Customer growth comes from not just collaborating, but tracking. Specifically, implementing, tracking, and optimizing a CSQL (Customer Success Qualified Lead) process as part of your pipeline strategy to identify and manage opportunities within the existing customer base. 

Expansion opportunities are four times less expensive than chasing net-new revenue. But identifying and tracking customer growth doesn’t work the same way as new business. To target customer expansion, you need the right data and processes in place to leverage new lead indicators (such as usage metrics), while continuing to manage the relationship you already have to drive overall retention, advocacy and growth.

That’s where the CSQL process comes in. It reduces the complexity of collaborating across this highly nuanced sales opportunity and ensures the right roles stay focused on the right customer outcomes.

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What is a CSQL?

CSQL is a modern business term iterated on traditional revenue acquisition language that includes MQL (Marketing Qualified Lead) and SQL (Sales Qualified Lead).

At this point, you may be thinking: what’s the big deal? Success has already been doing this for years. The difference is cross-functional planning that brings multiple direct and indirect benefits:

Direct CSQL Benefits: Productivity + Pipeline Execution

1. Drive accountability across expansion identification and ownership.
2. Track current pipeline to increase leadership visibility and follow-through to close.
3. Reduce CSM overwhelm (and potential process avoidance) by eliminating the work needed to identify and connect with the right Sales rep.
4. Reduce the time needed for Sales or Account Management to prospect into the customer base.
5. Improve customer relations and win rate by ensuring Sales reach out at the appropriate time to discuss expansion.
6. Refine your expansion process by analyzing what closed, what didn’t, and why.
7. Enable CS to stay focused on driving adoption, advocacy and retention.
8. Strengthen Sales and Success relations by facilitating mutual wins (as expanded on in the next section).

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Note: If CS partially or entirely owns expansion, we recommend providing sales training to ensure they’re set up for success to own this. Moreover, we advise keeping CS teams (or roles) focused on one or (maximum) two overall customer goals across retention, expansion, and adoption. When all three outcomes are owned by an individual, customer growth will be less likely due to a lack of focus and prioritization. And, this might even make your CS org more reactive than proactive, as they’ll be stretched thin trying to attain multiple goals per account.

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“Almost two-thirds (62%) of revenue ops and sales ops leaders and professionals say they plan to intentionally increase their alignment between sales, marketing, and customer success in 2023” 
- Forrester Research

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Secondary CSQL Benefits: Scalability + Revenue Planning

1. Understand previous customer challenges to re-open at a later date (e.g. check-in on previous challenges and discuss the recommended solution again at renewal).
2. Use CSQL history to inform marketing on whom to nurture around certain features for adoption and upsell campaigns.
3. Exclusive to Catalyst customers: Automate creating CSQLs through Playbooks (e.g. automate entering customers into an expansion Playbook when usage has exceeded 90% of their contract agreement).

All of these benefits–both direct and indirect–lead to more growth. For example, when RippleMatch built their CSQL process between Catalyst and Salesforce, they saw expansion leads double, creating 2x more pipeline while tracking customer growth opportunities across the business for ongoing nurturing.

“We needed to see how many dollars our CSMs were generating, not just see notes in a Google Doc. With our new CSQL process between Catalyst and Salesforce, we more than doubled our upsell lead generation from within the CS team.”
- Hunter Paul, Director of Customer Success, RippleMatch

Understanding the CSQL process

Here are how the mechanics of a CSQL process operate:

Step 1: Turn post-sales intel into an opportunity for growth

The customer relationship owner (CSM/AM) holds a wealth of knowledge about the customer’s pains, goals, and overall business needs. These individuals should be enabled to identify expansion and know how to tie these opportunities back to your product or roadmap. From there, the CSQL officially gets created, assigned, and tracked. 

Factors that could mean a customer is a CSQL:

• When the customer is at or near their account usage limits.
• An explicit reach out from the customer inquiring about expansion or additional features available in your platform.
• Consistent positive feedback about the product and how it applies across their organization.
• CSM discussions uncover the customer has problems you are able to solve with your platform via expansion or a higher tier of service.
• When your customer has a significant positive change (e.g. noticing an article where the CEO announced a major fundraising, acquisition, or hiring plan).

We recommend providing a template for your CSQL pass-off that provides the direction needed to easily document necessary information to Sales without bogging down Customer Success. In Catalyst, all CSQLs are facilitated through dynamic Notes that allow your team to document customer calls and update fields synced back to Salesforce.

If you run tech-touch accounts–or any CS motion without an explicit account owner–expansion workflow automations are necessary. Catalyst customers can take advantage of the Journey Builder and Playbook features to build these easily. 

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Step 2: Track and qualify new revenue business revenue

At this point, the assigned expansion owner in Sales, CS or Account Management will be notified and prompted to reach out. 

A key here is to take a consultative approach–this is not the time for a ‘spray and pray’ sequence. These are your customers and the communication should be centered around helping them achieve their goals or overcome a challenge as indicated in the CSQL notes. 

The key is to focus on understanding what solution will work best for the customer. This means focusing on their overall needs and gaps rather than just trying to sell a new product (or more of the same).

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Step 3: Expand your account partnership and business revenue

When a CSQL is qualified as an opportunity, it gets converted into a CS Qualified Opportunity (CSQO) and ultimately becomes an opportunity in your pipeline to close. 

This conversion is very important—it ensures customer opportunities go through the same rigor as new business. A common error many upsell teams make is assuming a current customer can skip the qualification process and jump right to the pitch. This is where a lot of expansion deals fail. By consciously noting a CSQL becoming a CSQO, the Sales (or Account Management) team knows they are entering a qualification process similar to a new deal. The difference is that AMs can use existing-customer details to build more rapport and talk more deeply about business goals–this helps the qualification process rather than replaces it.

A very important note: While expansion opportunities have a significantly higher close ratio than new business (above 50% on average), current customer revenue is still the lifeblood of your business continuity. Expansion owners need to be enabled with a consultative selling methodology and ensure they know the risk at stake: recurring business revenue.

The probability of selling to an existing customer is 60-70 percent, while the probability of selling to a new prospect is only 5 to 20 percent. 

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Step 4: Recognize and celebrate your collaborative wins!

Formalizing the CSQL process is also a great way to improve the Sales and Success collaboration needed to power Customer-Led Growth. Depending on your pricing/packaging and overall business model (i.e. expansion ownership), we will not be digging into the single right way to recognize and compensate CSQL owners along this process. However, be sure to plan for it as you set this up. Here are a few ideas to start thinking about your approach:

Recognition: Spotlight expansion wins on company-wide calls or cross-functional meetings

Reward Launch a quarterly CS SPIFF or monthly contest for the most CSQLs converted. 

Compensating based on conversion helps keep the focus on lead quality. Further, we recommend this as the best short-term approach to increasing qualified leads within your customer base. If a Sales SPIFF is launched to directly go after customer opportunities, it might do more harm than good on your relations unless you have a highly trained, dedicated expansion team (e.g. Account Management) to tactfully prospect into accounts for these opportunities.

Celebrate: Include CS in EOY celebrations…top performers should be at President’s Club too!

Compensation: Offer CS commission or bonus incentives. 

Compensation for expansion should be balanced by compensation for adoption and retention. If expansion revenue is given a significantly higher compensation, the team might be incentivized to put relationships at risk for the sake of expanding–you don’t want that.

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How other teams factor into a CSQL process

While Sales and CS will own the CSQL process, other teams have a role to play—or can take insight from the CSQL process to inform their actions. 

Marketing takes a firm stance on influencing advocacy and expansion

Marketing will need to take a more active role in customer marketing, and this applies to more than just the customer marketer. The marketing team needs to embrace (and track) targeting the expansion funnel as part of their own revenue metrics. 

This can be achieved across a few key areas: 

• Drive adoption through product launches, events and adoption campaigns
• Build advocacy through community programs and customer marketing (Advisory Boards)
• Create customer content that Sales can use on new business and expansion deals
• Better understand customer expansion to maximize ABM programs with top accounts

Marketing has a big influence over cementing customer advocacy–and thus getting them to the point of wanting more. Plus, marketing can grow new business revenue more efficiently through customer stories, deal references, and insights on their ideal customer profile (ICP) for targeting new business and expansion leads.

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Product highly indexes CSQL analytics to drive the roadmap

Product needs to measure and assess opportunities generated from customers to better understand their post-sale demands and requirements for growth. The CSQL/CSQO process offers rich insights into functional areas of high demand, indicating where you can increase product value through enhancements and new features.

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Operations commits to establishing a CSQL process 

Operations will most likely be the owner of implementing this process., starting by establishing the right workflows to facilitate a lead pass-off between CS and Sales. Operations will also need to ensure there’s a clear line of sight into CSQL tracking for executives to actively review this data in forecasting and revenue reporting while being able to attribute CSQL ownership for recognition as discussed above. 

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Enablement facilitates the end-to-end customer experience

Enablement holds the keys to unifying Sales and Success around the ‘how’ to drive expansion seamlessly. Throughout this article, we’ve certainly covered the importance of providing sales training to both parties in order to manage expansion without damaging customer relations. It’s critical to unify these teams with a shared understanding of what qualifies as a CSQL/CSQO, who owns each stage, how to approach customers consultatively, and overall— encouraging collaboration over competition.

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What gets measured, gets managed—and beyond.

This principle takes the adage of ‘what gets measured, gets managed’ and goes one step further—what gets operationalized, gets prioritized. 

Historically, CS upsell motions have happened in a silo. A CS professional might spot revenue opportunities and might even bring them to Sales, but it’s all ad-hoc and definitely unreliable. A CSQL/CSQO process ensures that there is clear ownership and prioritization around expansion revenue, as well as driving visibility for ongoing optimization.