Who should own the renewal?

Read Time: 7 minutes

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I’m launching a brand new GTM Operations course focused exclusively on Customer Success Operations! Over the next couple of newsletters you’ll probably see quite a bit of CS related content since that’s been top of mind for me recently. In this newsletter we’re going to talk about who should own the renewal. So let’s get started!

Customer Success organizations who successfully combine positive customer-facing initiatives with streamlined internal operations set themselves apart by boosting customer satisfaction. In customer-centric organizations, everyone takes ownership of preventing churn. But when everyone is responsible for the retention rate, who is ultimately accountable for renewals? It seems to be a catchy thing to say that it’s everyone’s job. But really…

Who should own the renewal?

In the SaaS world ownership over the renewal can be a contentious issue. Is it the account executive? Or is it the account manager? Or is it a customer success manager? There’s no right answer that fits for every business but the best strategy for your own business may fall under one of the following scenarios:

1. Customer Success Managers not only shepherd customers to achieve their goals but also own renewals

2. Account managers focus on the account relationship but with key metric of driving revenue for the business

3. Sales representatives may also own renewals in addition to their new business responsibilities

4. Renewal managers manages a much larger ratio of customers with a complete dedication to the renewal; transactional volume based business models may use this

Often times many GTM leaders can confuse the AM and the CSM. Here’s a table to help clearly identify the difference between the two.

So, which role and ownership structure works best?

First, let's acknowledge that great CSMs are not always great salespeople. That's fine!

The fundamental difference between a traditional account manager (AM) and a modern customer success manager (CSM) is that the former focuses on managing the account commercially, while the latter focuses on driving customer outcomes. This distinction is important because it results in two very different customer experiences.

Traditional Account Managers

Traditional AMs are typically focused on acquiring new customers and growing revenue. They may use a variety of methods to achieve these goals, such as cold calling, email marketing, and attending trade shows. Once a customer has been acquired, the AM's focus shifts to retaining them. This may involve providing customer support, upselling or cross-selling additional products or services, and resolving any issues that the customer may have.

Modern Customer Success Managers

Modern CSMs are focused on helping customers achieve their goals. This may involve understanding the customer's business, identifying their pain points, and recommending solutions that can help them improve their bottom line. CSMs may also provide training and support to help customers get the most out of the products or services they have purchased.

The Different Customer Experiences

The different approaches of AMs and CSMs result in two very different customer experiences. AMs may focus on providing discounts or other incentives to keep customers from churning, while CSMs may focus on understanding the customer's needs and working with them to find a solution that meets those needs. This can lead to a more positive and long-lasting customer relationship.

For example, let's say a customer is considering canceling their subscription to a software product. The AM might offer the customer a discount or other incentive to stay, while the CSM might ask the customer why they are considering canceling and work with them to find a solution that meets their needs. The CSM might suggest that the customer upgrade to a more expensive plan that includes additional features, or they might suggest that the customer hire a consultant to help them get more out of the product.

By understanding the customer's needs and working with them to find a solution, the CSM can create a more positive and long-lasting customer relationship. This can lead to increased customer satisfaction, decreased churn, and increased revenue.

For paid subscribers I propose a specific decision tree which you can use to debate with your leadership team which direction you should go. Also, next week I’d like to dive into a compensation plan structure for those responsible for net revenue retention.

If you’re subscribed, let’s go into the tree in detail.