Customer success teams have
What do customer success teams do?
Customer success teams are responsible for all of the activities that help customers get value from a product or service. This includes onboarding new customers, training and educating customers on how to use the product, and helping get technical support for customers. At a more strategic level, this can also include account planning, creating strategies to help customers get more out of the product or service, and finding cross-sell opportunities. Customer success plays an important role on go-to-market teams and can have a strong impact on company metrics such as churn, expansion revenue, net revenue retention, customer lifetime value, and more.
How do Customer Success Managers (CSMs) Impact Revenue?
Given how involved CSMs are with customers, it makes sense that they can impact revenue retention and growth among existing customers and even new customers.
Retention and Renewal
One of the most direct ways CSMs impact revenue is by ensuring customer retention and renewal of subscription or service contracts. CSMs work closely with customers to understand their needs, address issues, and help them achieve their desired outcomes. By ensuring customers are satisfied and seeing value from your product or service, CSMs can increase the likelihood of contract renewals, preventing revenue loss.
CSMs are well-positioned to identify upsell and cross-sell opportunities. They can identify areas where customers can benefit from additional products, services, or features, leading to increased revenue through expansion within existing accounts.
Referrals and Advocacy
Satisfied customers can become advocates for your business. CSMs can nurture these relationships and encourage customers to refer new clients or provide testimonials and case studies that can help attract new customers. Word-of-mouth referrals can be a powerful driver of revenue growth.
CSMs serve as a valuable feedback channel from customers to the product development and sales teams. They can provide insights into customer needs, pain points, and feature requests. This feedback can inform product improvements and help the sales team better target potential customers, ultimately driving revenue growth.
CSMs can identify early warning signs of potential churn and take proactive steps to address issues. By preventing customer churn, businesses retain the revenue they would otherwise lose if customers were to cancel their subscriptions or contracts.
Customer Health Monitoring
CSMs often use customer health scores or other metrics to assess the overall satisfaction and engagement of customers. By monitoring customer health and taking action to improve it, CSMs can ensure that customers continue to derive value from your offering, leading to longer-term revenue.
Customer Education and Onboarding
Effective onboarding and ongoing customer education can help customers fully utilize your product or service. CSMs play a role in guiding customers through this process, ensuring they get the most out of their purchase and are less likely to churn due to underutilization.
CSMs can analyze customer data and usage patterns to identify trends and opportunities. By leveraging data, they can make data-driven decisions that lead to revenue growth strategies, such as personalized recommendations or targeted marketing efforts.
Strategic Account Management
CSMs often manage key strategic accounts, which can contribute significantly to a company's revenue. They develop long-term relationships, understand the unique needs of these accounts, and work on tailored solutions that drive growth within these important client relationships.
With all of these activities in mind, compensating CSMs effectively is an important step in setting them up for success. Our guide to the different types of CSM compensation structures can help you find the right approach for your business.