Having a customer success pipeline does not mean CS becomes sales. This is a concept CS executives and leaders should consider when planning to increase the impact they have on revenue.
Pipeline management is an effective process for driving growth and revenue, but it does not mean that CSMs are expected to take on a sales role. Instead, they identify and qualify potential opportunities and hand them over to the sales team for finalization.
Let’s start with the question: why should CSM have a pipeline?
It creates structure in a sensitive and sometimes complicated process. 📝
CSMs are better positioned to prioritize their effort and focus on the high probability opportunities. 🔍
CS commercial impact has more visibility in the organization. 💥
The main aspects of building and maintaining a pipeline:
✔️ Identification
✔️ Estimation
✔️ Qualification
✔️ Handover to Sales
The above can be performed in parallel and not necessarily follow each other.
Identification
The 'identification' stage results from CSMs' continuous engagement with customers. It's built upon your understanding of the customer’s environment, analyzing their needs, the impact of your product, and relationships with stakeholders. CSMs can identify these opportunities below the “sales radar,” as they may naturally come from data analysis, meetings, and informal discussions.
The identification stage may take longer if you expand your solution to new business units and stakeholders. It is virtually a new sales cycle with one notable difference – this time, an internal champion serves as your “door opener” and attests to your business value.
Sales and pre-sales might be involved at this stage. We will meet them later in this article.
Estimation
Can you scope and size the new opportunity?
The intuitive answer is, “It depends.” However, few cases are straightforward to handle.
Examples:
💰 Additional users/subscribers
💰 Additional traffic (APIs, events, or other measurable metrics on which subscription is based)
💰 Moving from one service tier to a more advanced tier
💰 Additional module (out-of-the-box)
As a follow-up step to identifying an opportunity, CSMs should be able to confidently translate the above scenario to a commercial value that both the sales team and the customer can easily understand.
Sometimes, this stage becomes complicated, and pre-sales/ solution engineering is involved for proper sizing and estimations.
Examples:
📌 Analysis of new use case which is not supported out-of-the-box
📌 Deployment will require additional integrations (usually in enterprise environments)
📌 Product feature/s will be needed to cover existing functional/non-functional gaps.
📌 Significant professional services effort is expected as part of the deployment.
Qualification
The 'qualification' stage is critical to the pipeline management process. Not only does the sales team qualify the opportunities, but CSMs can also do the same. This is where CS can help promote the opportunity internally in their organization, ensuring that it aligns with the use case and outcome the product/service can deliver.
There are four main criteria to take into consideration:
1. Match to use case and outcome the product/service can deliver.
As part of the identification and estimation, CSM should evaluate the feasibility of meeting the customer expectations and delivering a successful outcome.
2. Stakeholders’ sponsorship – no opportunity is “hanging in the air.” Having an interested sponsor in expanding and extending the usage of your product is mandatory. The other delicate aspect is whether the stakeholder is senior and influential in securing the budget, which leads us to the next point.
3. Budget is the most challenging criterion; in most cases, we don’t have sufficient visibility (even if we have a great relationship with the sponsor). Having a budget in place usually speeds up the sales process and will attract the attention of your sales counterparts.
The questions I ask to clarify the budget complexities of an opportunity:
❔“Is there a budget to cover the additional scope within the existing engagement?”
❔“Can you secure the budget, or will additional stakeholders be expected to sign it off?”
Clarifying the budget approval process and the time it takes to complete it is another input to the next step below.
4. Timelines—In this part, the CSM assesses the urgency and relates it to the customer prioritization process. Then, timelines become the next challenge. Even if a perfect match to the use case and a supportive sponsor are in place, you may face a prolonged budget approval process.
Other than securing the funds, vendors face additional consideration. Organizations have road map plans, dev and deployment cycles, resource constraints, and many other factors beyond the CSMs or sales control. Then, a very “hot” opportunity can “cool” down quickly when it is expected to finalize in two or three quarters. The “secret” is to help the stakeholders balance all constraints and mutually agree on the right timing to implement the additional scope.
I am confident that experienced and commercially savvy CSMs can perform their pipeline qualification based on the above without negotiating pricing or dealing with procurement and legal teams.
Handover to Sales
This time, CS passes the baton to the sales team instead of the standard handover of a new customer between the teams. This is a notable cycle closure for all teams involved.
There is no one point in time when CSM “handover to sales.” Ideally, identification, estimation, and qualifications are simple and handed over to sales to finalize the commercials. In many other cases, opportunities take time to mature, and the sales team will be notified and aware of the scope and winning probability. Proper team communication and alignment are crucial, considering the customer's relationship and the anticipated closure date.
Bottom line - Sales will appreciate your efforts to “bake this tasty cake,” and they only need to ensure it will not burn in the oven.
Tips
💡 Not all CSMs feel comfortable with assessing and qualifying opportunities. Internal training based on “Won” or “lost” opportunities will align the team on the process in the context of the specific product and the target customer segment.
💡 CS leaders can join the Sales pipeline review to provide updates and align on the next steps.
💡 Consider having a CS pipeline in your CRM tool to keep “one source of truth.”
💡 Partner with the Sales and Business operations to ensure the CS pipeline is managed and has the appropriate visibility.
CS's focus on value is somehow a “comfort zone,” positioning the team as a cost center. Actively identifying and qualifying opportunities is part of CSM's professional growth. In addition, it improves the partnership with the sales team and increases the chances of upsells and cross-sales. Moreover, the CS pipeline management increases visibility (and attention) to the vital contribution CSMs make to revenue growth and the organization’s top line.
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