Aligning the Sales Process and the Customer Success Process

One of the most common pitfalls in the SaaS Customer Journey is the transition between sales and customer success. A customer first starts to become acquainted with your company and your product through your marketing channels. The customer decides to learn more and begins working with an account executive. The account executive helps the customer through the decision making process to arrive at a purchasing decision. All along the way the account executive is educating the customer, overcoming objections, and building a relationship.

Then the customer closes. The account executive gets commissioned, and moves onto their other prospects. At this stage it’s easy for post-close activities to fall through the cracks, and it makes sense. The account executive is typically being compensated on brining in new business, not on the onboarding or customer success experience. Hard incentives produce hard behavior. The account executive is engaged until the close, and then they move on.

Don’t incentivize a poor handoff

You can’t blame the account executive for this behavior. They are just doing what they are paid to do. You can’t expect meetings and trainings on the importance of onboarding to change the motivation that comes from commissions and hitting quota.

I’ve seen a few different examples of this. One SaaS company I worked with highly promoted the importance of selling and implementation package to new customers. It came up at least once or twice a month. The churn data clearly indicated that a successful implementation had a strong correlation with retention. The sales manager, implementation manager, and event the CEO came and spoke with the sales team about the importance of the the implementation package. But here was the deal: the account executives didn’t receive commission on the implementation packages that they sold. They were only compensated on new ARR. With no hard incentive to sell the implementation package, the account executives continued to sell new deals without implementation.

Another company actually incentivized reps to not hand off new customers to the customer success team. The account executives were compensated on new incremental ARR that they actively cultivated during the sales process. If the account upgraded based on interactions with the customer success manager, then the account executive didn’t receive commission. Consequently, the commission structure resulted in account executives holding onto accounts if they felt that the account had opportunity to grow shortly after close.

These were unintended consequences that probably would have only surfaced after implementing the commission structure. The proper action in either of these situations is to adjust the commission structure to align more with customer success.

Spread compensation across the customer success process

Spreading the account executive compensation across the customer success process better aligns the account executive to invest time in producing long-term growth and retention. For example, account executive could be commissioned in two parts, first when the deal closes and second when the onboarding is completed. You could also commission the account executive based on the type of account that is sold. If leading indicators show that the customer would be a great fit, the rep receives a higher commission than if the indicators show the customer to be a poor fit. If you are using a per licenses model prone to post-sale growth, you can compensate your account executives based on upgrades post-sale for 3 to 6 months. This would incentivize account executives to successfully hand off accounts to customer success to drive more growth post-sale.

In the example with the account executives not pushing the implementation package, the company could actually compensate the reps on the dollar value of the implementations being sold. If the implementation has such a large impact on the retention of the customer, then the company should be able to assign a customer-lifetime value to the implementation and compensate the account executive accordingly.

It goes both ways

Just as incentives can can help/hinder the sales work better with customer success, poor customer success incentives can drive customer success to be counterproductive to sales. Be careful that incentives for both sales and customer success are aimed to drive value to the customer.

I’d love to hear your thoughts on what you’ve seen work- thanks for reading.