Paying customers keep businesses afloat, and many departments work toward keeping them happy. In fact, both customer success and account management teams seek to help customers reach their goals.
So what's the difference between these departments?
Today, we're going to take a look at Customer Success vs. Account Management. That includes their different responsibilities and aims. Let's dive in.
Table of Contents
- Customer Success vs. Account Management
- What Makes Customer Success Different?
- What Makes Account Management Different?
- How Account Management and Customer Success Work Together
Customer Success vs. Account Management
Customer success (CS) describes the overall actions a company takes to keep customers happy and help them reach their goals. Many businesses have dedicated customer success departments, which operate alongside other customer-facing teams.
Customer success managers have many responsibilities. That includes onboarding new customers, understanding their needs, and finding solutions to the user's challenges.
Account management (AM) teams also focus on supporting customers. They step in whenever a customer has a burning issue or a general question. For example, when a customer wants to discuss their subscription plan, they work with account management.
Account managers are typically more focused on renewals and upsell opportunities than customer success teams.
Where Customer Success and Account Management Align
While account management and customer success operate differently, they have shared goals. See key similarities below.
They both communicate with existing customers.
Unlike sales teams, account managers don't cease customer communication once they close the sale. Quite the contrary. That's where they begin their journey.
Account managers' roles circle around so-called key accounts. These are clients who generate significant revenue or have big growth potential.
In essence, account managers communicate with the same clients as customer success. They keep each other in the loop about the client's latest queries, and needs.
They aim to keep customers happy.
Both CS and AM teams want users to get the most value out of the service/product. As AMs are assigned to specific clients, they often receive direct requests.
Account managers tend to ask questions personally or pass them on to CS. In fact, CS teams usually step in to offer quick help, as they're customer experience experts.
For example, a customer success specialist can show customers which features they're currently missing out on and how these can help them reach their goals faster.
They share high-level objectives.
CS and AM teams tend to engage in different tasks, but all of their actions lead to a common, high-level objective. That is, helping customers reach their goals and retain them as (happy) clients.
Both teams work hand in hand to maintain high customer satisfaction levels and extend each customer account's lifetime value (LV).
Now, let's see how these two departments differ.
What makes customer success different?
Customer success managers (CSM) are the first point of contact when a problem occurs. They're responsible for the success of the customers, so they often create best practices that users can apply to better navigate products.
The CS team ensures that customers see value in the product they pay for and that they're happy with the results.
The Focus of Customer Success
The main focus of customer success is to build a partnership with customers. Their relationship starts as soon as the user clicks that sign-up button.
Customer success managers play a major role in creating a positive customer experience, which comes down to:
- Providing continuous support
- Gathering feedback
CS goes way beyond account management, which revolves primarily around making more money for the company. As CS managers are the co-creators of customers' success, they proactively seek ways to make the user experience better.
Since they're regularly in touch with clients, CSMs a great source of information about them. That knowledge, along with the data they collect through user interactions, can inform business strategy.
Important Customer Success Metrics
- Customer Health Score
- Qualitative Customer Feedback
- Customer Retention Cost
Here are a few customer success metrics that will help you evaluate the performance of your team.
Customer Health Score
A customer health score is a metric that helps customer success check the status of the customer relationship: whether it's healthy or at risk.
Companies can come up with their own scoring system. Irrespective of the system they choose, customer health scores help the CS department predict how likely the user is to renew, upgrade, or end their subscription.
Qualitative Customer Feedback
Qualitative feedback relates to all non-numeric information on how customers feel about a product or service. You can collect it via surveys using open-ended questions, social media, or online reviews.
Qualitative feedback can give you a good overview of how customers perceive your brand. You can also use it as the basis for improving your offering.
Customer Retention Cost
Customer retention cost is all the money you spend to keep a customer. It includes expenditures such as customer service, training, customer engagement initiatives, and marketing.
To calculate your customer retention cost per customer, divide your total CRC by the number of active customers you have within a specific time period.
What Makes Account Management Different?
Account management, as opposed to customer success, focuses heavily on the financial aspect. Account managers are responsible for renewals, upsells, and cross-sales.
The Focus of Account Management
Both account managers (AM) and customer success managers accompany users throughout their journey. However, their roles and goals differ.
Account managers act as company advocates, and they're responsible for the firm's bottom line. While they might not play a major role in customer retention, they're definitely accountable for the account's growth.
While the AMs role can vary from business to business, they often have the following duties:
- Staying in touch with customers, to ensure they get the products or services they pay for.
- Seeking options to increase the account's value through renewals, upselling, and cross-selling.
- Working with customer success to make sure all problems are properly addressed.
- Keeping key account managers up-to-date on all the accounts.
In simple terms, the role of an account manager begins where the role of a customer success manager ends.
Important Account Management Metrics
- Customer Upsell Revenue Rate
- Customer Outcomes
- Organic Growth
Here are a few metrics that account management focuses on, as opposed to most CS teams.
Customer Upsell Revenue Rate
This metric focuses on calculating the revenue a company makes from upselling to existing customers. You can evaluate it by comparing the increase in revenue generated from an account.
For example, let's say that a customer is on a "Basic" plan, which offers five user accounts for $399/month. An account manager might know for a fact that the customer's team has ten members.
If the customer is happy with the service/product, the AM team might be able to upsell them to a higher "Premium" plan, which is just $499/month for twice as many users.
As you can see, it's a perfect way to tell if your AM team is doing a good job at building trust and loyalty.
This key performance indicator (KPI) helps you measure your AM team's ability to help customers reach their objectives, as well as meet team goals. An "outcome" can be anything that's a tangible or measurable achievement.
For example, if the company introduced a new, paid module to the platform, the AM team's outcome could be measured by the number of customers who:
- Attend a product launch event or webinar.
- Request early access.
- Sign up for the new service after their account manager's call.
Generally, you compare the effort the AM team puts into an activity or campaign against the outcome.
This KPI helps you measure the growth your business is able to generate from existing client relations. This can be anything from closing a sale from a customer referral to subscription plan upgrades or cross-selling success.
It's easy to see why this is an important success indicator for AM teams. After all, if you're able to leverage your current connections, then it speaks volumes about the bonds your AMs have built with customers.
How Account Management and Customer Success Work Together
CS and AM teams can complement each other's work perfectly. They can both help customers with requests whenever they have the knowledge and resources to do so.
Both teams can make each other's daily operations much easier. However, there's one condition. They need to communicate effectively. That involves knowing where each team's competencies end, and when the other department should step in.
It's particularly important to ensure that upselling, cross-selling, or any other price-related negotiations are left entirely to the AM team.
CS can do wonders to educate the user on how to get the most out of the product or service. They can solve their ongoing requests or challenges, without being sales-y in their communication.
However, the better they are at helping customers reach their goals, the more willing will the users be to explore higher plans.
As you can see, both customer success and account management can work in sync, and work toward company growth.
Customer Success vs. Account Management — Close Cooperation Necessary to Success
When you think about your customer-facing teams, it's not about choosing between customer success vs. account management. Both of these teams interact with customers, but they're not mutually exclusive.
Quite the opposite. The CS team focuses entirely on keeping customers satisfied, while account managers also aim to grow revenue from each account.
Set clear guidelines for both of these teams, and you'll be more likely to keep customer satisfaction and lifetime value at an all-time high.