Episode #303

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​Customer Success is Dead, Meet the Growth Department

Hi Reader,

73% of B2B revenue comes from existing customers every year. That's Forrester's number, and it's been true for a long time. But when Alex Raymond walked me through the math on this week's episode, the part that stopped me wasn't the 73. It was the 100.

100% of your profits come from existing customers. Every dollar. Most new business is a cost center for the first 12–24 months — you're paying to acquire, onboard, and stabilize the account before it contributes anything back. The profit line only turns on once the customer renews.

Now look at how most SaaS companies actually fund the two teams. Sales gets 3x to 4x the headcount, the tooling, the kickoffs, the training budget. Post-sales gets what's left over. Then leadership asks why NRR is flat and valuation is down.

It's not a mystery. You're under-resourcing the team that generates 100% of your profit.
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​What to do with this?

• Run the ratio this quarter: total spend on new-logo acquisition vs. total spend on the existing base. If it's worse than 3:1 or 4:1, you have a resourcing problem, not a performance problem.
• Before the next planning cycle, put one number in front of your CFO: cost to acquire one new dollar of ARR vs. cost to retain one existing dollar. Let the gap do the arguing.
• If your CRO only owns the 27%, they’re not a CRO. They’re a VP of Sales with a fancy title.

This week's episode

E303 | Customer Success Is Dead. Meet the Growth Department.

Alex Raymond has spent years in account management, first as founder of Kapta, now running AMplify and author of The Growth Department. We got into why CS and AM are stuck in an identity crisis, and the specific org, comp, and language changes that pull them out of it.

Here’s what stood out:

1. The resource allocation problem no one talks about — 73% of revenue, a fraction of the funding — [27:02]​
2. The language shift that changes how CS is valued (“book of 30 customers” vs. “book of $3M”) — [29:45]​
3. Why a true CRO should own 100% of revenue, not 27% — [08:09]​
4. NRR as a North Star: the metric that kills the sales vs. CS cold war — [12:42]​
5. Why over-indexing on relationship is how you get the “it’s been a pleasure, but we’re going in another direction” email — [23:05]​
6. Why the 360-degree AE idea has no legs — hunters and farmers are different people — [14:38]​

Listen / watch: YouTube · Apple · Spotify​

One question for you

If someone asked you tomorrow what percentage of your company's profit comes from existing customers, would your CFO, your CRO, and your Head of CS give the same answer?

Andrew

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