Regardless of the nature of your business, effectively responding to customer needs is the key to success. Yet to properly look after your clients and keep your organization afloat, Customer Success and Sales need to work closely together.
In today's piece, we're going to focus on Customer Success vs Sales. You'll learn about their similarities and differences, and see how these two functions can cooperate to ensure business growth.
Customer Success vs. Sales
Customer success (CS) is the effort and activities that a business undertakes to help customers understand the product's value and make the most of it.
CS reps are the first point of contact when users run into problems. Not only do they act as problem solvers, but also as educators who feel responsible for customer success (as indicated by the name).
Sales, on the other hand, relates to actions that result in the purchase of goods or services. The exact structure of a sales team is company-dependent. In most cases, it revolves around geographic areas, products/services, or target audiences.
Customer Success and Sales Similarities
Sales and Customer Success have a lot in common, so let's now take a look at some similarities.
They both interact with customers.
Both Sales and Customer Success interact with customers, however, at different stages of their journey.
The former connects with them early, even before they become clients. It's the sales team that tries to address customer pain points with the product they're offering to close the deal.
After the sale, Customer Success Managers take over trying to deliver on the promises made by the sales team.
They share key objectives.
To ensure business success, Sales and Customer Success must work toward the same goal and share the same objectives. Both seek to increase revenue for the company.
Sales' primary mission is to bring in more customers, while CS's role is to retain them and keep them happy. Both departments must closely cooperate and exchange insights to improve the company's products and services. Only then is consistent business growth possible.
They both focus on revenue generation.
Even though CS and Sales manage different stages of the customer journey, their actions both impact revenue generation. Sales focuses its efforts on closing deals, while CS strives for high customer satisfaction and retention – both of which translate into more profit.
Both departments can also engage in cross-selling and upselling. For example, let's assume that you sell two products: email automation and lead prospecting.
Your customer has great success with the automation tool but needs help growing lead volume. Both your sales or CS teams can persuade the user to buy the prospecting tool to further boost their outbound efforts.
While CS and sales have a lot in common, they're not exactly the same. Let's now see how they differ.
What makes customer success different?
Here are the biggest differences between Customer Success and Sales.
Customer success focuses on the post-sale relationship.
Do you know how runners pass each other the baton in a relay race? It's a good analogy for how Customer Success and Sales differ in focus.
Generally, Customer Success picks up where the sales team ends. That is after a lead becomes a customer. They make sure to onboard the customer properly and aim to keep them happy throughout the entire customer relationship.
Depending on the industry, this might include walking the client through new features, fixing their issues with other relevant teams, or sending over educational content. Anything to keep customer retention and satisfaction levels as high as can be.
Speaking of keeping customers happy and preventing churn, this brings us to customer success-specific metrics.
Important Customer Success Metrics
- Net Promoter Score (NPS)
- Customer Churn Rate
- Customer Effort Score (CES)
Net Promoter Score (NPS)
Net Promoter Score is one of the most popular benchmarks used to assess and boost customer loyalty. Among others, it sheds light on:
- How satisfied your customers are with your services and/or products,
- How likely they are to recommend your company to others,
- How loyal they've become towards your brand.
Customer success teams are the face and voice of the business. So, it's no wonder that they have a direct impact on NPS. In terms of customer success, the benefits of measuring it are two-fold:
- Customer success leaders and the C-suite can refer to the NPS to monitor the overall customer experience.
- Customer success teams can use them to evaluate the risk of customer churn. They can dive into the scores and any text responses from customers. Particularly those coming from disgruntled or indifferent ones. As a result, they can see how they can minimize the risk of attrition.
We mention this next.
Customer Churn Rate
Customer churn rate is a metric that informs you about how many customers have left your business during a specific time period.
You look at the number of churned customers and divide it by the number of existing ones. As a result, you receive your churn rate in percentages.
Some customer success teams use the churn rate to understand how much money the company has lost from each former customer. A low churn rate indicates more than an effective customer success department. It tells the business that they're delivering on their promises and helping customers get value from their services or product.
Respectively, high churn doesn't always mean a low-quality success team. It does, however, tell them that something isn't working for customers. It also sets them out on the path toward finding the issue.
Customer Effort Score (CES)
Customer Effort Score (CES) is another metric used in Customer Success. It's pretty straightforward, as it focuses on a single question: How easy it was for the customer to get the answers and requested solutions from the team?
Customer success teams usually ask a general question, like "Company X made it easy to handle my issue." Customers are then asked to give a rating, often between 1 to 5.
The higher the number the customer clicks on, the easier it was for them to get what they came for.
If a client provides a low score, then the customer success team looks into their past communication to see what went wrong and how they can prevent the issue in the future.
What makes sales different?
The nature of sales is very different from customer success. Even though they're both customer-facing, the former is more transactional, while the latter is more educational.
Sales focuses on conversion.
Sales revolve strongly around financial targets — conversion is their priority, while CS puts customer experience first.
As mentioned earlier, the sales team's role is to turn prospects into paying clients. Meanwhile, Customer Success is responsible for turning customers into brand ambassadors, or at least into loyal users.
Sales must ensure that they don't over promise during the sales process. It might be tempting to say "yes" to prospects' demands just to close the deal. But it won't be them who'll have to ensure their requests are met.
If Customer Success cannot deliver on these promises, high chances are the customer will churn.
Important Sales Metrics
- Customer Acquisition Cost (CAC)
- Monthly Recurring Revenue (MRR)
- Win Rate
Here are a few sales metrics to help you evaluate the effectiveness of your team.
1. Customer Acquisition Cost (CAC)
Customer Acquisition Cost tells you how much it costs your business to acquire new customers.
For example, by looking into your CAC, you might discover that clients from a specific sector churn before they're profitable. This means that their CAC is high, and you might consider dropping them from your ideal customer profile (ICP).
Properly managing your CAC will help you scale your business faster.
2. Monthly Recurring Revenue (MRR)
If you run a SaaS business, then this metric is particularly important to track. MRR is the total monthly revenue generated from all your subscriptions. It includes coupons, discounts, and add-ons, but excludes one-off payments.
MRR gives you a clear picture of your business performance and helps you better prepare for the future. If the MRR is high, it also acts as a great motivator for your sales team, as it might be a promise of a bonus.
3. Win Rate
A win rate is the percentage of deals closed in a given time. To calculate it you have to divide the number of won opportunities by the total number of opportunities within a specific time period.
Tracking your win rate helps you do two things:
- Verify your sales team's performance.
- Estimate how many leads you need to hit your sales targets.
How Sales and Customer Success Work Together
Both Sales and Customer Success want to see the business flourish. The more flawless their communication is, the more likely they are to boost growth.
After all, company growth requires both effective customer acquisition methods and a well-thought-out customer retention strategy.
Both teams can support each other by providing context. Let's take the customer handoff process, for one.
The sales representative who closed the deal should pass on all the information they have on the client. Who they are, what challenges they're facing, and what value they want to get from the new product and service.
With these insights, the CS team can step in confidently and make sure they meet the promises. This, in turn, minimizes the risk of churn and helps boost loyalty.
Customer success can also help grow the customer base by helping out with upselling/cross-selling.
Say there's an upsell opportunity on one of the accounts. CS can provide the sales team member with past communication history and CES scores. They can also tell them why the client started considering the more expensive option in the first place.
The more information they get, the easier it's going to be for sales to close the deal. A win-win for all!
Pro tip: Customer Relationship software, like , makes the handoff process easy. By automatically updating customer records, a CRM ensures your Sales and Success teams are always up to date with contact notes, purchase history, and more.
Great Customer Success and Sales — The Secret to Company Success
Customer Success and Sales are two teams that — due to the nature of their work — have the most interactions with clients. How they execute their tasks is vital to high profitability.
Making sure that your CS and sales departments work in sync pays off. Get it right, and you'll be likely to see a steady customer retention and acquisition rate.