Customer success charters are a mainstay for CS teams and strategy. But are they overdue for an update now that roughly half of CS teams own renewals and expansions?
According to the 2024 Customer Success Leadership Study, charters haven’t evolved much in the past four years. Onboarding and adoption remain the top priorities, with “revenue” activities such as renewals and expansions lower on the list.
Do onboarding and adoption still belong in first place as the key to revenue success, or is it time for charters to evolve?
We asked Lukas Alexander, ChurnZero’s VP of customer success, for his perspective on customer success charters, renewal and expansion ownership, and how his own team’s approach has evolved since the downturn.
Customer success charters have changed little since 2021, with renewals yet to take the top priority.
Now that customer success is a revenue-owning function, are the charters we see in 2024 outdated?
Lukas: GRR and NRR—or the priorities of retention and expansion—belong at the top of CS charters, because customer success is a revenue-owning function.
Next come onboarding and adoption, the key drivers of NRR and GRR, because there’s a strong correlation between churn and failure to launch or adoption issues. Customers’ perceptions of value and impact don’t emerge during the renewal conversation; they start on day one, which means we need a constant focus on onboarding and adoption to be strategic about renewals.
So why not keep onboarding and adoption at the very top, if they’re the main factor in successful renewals? It’s because ultimately, they play a supporting role in what should be your overarching focus: increasing GRR and NRR.
Revenue ownership is fundamental to your team’s value, influence, and ability to get the big things done. Owning time-to-value and product adoption rate is important, but ownership of the dollar they influence drives customer-centricity even more aggressively across your organization.
You Mon Tsang and John Gleeson discuss charters in this year’s CS Leadership Study webinar.
What factors make onboarding so fundamental to renewals?
Lukas: Onboarding is often called the first impression, but it really isn’t.
The customer has been engaged with your company for quite a while. The full lifecycle starts well before they even purchase the product, when we sell them on the idea that it will help solve their business challenges.
By the time they get to onboarding, they’ve been engaged with you through discovery calls, tech reviews, and negotiations. Now, it’s a make-or-break moment because they’re itching to see the value you’ve promised. Either the product will work for them, or they’ll be disappointed.
If it goes wrong, it’s a huge blow, and there’s a high likelihood that a year-one renewal will fail.
A poor onboarding doesn’t just cost product usage; it also breaks the relationship. Customers may feel misled, even if expectations were set correctly during the sales process. It can lead to resentment, disengagement, and ultimately churn—and it would take a lot of time and energy from your CS team to earn back that trust. In a virtual environment, especially, it’s easy for customers to start ghosting or disengaging from the relationship.
But if we build that trust and deliver value in onboarding, renewals could be super-easy for both us and the customer.
Should renewals and expansions belong to CSMs?
Lukas: CSMs should ideally own renewals and expansions if the company’s structure permits it. Over the past decade, this role has evolved significantly, and I believe we’ve earned the right to own the bottom line.
Roughly half of CS teams own renewals in 2024 – a figure that has remained consistent since 2020.
I also believe that CS teams should collaborate with other departments where specialized skills are better suited for achieving commercial outcomes. For instance, AEs might step in for expansions into new departments or business units.
However, many factors can influence these decisions, such as sales or product expertise and internal rules with sales teams. The best approach varies from company to company.
Where might CS leaders with stretched resources allocate them most effectively to improve retention?
Lukas: Turning around an onboarding team or making significant improvements to the onboarding process will have long-term benefits. However, it won’t yield immediate results until customers go through a full renewal cycle.
In the short-term, I would recommend looking at the entire customer journey and identifying ways to proactively support customers who had a rough onboarding experience. Take stock and look ahead, rather than dwell on what’s already happened.
“Everboarding” is also critical. Many customers invest heavily in training during onboarding, but when new users join later, they don’t receive the same level of support, leading to drop-offs. Investing in a continuous onboarding process can help turn things around.
2024 saw CS budgets in a holding pattern, with a plurality of leaders reporting neither increase nor decrease.
What does ChurnZero’s customer success team charter look like, and how have your priorities evolved?
Lukas: As you might expect, GRR and NRR are the customer success team’s number one priority at ChurnZero, followed by onboarding.
Our onboarding process is complex, due to the diverse data sources and integrations we manage. It’s not a plug-and-play tool, so setting the right foundations is crucial.
Customer enablement has also been a big focus in 2024, leading to the creation of certifications and an enhanced academy for our customers. We’re already seeing improved adoption rates and enhanced customer results.
The engagement we have with different stakeholders within our customers’ organizations is also critical. A platform like ChurnZero becomes more valuable as more people throughout a company use it. So, the relationships we build, from executive sponsors to day-to-day contacts, are crucial to overall renewal.
Our charter has also evolved to meet the times. When customers had bigger budgets and growing teams, expansions held a higher priority on the charter. As the economy shifted, we shifted priorities towards continuously showing customer value and investing in enablement. We invested in improving our knowledge base, launching certifications, and building a strong focus on making end-users their own heroes.
Lukas Alexander is ChurnZero’s vice-president of customer success. He has over a decade of experience successfully building and scaling global customer success teams, and elevating Net Revenue Retention (NRR) year over year.
