The following is Pat’s response to the question, “You’ve advocated for risk forecasting rather than risk assessment. Can you explain the difference between the two, and recommend how other Customer Success leaders can establish a risk forecasting system?”


Over the last 10 years, particularly in Customer Success where there's a lot of focus around risk assessment, many of the tools and the data are tailored towards “highlighting” risk which we’re very good at and is a key component of CS. What I’m a big advocate for however is extending risk assessment into risk forecasting. The difference between these two is the difference between identifying a problem versus actually committing to an outcome. 


For example, I’ve attended many risk and health assessment meetings where we spend hours in conversations around customers' health, assessing what the problems are, and what we should do about it next. But then, nothing happens because in many cases there aren’t any real individual consequences to inaction. 


This is why I will always advocate for individual CSM risk forecasting as a key discipline in parallel to risk assessment. 


Take a look at a high functioning Sales organization. The ability to forecast deals is a non negotiable. It's the ability to know where you're going to be at the end of the quarter and then give your manager the confidence that you're going to land within that range. In most cases, Sales managers don't care what the actual makeup of that spread is, as long as the salesperson hits within that committed range.


I see Customer Success, particularly higher touch CS, as being no different. CSMs have a book of business and in many cases a clear commercial event (renewal). It’s the CSMs responsibility forecast where they will land within that range of ACV, churn, MRR, etc and hold themselves to account for that.  Without this discipline, It's very easy for a CSM to find themselves at the end of the quarter in the same situation they were in at the beginning of the quarter, because at no point during the quarter were they put under scrutiny to make that call and to deliver on that commitment.


One question that can come up around this topic is about who in the organization should own the renewal forecast—CS or Sales. From my perspective, the CS organization should own the call on the renewal forecast. Acting on that forecast call comes down to CS aligning with the Sales or renewal org to pull the strings to make it happen. Responsibility for  making a forecast call doesn't mean that you necessarily need to be personally in a renewal commercial conversation. What it does mean is that as a CSM, irrespective of what your comp plan says and of what your KPIs are, your job is to ensure that customers see value in what they originally invested in your product to achieve, and to make the call as to whether or not that's the case and if they will renew or not. 


It’s one thing to want to be a CSM, to want to be making connections, to want the org to acknowledge the work we do. But real excellence comes from having the discipline to be able to commit to a forecast and an outcome that you know will be difficult and could leave you exposed but you do it non the less.  In terms of skill sets, I believe this is a gap in CSM enablement. I am obsessed with discipline and with training CSMs the same way as a Sales organization views enablement. 


We need to evaluate CSMs on areas like:

  • Can they build champions? 
  • Can they forecast risk? 
  • Can they qualify risk? 
  • Can they create opportunities? 
  • Can they embrace difficult conversations?


A more commercial, sales-led approach, irrespective of who owns what, is critical to having a high-performing Customer Success organization. Deep discovery, champion building, and risk forecasting are all part of the DNA of a high-quality CSM, and the best CSMs don't ignore these activities just because they aren’t metrics within their comp plan. This toolset is simply part of how they operate. And as their manager, the contract I have with CSMs is that it's my job to enable them and to give them the skills to be able to do that exceptionally well and in return, they put themselves out there and commit.




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