers are contacted by sales reps, they know they will be asked about spending more money. 

The dynamics would immediately change. Rather than trusting your executive, your customer will be on the defensive side. 

What Does the Customer Want?

Improve customer experience

It makes sense to align your organizational structure to the roles and responsibilities of the people with the goal of satisfying your customer’s needs. 

Customers want the maximum value from the product or service they have signed up for. They want to use the product easily and be assured that it fits their unique needs. And when these expectations are met, they feel more valued.

Only 25% of respondents are likely to stay with a brand if they don’t feel valued. 

Similar factors hold true when we talk about the upselling process. 

Your upsells won’t take up if you are not understanding your customer’s pain points, needs, and preferences. They want to be heard. 

At times, your customers will directly contact your sales reps to inquire and know more about specific features of the product. 

This is the exact information that you can use to your advantage and provide personalized experiences.

Making Way for a Hybrid Approach

An easy solution is to let your CSMs focus on success while your sales team handles all of the sales aspects. 

The best scenario, however, is to allow your Sales and CS teams to work together on existing customers. 

For instance, your sales team who are working hard to push a sales forward can benefit from the expertise brought in by your CSMs in making the process more human. 

Since your CSMs handle what your customers’ expectations are, it can prove to be a handy tool for the sales team to leverage. 

From contract renewals to upselling, your CSMs can act as advisors as your sales team closes the pitch.

But such successful partnerships are easier to install when your teams are smaller. 

So what happens when these departments grow? How do you keep track of their responsibilities when both the teams share the collective goal of revenue generation?

One way to ensure that there is no friction is to strengthen who is responsible for renewals and who takes care of upselling. 

Hosting joint quarterly business reviews can help the teams look into the unity in account strategy and bring in further transparency. 

You can make way for the “we win together, we lose together” mindset. 

Celebrate the wins and include the teams that made it possible. 

Such recognitions go a long way in infusing trust, respect, and appreciation among team members. 

Similarly, when teams share collective responsibility for a loss, it helps them to feel safe psychologically. It is crucial to remember that when teams are not competing for the spotlight, they are working together for the customer.

Adopting the Solution that Fits the Best

What is Customer Success

Analyze your product set, sales complexity, and team experience before adopting a model that is tailor-made for your business growth. 

For both customer success upsells and renewals, remember to simplify the experience for your customers while clearly defining the roles and responsibilities of the teams involved. 

When both teams are aligned, you have a winning combination. 

They are well-poised to smash targets together, turn stakeholders into brand advocates, and learn from their mistakes, which can pave the way for a more defined future strategy.

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