Chris Degnan got rid of the Customer Success function at Snowflake because he wasn't willing to give the "B team" access to his "A accounts." He made the sales team responsible for the entire customer lifecycle, including upsells and renewals, to ensure top talent handled high-stakes competitive situations.
According to Snowflake's former CRO, salespeople from Salesforce often make poor hires for growing companies because they don't know how to truly sell. Accustomed to massive inbound demand at a market leader, they function as 'order takers' and lack the skills for proactive, competitive selling.
Assigning expansion quotas to Customer Success (CS) is a critical mistake. CS should focus on implementation, adoption, and value realization, creating the conditions for growth. However, the act of selling the expansion is a core sales responsibility that requires a sales skillset and incentive structure.
To eliminate friction, Snowflake's marketing team, led by CMO Denise Pearson, abandoned MQLs. Instead, they focused solely on delivering qualified meetings for the sales team, treating sales as their primary customer whose success was paramount.
In the run-up to its IPO, Snowflake slowed hiring to optimize for profitability. This caused the sales team to focus on easier upsells from existing accounts (with 177% net retention) instead of new business. As a result, they neglected new logo acquisition for two years, hurting long-term growth.
A one-size-fits-all sales role fails in consumption models. Success requires segmenting the team into specialized roles—new business acquisition, customer onboarding, and account management—each with distinct incentives aligned to their specific function, from initial sign-up to value realization and expansion.
Where the SDR/BDR team reports has significant cultural and career-pathing consequences. When Snowflake moved SDRs under marketing, they began aspiring to be marketers, not salespeople. This created a hiring bottleneck for the sales organization, which needed that talent pipeline to fuel its growth.
Sales playbooks are common, but the same rigor should be applied to customer success. Create a dedicated playbook for account managers covering onboarding, user adoption, quarterly business reviews (QBRs), and proactive upsell/cross-sell techniques. This is a significant and often overlooked revenue opportunity.
The term 'retention team' inherently creates a silo separate from acquisition. A more effective approach is reframing all marketing functions as part of one 'customer team.' This mindset shift focuses everyone on the entire journey, from 'entering the door' to 'staying in the house.'
When sales teams hit quotas but customer churn rises, the root cause is a disconnect between sales promises and operational reality. The fix requires aligning sales, marketing, and customer service around a single, unified strategy for the entire customer journey.
Chris Degnan reflects that financial success made him a worse leader because he lost the desire to do the "hard things" required at scale, like constant global travel and endless internal operations meetings. His passion was for selling and competing, not the operational grind of a multi-billion dollar CRO role.