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We’ve all heard that some of the most iconic startups have been built during downturns. The one thing they all have in common? A maniacal focus on their customers.
In today’s world, NRR is as important (if not more important) than new ARR. Your existing customers are your best source of revenue: maximizing customer retention and expansion means a much stronger business.
But who should own NRR, upsells/expansion, and customer relationships in your company?
We dove into this question with veteran revenue leaders in a masterclass on How to Maximize NRR – the New Startup North Star. Get their answers and advice below!
Meet the experts:
- Brian Reuter, Director of Account Management at Figma – 10+ years GTM experience across the customer journey in sales, marketing, and CS
- Alex Heller, Head of Account Management at NYSHEX – 10+ years in sales & leadership at Flexport, Athena Health, etc.
- Connor Fee, CRO at Shortcut – 10+ years GTM & leadership experience at Clearbit, Winning by Design, UserVoice, & more
Advice for maximizing NRR 🌟
When deciding who should own NRR, upsells/expansion, and customer relationships at your organization, there are a few key things to keep in mind:
1. Create systems that drive the right behavior. If your AM team owns the upsell, for example, be sure you’re tracking, forecasting, compensating, and motivating them in a way that drives them toward the number they’re responsible for.
2. Document everything. Realistically, there will always be some friction and handoffs in the customer journey. By documenting your processes and context for deals and customer relationships, you’ll smooth out some of that friction and make your team’s (and your customers’) lives easier.
3. See things from your customers’ POV. Everything you do should be driving toward how to make your customers happier and more successful with your product. Figure out what they need to be supported and realize value up front and throughout their journey.
Who should own NRR? Short answer: it depends 😉
As with most problems in sales and GTM, the question of who should own NRR doesn’t have a straightforward answer.
It depends heavily on your company’s product, sales motion, deal size, etc., and will most likely evolve as your company grows and matures.
“I think the smaller you are, the more value there is in having less specificity and more shared responsibility,” Connor says. “Sales, account management, and CS blend together a bit more.”
But as your team grows, there’s going to be a push toward more efficiency and clearer definitions of each role.
One simple way of looking at it: when the situation calls for commercial or sales skills (cross-sells for different products, etc.) then it makes sense for an AE or AM to be involved. Driving more success and usage in the product (which results in expansion) is more likely a CS function.
When deciding who should own NRR for your company, don’t be pigeonholed into one answer forever. Figure out what will best serve your customer now, and evolve as you grow.
Examples from real GTM teams 👀
For inspiration, Brian, Alex, and Connor shared examples of how their sales, AM, and CS teams are structured at their current organizations.
Figma
Figma is a collaborative design tool that offers a full SMB to Enterprise solution. The account management team works with customers with deal sizes anywhere from $10k to $100k+ ARR.
The AE team at Figma handles the initial sale and onboarding, then AM picks up the customer relationship from there. AM functions vary from company to company, but at Figma, it’s a sales-focused role, Brian says – the AM team owns upsells after initial launch.
NYSHEX
NYSHEX is a logistics technology company serving Enterprise customers with an average deal size of about $30-60k. It’s an early product, so getting new logos is the primary focus for the NYSHEX team currently – there likely won’t be a defined upsell/expansion motion until the foundation of customers is a little bigger, Alex says.
However, one thing that Alex and his team are keeping in mind is not dividing sales’ attention too much. When sales has to focus both on signing new customers and growing existing accounts, it can be unproductive.
Shortcut
Shortcut is a project management and issue tracking tool, a Jira competitor with a heavy PLG motion – 80-85% of their motion is self-service, with an average contract value of about $3500, Connor says.
The team at Shortcut is currently about 100 people. They decided to make one person responsible for all of revenue, Connor says, because they wanted to avoid scenarios where, for example, sales would focus on things that were good for sales but bad for the company overall.
Bonus: Great Question
In the chat during the masterclass, Sarah Cunningham-Scharf, Head of CS at Great Question, shared her company’s perspective on who owns NRR, expansion, and customer relationships.
“I was CS #1. I’ve owned since I started, since happiness → expansion. We just added our first AE, and I’ll be more of a BDR for our AE from an expansion perspective. I’ll handle the strategy, sales handles the numbers and negotiation – if CS does negotiation, you lose customers’ trust.”
Maximizing NRR is critical for the health and success of your business, and one that’s just as essential to focus on as ARR.
As Connor said in the masterclass: “If you’re not expanding, you’re contracting.”
Watch the full masterclass:
