PART 2: INTERNAL ORGANIZATIONAL CHALLENGES

These challenges stem from internal dynamics, cross-functional conflicts, and company policies that impact your ability to serve customers effectively.

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Challenge 9: Sales & CSM Ownership Conflicts

Scenario

Sales teams want to maintain primary customer contact post-sale, leading to conflicts over customer ownership, duplicated outreach, and customer confusion about who their main contact is.

Industry Insight

Friction between Sales and Customer Success leads to missed opportunities and significantly lower customer satisfaction scores (Momentum, 2024).

Root Causes

Why this conflict occurs:

• Sales reps fear losing relationship and future upsell commission
• Lack of clear handoff processes and ownership boundaries
• Commission structures that incentivize Sales to stay involved post-sale
• Poor communication between teams about customer status and opportunities
• Different priorities: Sales wants expansion deals, CSMs want adoption and health

Strategies to Overcome This Challenge

1. Clear Handover Process with Documentation

• Define roles explicitly: Sales owns through signature, CSM owns post-implementation
• Create written handover document including: why customer bought, key stakeholders, promised outcomes, timeline expectations
• Schedule formal handoff call with Sales, CSM, and customer together
• Document in CRM who owns what stage (implementation, adoption, expansion conversations)

2. Joint Engagement Model

• Structure collaboration: CSM handles adoption/retention, Sales handles expansion deals
• Schedule quarterly joint customer reviews for strategic accounts
• Share insights: CSM provides health scores and expansion signals to Sales
• Split responsibilities clearly: CSM identifies opportunities, Sales conducts commercial conversations

3. Internal Playbooks & SLAs

• Document customer management boundaries in operations manual
• Create escalation paths for when ownership is unclear
• Establish communication protocols (who contacts customer when, about what)
• Regular Sales-CS alignment meetings to review accounts and coordinate approach

Role-Playing Exercise

Objective: Define post-sales responsibilities with Sales to prevent conflicts

Sales Rep: "I want to keep managing the customer relationship so I can upsell later."

CSM Response: "I see the value in ongoing collaboration - you have great rapport with them. How about we establish a structured handoff where I handle adoption and retention (onboarding, training, health monitoring), while you focus on expansion opportunities once they're successfully adopted? This way they get specialized attention for each phase."

Sales Rep: "That could work, but I don't want to lose visibility into my accounts."

CSM Response: "Absolutely understood. We can schedule joint quarterly check-ins so you stay informed about account health and expansion readiness. I'll also provide weekly updates in Slack about usage trends and upsell signals I'm seeing. You'll have full visibility, but we won't duplicate efforts or confuse the customer about who to contact for what."

💡 Pro Tip: Create a "Rules of Engagement" document with Sales leadership defining: CSM owns Days 0-90 (onboarding), joint ownership on expansion discussions, Sales leads pricing/contracts, CSM provides usage data and opportunity identification. Get leadership buy-in to prevent individual conflicts.

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Challenge 10: Escalations Due to Mis-Sold Features & Expectations

Scenario

Customers were sold features that don't exist, don't work as described, or don't meet their needs, creating immediate trust issues and putting CSM in damage control mode.

Industry Insight

Sales overpromising to close deals is directly linked to misaligned expectations and damaged customer relationships (Momentum, 2024).

Root Causes

Why this happens:

• Sales reps promise future roadmap features as current capabilities
• Miscommunication about product limitations or requirements
• Pressure to close deals leading to overpromising
• Lack of product training for Sales team
• No consequences for mis-selling that CS has to fix

Strategies to Overcome This Challenge

1. Align with Sales on ICP (Ideal Customer Profile)

• Collaborate on defining which customers are good fit vs. bad fit
• Share churn data showing patterns of mis-sold accounts
• Create "red flags" checklist for Sales to identify risky prospects
• Participate in Sales training about accurate product positioning

2. Expectation Management in First Call

• Review Sales notes and identify any promises that need clarification
• Address discrepancies immediately: "I want to ensure we're aligned on capabilities..."
• Reset incorrect assumptions early before they become bigger issues
• Document agreed-upon scope and capabilities in writing

3. Shift Conversation to Existing Value

• Focus on maximizing value from features that DO exist
• Demonstrate quick wins with current capabilities
• Create roadmap transparency about when requested features might arrive
• Position current product as solution to their real business problem

Role-Playing Exercise

Objective: Handle conversation with customer who was mis-sold a feature

Customer: "We were promised this feature during the sales process, but it's not working as expected!"

CSM Response: "I understand your frustration - there seems to be a misalignment between what was communicated and our current capabilities. Let me clarify what's available today and explore how we can still achieve your underlying business goal. What were you hoping to accomplish with that feature?"

Customer: "We need [specific functionality]. If we can't get it, we might need to look elsewhere."

CSM Response: "I hear you - that functionality is important for your workflow. Let me do two things: First, escalate this to our Product team to understand roadmap timing. Second, explore whether we can achieve the same outcome using [alternative approach or integration]. I'll have a concrete answer for you by end of week, including workaround options and roadmap timeline."

💡 Pro Tip: Create a "Post-Sale Reality Check" call in week 1 where you explicitly review: What you can do, what you can't do, what's coming on roadmap, and what was potentially misunderstood during sales. Better to reset expectations early than deal with escalations later.

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Challenge 11: Inflexible Processes Impacting Customer Retention

Scenario

Rigid billing policies, strict contract terms, and inflexible processes prioritize immediate revenue over long-term retention, forcing CSMs to enforce policies that drive customers away.

Industry Insight

Operational inflexibility has a direct negative impact on brand reputation and customer loyalty (The Powers Company, 2023).

Common Inflexibility Examples

• Billing rigidity: No mid-contract adjustments even when customer's business shrinks
• Contract lock-in: Annual contracts with no early termination options creating resentment
• Feature access gates: Must upgrade entire plan for one needed feature
• Payment terms: Requiring annual upfront payment when customer prefers monthly
• Downgrade restrictions: Making it difficult to reduce seats or tier down

Strategies to Overcome This Challenge

1. Advocate for Retention-Focused Policies

• Work with Finance and Leadership to introduce flexible payment options
• Present data showing how rigid policies impact churn rates
• Propose pilot programs for flexibility (limited downgrades, payment plans)
• Quantify cost of inflexibility: "Lost $400k ARR last year to billing rigidity"

2. Proactive Renewal Discussions

• Engage customers 90-120 days before contract end to avoid last-minute conflicts
• Identify budget constraints early and explore options before renewal pressure
• Present flexible pathways: month-to-month extensions, graduated pricing, feature swaps
• Give customers time to plan and budget rather than forcing rushed decisions

3. CSM Advocacy and Escalation

• Build relationships with Finance and Legal to understand what's actually negotiable
• Create escalation paths for reasonable customer requests
• Document revenue impact of lost customers due to inflexibility
• Propose specific policy changes with business case backing

Role-Playing Exercise

Objective: Address customer concerns regarding inflexible payment policies

Customer: "Our budget has been cut, and we need to reduce our spending. Can you offer a discount or let us downgrade?"

CSM Response: "I understand the financial challenges - budget cuts are tough. While we don't typically offer mid-contract discounts, we do have flexible payment options. Would a payment installment plan help spread the cost? I can also review your usage to ensure you're getting maximum value from every dollar spent."

Customer: "That might help short-term, but we're still concerned about long-term costs."

CSM Response: "Let's take a strategic approach. I'll work with our Finance team to explore options like: adjusting your contract to better match current needs, identifying features you're not using that we could remove, or creating a graduated pricing plan tied to your growth. My goal is finding a sustainable solution that works for both of us."

💡 Pro Tip: Create a "Flexibility Request Log" tracking customer requests for exceptions, whether they were approved, and the outcome. Share quarterly with leadership showing: "We lost $X ARR due to inflexibility, approved $Y in exceptions that saved $Z in retention." Data drives policy changes better than anecdotes.

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Best Practices for Internal Organizational Challenges

• Define clear Sales-CS handoff process → Create documented ownership boundaries with leadership buy-in to prevent territorial conflicts
• Schedule joint Sales-CS syncs → Bi-weekly 30-minute meetings to review accounts, share expansion signals, and coordinate outreach
• Conduct expectation reset calls → Within first week, review what was sold vs. what exists to address mis-sold features early
• Build Finance relationships → Understand what's actually negotiable in contracts and billing to offer customers real options
• Advocate with data → Quantify revenue impact of rigid policies and mis-sold features to drive internal process improvements
• Create escalation playbooks → Document when to involve manager, when to loop in Sales, when to request exceptions
• Maintain Rules of Engagement → Get leadership agreement on who owns what customer touchpoint to reduce duplication and confusion

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KEY TAKEAWAYS: BEST PRACTICES RECAP

✓ Sales-CS ownership conflicts are solved through clear handoff processes, joint engagement models, and documented Rules of Engagement with leadership buy-in

✓ Mis-sold features require immediate expectation reset in first call - address discrepancies early before they become trust issues

✓ Inflexible policies need CSM advocacy backed by data - quantify revenue lost to rigidity and propose specific policy changes

✓ Build relationships with Finance and Legal to understand what's actually negotiable when customers request flexibility

✓ Create systematic feedback loops so Sales learns from mis-sold situations and improves future customer targeting

✓ Establish joint Sales-CS sync meetings (bi-weekly 30 min) to coordinate on account strategy and prevent duplicated outreach

✓ Document escalation paths clearly - know when to involve your manager vs. Sales leadership vs. Finance for different challenge types