New logo sales, upsell/cross sell expansion and renewals revenue is typically owned in the go-to-market organization and there are several ways to structure this.
In product-led organizations, self-service revenue channels for new logo, expansion and renewals is usually jointly owned by marketing & product. This article excludes self-service revenue channels.
Either sales and customer success can be successful in owning expansion and renewal revenue. There isn't a right or wrong way to approach this, it comes down to picking an approach and executing it well. The following provides considerations and context on different models as you think through structuring revenue ownership inside your organization.
| How It Works | Sales lands new logo deals. Sales continue to own the account for all revenue (expansion and renewal). Customer success is responsible for onboarding, adoption, and engagement. |
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| Measurement | Sales is measured on revenue and retention. Customer success is measured on customer usage, and possibly customer retention. |
| Org Design & Leadership | You’ll want a revenue leader, not a sales leader. Someone with the experience to own not just new logo acquisition but also ongoing customer relationships. Two ways to structure this within the sales organization. |
| • One team focuses only on landing new logos, and a separate relationship management team focuses on expansion and renewal. Hire hunters and farmers. | |
| • Or, new logos can be held by the original sales rep for expansion and renewal. Hire sales reps who have experience hunting & farming. | |
| If you structure it so the salesperson who lands the deal also expands and renews it, adjust the sales model and compensation plan to ensure your team doesn't lose sight of landing new logo deals as well. | |
| Works Well When | You need to build deep, enduring relationships with very large, complex accounts, and specialization of customer-facing roles will help you manage large, complex accounts at scale. |
| What to Know | Requires significant coordination & collaboration across sales and customer success to ensure people interacting with the account don't step on each other, cross-wires with communication, and confuse the customer. With customer success as the day-to-day contact, sales may have to get up to speed on the account when it is time to expand or renew, making a less fluid relationship with the customer. |
| Other Considerations | Customer success can exclusively focus on onboarding and engagement, creating 'trusted advisor' relationships with their customers that are not based on a financial transaction. |
| Be thoughtful about designing the experience so customers don’t feel they are being bounced around multiple contacts (sales rep, relationship manager, and customer success manager). This model can work well because of specialization, but the downside is that it isn't always a fantastic customer experience and customers may not be clear about who their primary contact is. |
| How It Works | Sales lands new logo deals and customer success takes over from there. Customer success owns all expansion and renewal revenue. |
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| Measurement | Sales is measured on new logo revenue. Customer success is measured on expansion, renewal, retention. |
| Org Design & Leadership | Sales and customer success leaders should ultimately have the same reporting line into an executive with overall go-to-market responsibility. Hire customer success managers who are comfortable owning a number. Consider role segmentation within customer success to manage small, medium, and high growth potential customers. Hiring profile may be different for those three segments of customers. |
| Works Well When | Works well across a wide range of customer types from small businesses to large enterprises. Can be a great customer experience with a single point of contact who knows them well, and less bouncing around to multiple people & departments within your organization. |
| What to Avoid | Avoid hiring customer success managers & leaders who haven’t owned a revenue number. You need to build a customer success team that is capable of owning a number from day one as it can be difficult to transform a relationship-focused CS team into a revenue-focused CS team. Owning revenue needs to be built into the DNA of customer success, from ideal candidate profiles to onboarding & training, tools, processes, compensation, and performance management. |
| Other Considerations | Straightforward org design & provides a very clear line of ownership and accountability post-sale. |
| How It Works | Sales own certain types of customer expansion and renewal revenue, while customer success owns others. For example, customer success owns organic, product-led expansion and sales own top-down sales-led expansion. |
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| Measurement | Each team is measured based on what they are responsible for. Usually, sales measured on new logo and expansion revenue while customer success is measured on gross & net retention. |
| Org Design & Leadership | Sales and customer success leaders should ultimately have the same reporting line into an executive with overall go-to-market responsibility who can design a collaborative culture & incentive plan that minimizes competition and rewards overall growth. |
| Works Well When | Great for small, lean teams. Works well in product-led organizations where incoming demand is high and expansion happens organically. Works well with a straightforward path to purchase. |
| What to Avoid | Avoid comp plans that create competition across sales & customer success. Reward collaboration and communication. Also avoid management by exceptions. Create clear rules of engagement for each team and ensure they are followed in all situations. |
| Other Considerations | The hybrid approach often looks good in theory but can be hard to implement and manage. Requires crisp & clear rules of engagement so that each function understands who owns what. |