The organizational placement of the Customer Success (CS) function is a key decision for any subscription-based business. How a company structures this department, particularly its relationship with the Sales organization, impacts its ability to retain customers, generate expansion revenue, and foster a healthy company culture. There is no universally correct answer to where CS should report, as the optimal structure must align with the company’s current stage of growth and its primary revenue priorities. The chosen reporting line influences team incentives, the customer experience, and the long-term trajectory of revenue growth.
Defining the Core Functions of Sales and Customer Success
The primary objective of the Sales department is new customer acquisition, measured by closing new revenue and achieving short-term quota attainment. Sales cycles are transactional and focus on the initial contract value to meet bookings targets. Sales efficiently converts prospects into paying customers, often emphasizing the immediate value proposition.
Customer Success (CS), by contrast, focuses on the post-sale relationship, aiming for long-term retention and maximizing customer lifetime value (CLV). Customer Success Managers (CSMs) drive product adoption, ensure the customer realizes the promised return on investment (ROI), and proactively manage account health to prevent churn. While Sales focuses on the initial transaction, CS nurtures the recurring revenue stream through renewals and expansion revenue based on demonstrated value.
Arguments for Customer Success Reporting to Sales
Placing Customer Success under the Head of Sales or Chief Revenue Officer (CRO) creates a streamlined revenue operation. This structure maximizes alignment on expansion revenue targets, ensuring both initial sales and post-sale teams share the same financial goals. The Sales leader, who typically owns the full Annual Recurring Revenue (ARR), gains direct control over the retention and upsell levers needed to hit that target.
This reporting structure simplifies the compensation model, tying both Sales and CS incentives to a blended revenue goal and reducing internal friction over expansion credit. Handoffs become more efficient because a single leader governs the process and enforces standardized operating procedures (SOPs). The shared reporting line fosters a culture of seamless customer transition, ensuring initial expectations are transferred directly to the delivery team.
Operational Challenges When Customer Success Reports to Sales
Integrating CS into the Sales hierarchy introduces conflicts of interest that can erode customer trust and long-term value. When CSMs are pressured by sales-focused leadership, they may push quota-driven upsells prematurely instead of prioritizing customer health and adoption needs. This shifts the CSM role from a trusted advisor to a perceived salesperson, damaging the strategic relationship.
Misaligned metrics also create tension. Sales focuses on Gross Margin and New Bookings, while CS is measured by long-term Net Retention Rate (NRR) and low churn. This emphasis on short-term gains can overshadow the retention-focused activities of Customer Success, and compensation structures often get skewed by sales commission models.
Alternative Reporting Structures for Customer Success
Many organizations use alternative reporting lines to decouple Customer Success from sales quota pressures. Reporting directly to the Chief Executive Officer (CEO) or Chief Operating Officer (COO) elevates the function to a strategic level. This placement signals a company-wide commitment to the customer experience and gives the CS leader a direct voice in executive decisions regarding product roadmap and resource allocation.
Another common alternative is reporting to a Chief Customer Officer (CCO) or a Chief Revenue Officer (CRO), who oversees the entire customer journey. The CCO structure is effective because it creates an executive champion focused solely on the post-sale experience, allowing CS to prioritize retention and value realization. Some companies align CS under the Product or Operations teams, which is beneficial when the primary goal is rapid product adoption and closing the feedback loop between the end-user and engineering.
Deciding the Best Fit Based on Business Maturity
The optimal reporting structure evolves with the company’s maturity and strategic focus. Early-stage startups (Seed or Series A) often benefit from placing the Customer Success leader directly under the CEO. This alignment ensures the CEO remains connected to the customer base, which is crucial for achieving initial product-market fit and gathering direct feedback.
As the business matures into a scale-up (Series B and beyond), the strategic focus expands beyond acquisition to prioritize revenue base efficiency. The primary growth vector shifts toward balancing acquisition with retention and expansion. At this stage, a dedicated executive function, such as a CCO or a neutral reporting line to the COO, becomes necessary to give the retention mandate equal weight and prevent Sales from compromising long-term customer relationships for short-term gains.
Structuring Collaboration Between Sales and Customer Success
Regardless of the chosen reporting structure, effective collaboration between Sales and Customer Success is required for sustained revenue growth. Companies must implement several strategies to ensure alignment:
- Implement a standardized, well-documented handoff process to ensure all customer goals, expectations, and promises made during the sales cycle are transferred to the CSM.
- Establish a formal Service-Level Agreement (SLA) between the two departments to define roles and responsibilities for the post-sale period, including ownership of the customer relationship for the first 90 days.
- Establish shared metrics, such as a joint focus on Customer Lifetime Value (CLV) or Net Revenue Retention (NRR), to foster a unified commercial mindset.
- Conduct joint training sessions and account shadowing to allow both teams to appreciate the complexity of the other’s role and build personal relationships.
- Define clear, documented boundaries between “success” activities (like driving adoption) and “sales” activities (such as presenting new product lines) to maintain the CSM’s trusted advisor status.