The Heavy CS Burden: Why Retention & Expansion Is A Team Sport

It’s time to broaden our view of what affects NRR and adjust our expectations of who should be accountable for it. By spreading the responsibility across the organization and aligning roles more closely with the ability to influence customer outcomes, companies can create a more balanced, responsive, and ultimately more successful business model. NRR isn’t just a CS metric; it’s a company-wide mission that every team member should contribute to.

Eli Portnoy, Co-Founder and CEO of BackEngine

6/21/20242 min read

Net Revenue Retention (NRR) is often hailed as the beacon guiding B2B business success, revealing not just customer loyalty but also business growth. Yet, in many organizations, the responsibility for renewal and expansion is disproportionately heaped upon Customer Success (CS) teams. This sets up a curious paradox: while most leaders acknowledge that product quality, marketing, pricing, and other factors are critical to customer retention and expansion, CS leaders are often still the ones held accountable for retention and even expansion. Let’s explore why this imbalance exists and how correcting it can lead to more sustainable business practices.

The NRR Accountability Paradox:

In theory, everyone agrees: a multitude of factors contribute to whether customers stay and whether they expand their business. Quality and fit of the product, effectiveness of marketing, competitive pricing—these elements are fundamental. Yet, when it comes to NRR—a metric deeply influenced by these factors—it’s the CS leaders who are often scrutinized for fluctuations. This misalignment not only puts undue pressure on CS teams but also masks deeper organizational needs.

Why NRR Shouldn't Fall on CS Alone:

Customer Success is pivotal; they are the bridge between a customer and the company post-sale. However, their influence is primarily reactive. They can champion customer needs, provide support, and encourage renewals and upsells, but they cannot single-handedly improve the product or alter pricing strategies. Holding them accountable for NRR without significant influence over these critical areas is akin to judging a gardener on the health of a plant without giving them control over sunlight or water.

Redefining Roles:

True leadership understands that to drive NRR effectively, the role of each department must be aligned with the outcomes they can realistically influence. For instance:

  • Product Development should innovate based on direct and indirect customer feedback, which CS can provide, but should also proactively set the vision based on market trends.

  • Marketing needs to set accurate and compelling expectations about the product, ensuring customers feel they are receiving the value promised at the sale stage.

  • Sales should align customer expectations with actual product capabilities, avoiding overselling that leads to churn.

A Collaborative Strategy for NRR:

To maximize NRR, a shift in company culture and structure is necessary. Every department should feel they have a stake in customer retention and expansion. This means it is imperative to:

  • Make sure all teams have direct visibility into customer’s needs and wants so they can quickly and effectively act on them.

  • Give CS teams a seat at the table when discussing product development and strategic decisions, ensuring their insights directly contribute to organizational changes.

  • Ensure that leadership fosters an environment where all departments are equally accountable for customer outcomes.

Conclusion:

It’s time to broaden our view of what affects NRR and adjust our expectations of who should be accountable for it. By spreading the responsibility across the organization and aligning roles more closely with the ability to influence customer outcomes, companies can create a more balanced, responsive, and ultimately more successful business model. NRR isn’t just a CS metric; it’s a company-wide mission that every team member should contribute to.

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