Let's take a vote: Should Customer Success have a 'veto right' on acquired customers? "Vetoing a customer" would mean the customer isn't considered in the overall renewal rate and the Sales person is denied their commission if they acquire a bad fit customer. If yes = respond with a 👍 If no = respond with a💡 (I know my friends in Sales will have something to say...) #CustomerSuccess #Sales
Sales/CS agree on the same use cases pre- and post-sale, should be no need for veto. Those can change of course at any time.
Quick answer is no. There are two categories of deals: Standard and Non-standard. Standard deals are ones that Sales has the authority to sign on its own. Non-standard deals are ones which, for whatever reason (either because the deal is too large, or requires development, or there's some other complexity) there needs to be a higher level of sign off. That escalation should be up to the COO, CEO, and/or Board. And it's their responsibility to consider the needs of the whole organization. So CS doesn't get a veto in either case.
Well said
JEFF SHEEHAN
2y
I’d say your sales VP needs to take the hit to their wallet and to then expect better guidance and leadership to managers and reps on qualifying the “right” customers. It’s a leadership issue, not a sales issue.
Some years ago (circa 2013), a large Boston-based company found itself with a very serious churn problem. After analysis, they arrived at the solution, which was to change the compensation scheme for Sales to reward retention. Six months later, they didn’t have a churn problem anymore. Am I in favor of Customer Success having veto authority over the sales pipeline? Yes. I’ve been asking about that exact authority in my ongoing research into the evolution of the profession for over ten years now. To quote a very senior CS executive who was asked in a CSA local meeting in early 2013 “Are you telling me that you have veto authority over the Sales pipeline?” She unhesitatingly replied “Yes. You couldn’t do this job without it. But you have to have the data to back up your decisions.” Who else but CS would have the data to make such a determination?
I hear you, but that veto right should occur before the acquisition occurs if possible. When you are talking about an existing customer, you've not only spent the sales cycle, but the implementation, onboarding, support and success teams have all cycled. The first year is the most expensive year. Continuous evaluation is always part of the process.
I'm not sure I believe in a such thing as a "bad fit customer." I think the problem is when we operate on averages, then there's a (made up) dividing line. We can learn something from every customer. Even if it's who NOT to sell to in the future. That's worth quite a lot to the business.
While I appreciate the problem you are trying to solve, CSMs should never be put in a place where they directly control another teammates’ earnings. Talk about setting up internal drama and hostility between groups. Also, CSMs are far too busy to vett every sales deal for fit. I would rather simply put a shared commission structure in place where sales is compensated on retention and CSAT of their signed customers and CSMs are compensated on new deals that they inherit. Now you’ve got teaming.
Cian Walker
2y
I’d like to drill a layer deeper into Rick’s (correct) observation here about incentivising the selling of any product to any customer. Where in turn does this come from? Unfortunately, most of us are in bondage to what is essentially a video game of equity valuation. Be it either a public share price or VC equity. This is where finance and commerce can in fact clash head on, and in such clashes, finance nearly always has more say (especially in publicly funded firms that exist almost wholly to benefit shareholders). In fact, what’s severely under discussed is the potential for the shareholder’s and the firm as an entity’s interests to become totally misaligned. Getting back to this issue more narrowly and how this dynamic effects it: to solve the problem you would need to either emancipate, or preferably promote existing revenue’s importance over net new, but in the current cultural climate of chasing certain kinds of revenue for the sake of financial reporting with the end of boosting equity in mind, and not with an emphasis on healthy commerce, this is unlikely to change. This problem runs root deep.
Senior Customer Success Consultant | Two-time Top 100 Customer Success Strategist | B2B SaaS and Services | Executive Coach - Leadership Development
2yChris, I can't give you a 👍 or 💡 so I'll give you a 🙌 (for collaboration and alignment). There are ways to solve for staying aligned through collaboration (ICP) and accountability (sales comp should have a retention metric). Together, those will keep sales reps invested in selling to the right accounts, already agreed to by a collaborative effort between Sales and CS to develop ICPs.