I don’t know a cloud technology Customer Success Manager (aka CSM) and/or Account Executive (aka AE) that hasn’t been part of at least one difficult discussion about the cost of their clients cloud software renewal, and what options exist to bring it down. It's almost inevitable that these conversations will take place as customers question increasing yearly costs in relation to their achieved (or underachieved) return on investment (aka ROI).
In some cases, this can result in a leadership level escalation in which the you (the customer) wants to speak to someone higher up about the product, the pricing, and your overall relationship with your technology partner. While these requests for escalation in and of themselves are 100% fair, customers need to be mindful of how they talk about that relationship component in terms of their interactions with their assigned CSM.
Why? Well, if the goal is to simply reduce the cost of software which is providing positive value/ROI, and the CSM has in-fact been highly engaged with you and other members of your organization, throwing shade at the “relationship” to the CSM's higher ups could lead to some difficult (and unwarranted) internal conversations between the CSM and their leadership team. All when they were doing precisely what they are supposed to in their role as your trusted partner and advisor in the use of the cloud software.
On the other hand, if this IS justified (meaning your CSM isn't that great, i.e. slow to respond, not delivering value, not helping you increase your utilization of the software, not challenging assumptions etc.), by all means, speak up and say so to their leadership team, but also request a change in your CSM. Why stick with an assigned person that isn't living up to expectations?
The weirdness I'm honing in on occurs if, as a pricing negotiation technique, you indicate that your assigned CSM is no good primarily for the purpose of reducing your subscription cost, and then you subsequently renew your subscription (having not changed your CSM). CSM's are meant to be your advocate inside their organization, burning that bridge to save money never helps. The result is that in their eyes, you’re a poor customer. Poor customers who tell even mild falsehoods and/or don't take ownership of their own failings to use the technology, in order to diminish the legitimate efforts of their assigned CSM may end up getting a lower level of internal advocacy within the technology provider, which is crucial, particularly for larger platforms (i.e. CRM, ERP's etc.).
And here’s the tricky part, you may have ended up getting your annual contract value decreased, but when push comes to shove, that CSM that you “burned” to get that discount will never look at your account in the same light again as you've eroded the trust that they've worked hard to build up. This could mean slightly slower response times, shorter/canceled meetings, less access/awareness about early access programs for new features, fewer perks (i.e. education and conference passes etc), the list goes on. There's a difference between a CSM that just goes through the motions and one that prioritizes your account and keeps you top of mind.
The recommendation here is to come ready to the negotiation with tangible, quantifiable issues you are having that justify your request for a reduction in cost, and all from a spirit of partnership. Also, be sure to validate any relationship challenges (real or perceived) well in advance of a renewal, and if there are none (meaning, your CSM has been great), don't diminish the relationship to save money, as it may lead to some very awkward meetings after the contract has been signed.
