The Battle Lines Have Been Drawn - Customer Renewals & Expansion

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Our guest blogger this week joins us from Australia. Gary Rubinstein is a customer success leader who shares his perspective on who owns revenue - one of the hot topics in our field right now. Enjoy!

By Gary Rubinstein

Ownership of customer expansion and renewals is often the “elephant in the room” – especially in a Start Up environment. The flow on impact from this decision drives behaviors across the entire organization: from Sales to Customer Success, Marketing to Product. Everyone is impacted.  

And this is an important business decision because if our SaaS customers don’t renew, we won’t have a SaaS business for very long. And growth through customer expansion is easier than finding new customers.

The Players

First we have the Sales / Account Executive (AE) team. This team works hard to identify and close new business. It is typical for an AE to start “hunting” for their next deal once they close a deal.  But there are also times when AEs want to stay close to their customers.

In the world of SaaS, we also have the Customer Success team. The Customer Success Manager (CSM) is focused on helping customers get the most value out of their software investment. They focus on customer retention, account expansion/growth, and the overall customer experience. But there are times when CSMs wish they didn’t have to deal with some customers.

5 Considerations in deciding Who Owns Customer Renewals / Expansion

#1 – Maturity of the Business

Teams are small in early stage software companies. Most employees are performing multiple roles while the business is growing.

In the early days, most CSMs are consumed with the customer onboarding and adoption initiatives. While AEs continue to monitor progress and hand-hold accounts to ensure they have a happy and referenceable customer.

I would encourage any new SaaS business to be honest with themselves – with small teams and a small customer base, it just makes sense for AEs to own all contract discussions (including renewals). This will allow CSMs to focus on adoption and value creation.

#2 – Ideal Customer Profile

Do you know what your ideal customer looks like? And more importantly, are your AEs selling to them? If you answer “no” to either of these questions, then AEs should own (and be accountable for) the renewal.

CSMs don’t want to be held accountable for a churn event with a customer who should never have been sold to in the first place.  

Defining the ideal customer profile is a whole of business exercise. And one worth investing in. Because once you understand what your ideal customer looks like, it will help focus sales and marketing efforts, leading to more stable longer term growth. And fewer churn events.

#3 – Initial Contract Length & Time to Value

Imagine this scenario – a 12 month customer contract, a 3 month onboarding period and a renewal discussion commencing 3 months prior to the contract end date.  

All customers want to see value from their software investment. But most customers won’t be able to realize the value within 6 months. It will typically take 9 months to start seeing the benefits.

So if I was the customer in this scenario and I was asked at the 9 month mark “would I renew”, I would not be happy. And I would probably say no.

In this scenario, it is important to “divide and conquer” to not confuse the customer. CSMs should continue to focus on adoption and value creation. AEs should own contract discussions, including the initial renewal. This will also give the AE time to realize any early identified expansion opportunities (refer #5 below). Beyond the first renewal, CSMs should own all customer interactions.

#4 –Variable Plans

As humans, we are motivated by incentives. For AEs this is commission on sales. CSMs typically have bonuses based on defined metrics.

But what if an AE sells to someone who doesn’t fit the “ideal customer profile,” the CSM owns the renewal but it is clear from the outset that they customer is not likely to continue beyond the initial contract. Does the AE still get their commission? Should the CSM’s churn numbers be “adjusted” when this churn event is realized? Who takes accountability for this?

Variable plans need to be setup so that everyone is accountable for customer renewals. This might be, as per #3, that initial renewal is still owned by the AE. Or it might be that you “double dip” on the initial renewal to recognize the efforts of both the AE and CSM. There are many creative ways to tackle this.

But one thing is clear, if you don’t consider the impact your variable plan has on renewals – your customers may not renew.

#5 – When an Expansion IS NOT an Expansion?

Here is the scenario – the CSM owns and is incentivized for all renewal and expansion activity from Day 1. But the AE says “I’m expecting this customer to buy more in 3 months – they just don’t have the budget approved yet.” Is this expansion the AE’s or the CSM’s or do they both get recognized?

I have seen this scenario play out many times. And there is no perfect answer. From a business perspective – account growth is great. But it is bad for business if AEs stall an initial deal because they are hoping for the larger commission check. It is possible, even likely, that by waiting the AE loses the whole deal. On the other hand, is it fair to give the CSM a “free ride” on this expansion? On the other hand (if I had a third hand), should the incentive rules flex in this scenario?

Final thoughts

I come from a Customer Success background and have always focused on being a “Trusted Advisor” in the eyes of the customer. This helps build confidence and enables the customer to be open and honest in all interactions. This could not be achieved if customer felt that CS was sales by another name.

While CSMs need to be accountable for customer retention and expansion, the timing of this ownership needs to be addressed by all SaaS businesses.

Do you have any stories to share on customer ownership?

Are you a new CSM or do you want to improve upon your CSM skills this Spring? The Success League is a customer success consulting firm that offers online training and workshops on core CS topics like Renewals & Churn and Customer Goals & OutcomesFor more information on these and our other classes and workshops, please visit

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Gary Rubinstein - Gary believes that every business should get as much value as possible out of their software investments. And it is with this philosophy that he moved from a successful career in Business Analysis and Project Management to Customer Success. By drawing on his business experience, Gary helps optimize customer processes to achieve increased value from software in a digital world.
Gary has helped establish multiple Customer Success teams; ensuring that value is recognized throughout the Customer Journey. He completed his Bachelors of Commerce Degree at Monash University, Australia and MBA at Swinburne University, Australia. In his "spare time" Gary and his wife are often playing parent taxi, shuttling their 2 boys from one activity to another.