Customer Success Qualified Leads (CSQL) has emerged as a new game-changing strategy for growth and retention in the growing world of SaaS businesses. As customer success leaders, product leaders, and sales and revenue leaders, you're in a prime position to harness these signals to build robust prospect pipelines that'll drive company growth.

Let's dive into how to integrate customer success with sales in a way that grows revenue with upsells and increases Net Revenue Retention (NRR) and Gross Revenue Retention (GRR) growth. By monitoring CSQL, you're nurturing relationships and securing long-term partnerships. Here's how you can start:

• Understand CSQL: Think of your best customers—what signals do they show when they're ready to deepen their commitment? CSQL helps you recognize those signs.

• Integrate with Sales: Work hand-in-hand with your sales colleagues. It's about forming a team that actively shares insights and strategies.

• Align Marketing: Your marketing efforts should echo the needs of customers. Make everything you do about adding value.

• Engage and Retain: The magic happens when you can keep customers delighted and engaged. CSQL is your roadmap to making that a reality.

You're setting your company on a path to drive revenue and give customer success a seat on the revenue table.

Why CSQL is important to SaaS companies

What is CSQL (Customer Success Qualified Leads)?

Customer Success Qualified Leads (CSQLs) are identified through the lens of customer success rather than traditional sales or marketing channels. Unlike typical leads, CSQLs come from your current existing customer interactions. CSQL highlights those customers who are already experiencing value from the service and are likely to expand their usage or adopt additional features. CSQLs take into account the prospect's fit, and customer success teams can pinpoint leads based on:

• Customer satisfaction levels

• Engagement metrics

• Product adoption rates

With CSQLs, SaaS businesses can zero in on customers primed for upsell or cross-sell opportunities.

Think of a CSQL like a Product Qualified Lead (PQL). Like PQLs are identified through product usage to find those likely to upgrade, CSQLs signal when it's time for your sales and customer success reps to start outreach for an upsell conversation.

Customer Success leaders and their teams can leverage these nurtured CSQLs to showcase high-quality prospects with a higher likelihood of renewing, retaining longer, referring, converting upsells & revenue growth, and reducing churn.

How do I use CSQL?

Timing is key to CSQL to strategically upsell or cross-sell opportunities based on customer engagement level, offering special pricing for upsells, and implementing loyalty rewards for referral champions. Give incentives to the CS team members for adding to the revenue pipeline.

Collaborating with the Sales team to craft targeted outreach campaigns and upsell proposals can drive conversions. Partner with the Product team to identify opportunities for beta testing, early adoption, or initial sales of upcoming features. We go into some examples below.

Present CSQL pipeline to leadership monthly, quarterly, and yearly to highlight upcoming revenue growth. Showcase the CSQL pipeline growth when requesting resource planning and team scaling.

How does CSQL drive revenue growth like NRR and GRR?

CSQLs offer clear signals for boosting Net Revenue Retention (NRR) and Gross Revenue Retention (GRR). By focusing on CSQLs, CS teams can drive significant revenue growth with targeted upsell and cross-sell efforts. But CS leaders also need to engage with customers who are not yet CSQLs and guide them towards becoming CSQLs. See below on how to generate more CSQLs.

To build qualified leads, start by ensuring that customer success teams are equipped with data-driven insights about customer behavior and satisfaction. Help CS team with personalized engagement strategies that focus on nurturing relationships with high-value customers.

Enhance NRR by targeting CSQLs with upsell and cross-sell opportunities that align with their existing usage patterns. Adjust offerings and collaborate with sales and product teams to refine value propositions and develop solutions that deliver tangible benefits. Improve GRR by prioritizing initiatives that prevent churn by addressing customer pain points and strengthening loyalty. See the revenue example below.

CS teams can effectively leverage CSQLs to boost NRR and GRR, fostering sustained financial growth. CS leaders have an expanded role in not only retaining customers but also generating new revenue.

How is CSQL different Health Scores? And how is CSQL similar to Health Scores?

You might be wondering isn't this just health scores? Here is how CSQLs and Health Scores Differ:

CSQLs focus on identifying prime customers for upsells, cross-sells, or expansion opportunities. While health scores evaluate the general health and satisfaction level of a customer account.

CSQLs come into play when a customer is ripe for additional services or products. Health Scores are continually updated to reflect the customer's journey throughout their lifecycle, not necessarily tied to signal for upgrades.

CSQLs focus on revenue growth prospects within current accounts. While health scores provide a snapshot of an account's overall status and churn-risk factors.

In the same way, CSQLs generate sales prospects and drive revenue growth. While health scores guide retention strategies and proactive interventions to maintain customer health.

Both CSQL and health scores rely on customer data and metrics to make informed assessments. Both seek to forecast future customer behavior and needs, helping to stay ahead of the curve. They require ongoing analysis and updates to adapt to changing customer dynamics.

While health scores can help you identify CSQLs, accounts with high health scores are generally more likely to be open to upsell or cross-sell conversations. Keep your eyes on those green lights!

Identifying the Right CSQLs

What are the different types of revenue generated from CSQLs?

CS teams should work with Product and Sales teams to create proposals for:

1. Upsell Revenue: Existing customers upgrading from a basic to a premium subscription plan

2. Cross-Selling Revenue: Existing customers interested in buying complementary products or services. This enhances their experience and deepens their engagement

3. Expansion Revenue: Existing customers increase their usage or add more users to their account, typical in SaaS businesses with per-user pricing models.

4. Renewal Revenue: Identifying satisfied customers likely to renew and restructure the plan into a larger subscription deal

5. Referral Revenue: Track customers and revenue from satisfied customers through referral programs

6. Early Adoption Revenue: Identify prime candidates for beta testing or early adoption of new features or products. This can generate revenue through special early-access pricing or by securing long-term commitments.

7. Consulting or Professional Services Revenue: Offer CSQLs additional services beyond the core product offering, leading to revenue from consulting or professional services engagements

8. Training and Education Revenue: CSQLs might be interested in advanced training or certification programs, generating additional revenue through these educational offerings

How can the Customer Success team identify and calculate CSQLs?

Identifying and calculating CSQLs combines data analysis with customer interactions. Here's how you can get started:

First, define the key indicators that show a lead's potential for upsell or cross-sell opportunities. You can pinpoint CSQLs using several criteria:

• Usage levels

• Team expansions within their organization

• Spread of product use among team members (internal virality)

• Support tickets - resolved issues mean a happier customer

• Positive sentiment from key champions

• Positive sentiment from buyers

• Engagement within your community

• Interest in testing new features

• Requests and inquiries from them

• Word-of-mouth recommendations

Leverage tools like CRM systems, customer feedback surveys, and product usage analytics to gather valuable data. It can feel challenging, as Customer Success reps often don't have direct access to detailed customer data. But utilizing these tools effectively can bridge that gap and empower your team to strategically target the right leads.

Engage with your customers through business reviews that showcase potential growth paths and return on investment.

What are some examples of CSQLs?

CSQLs can vary widely depending on the business context and customer interactions. You might have experienced some of these customer situations, but tracking and navigating the upsell proposal will help you propel to generating revenue growth.

Example 1

• CSQL: Customers who frequently engages with your product and regularly seeks additional features 

• Proposal: Readiness for an upsell, as they may benefit from advanced functionalities or a premium version of the service.

• Upsell Communication: "Hey Joe, I am so happy you are using our platform to its full potential. Did you know with our newest feature, you can get more out of your data? I'd love to give you a tour of this."

Example 2

• CSQL: Customers who have recently expanded their team or operations

• Proposal: suggesting an opportunity for cross-selling additional user licenses or modules

• Upsell Communication: "Hey Joe, congrats on expanding your team! I am happy your company is scaling. I love to do an onboarding session with them"

Example 3

• CSQL: Customers who consistently provide positive feedback and high satisfaction scores

• Proposal: referrals or advocacy programs, potentially driving referral revenue.

• Upsell Communication: 'Hey Joe, thanks for submitting the G2 review. We really appreciate it. I noticed you have a connection with Acme Corp, and I love to show them how we help you grow"

Recognizing these indicators allows Customer Success teams to tailor their engagement strategies, focusing efforts on leads that exhibit clear potential for growth and expansion.

Effective CSQL Lead Generation Tactics

How do CSQLs compare with MQLs or PQLs?

CSQLs, MQLs (Marketing Qualified Leads), and PQLs (Product Qualified Leads) all represent different stages and types of leads, each identified through distinct methods.

MQLs are generated by marketing activities targeting new prospects at the top of the sales funnel. MQLs are leads that have shown interest through marketing efforts, such as downloading resources, attending webinars, or engaging with email campaigns. These leads are often still in the awareness or consideration stage, requiring further nurturing.

PQLs, on the other hand, are identified based on their interaction with the product itself, such as using a free trial or freemium version. PQLs are in between, having tried the product but not yet converted. These leads have demonstrated a higher intent by experiencing the product's value firsthand, making them more likely to convert than MQLs.

CSQLs differ by focusing on existing customers who have already realized value from the product and exhibit potential for upsell or cross-sell opportunities. CSQLs generally have the highest conversion rates and are often the least expensive to acquire. CSQLs leverage the existing customer base, capitalizing on established relationships to drive revenue growth.

How do you track and calculate CSQL?

To track and calculate Customer Success Qualified Leads (CSQLs), companies should follow a structured approach that combines data collection, analysis, and scoring. Here's how to effectively track and calculate CSQLs:

1. Define CSQL criteria: Establish clear criteria for what constitutes a CSQL in your organization. Include product usage, engagement levels, customer health scores, and expansion potential.

2. Implement data collection tools: Utilize Customer Success platforms, CRM systems, and product analytics tools to gather relevant data. Tools like Gainsight, Salesforce, or Velaris can help automate data collection and analysis.

3. Set up a scoring system: Develop a scoring model that assigns values to different customer behaviors and attributes. For example:

   • Product usage: 0-100 points

   • NPS score: 0-50 points

   • Feature adoption rate: 0-75 points

   • Account health: 0-100 points

4. Calculate CSQL scores: Use a weighted formula to calculate the overall CSQL score. For instance:CSQL Score = (Product Usage x 0.3) + (NPS x 0.2) + (Feature Adoption x 0.25) + (Account Health x 0.25)

5. Establish CSQL thresholds: Set a threshold score above which a customer is considered a CSQL. For example, any customer with a score above 80 might be classified as a CSQL.

6. Automate the process: Use your Customer Success platform or CRM to automatically calculate and update CSQL scores based on real-time data.

7. Regular review and refinement: Periodically review the effectiveness of your CSQL tracking and calculation process. Adjust criteria, scoring, and thresholds based on outcomes and changing business priorities.

8. Integration with workflows: Set up automated alerts or workflows that notify the appropriate team members when a customer becomes a CSQL, ensuring timely follow-up and engagement.

9. Reporting and analysis: Create dashboards and reports to track CSQL trends, conversion rates, and the impact on revenue growth. This data can help refine your CSQL strategy over time.

By implementing this systematic approach, companies can effectively track and calculate CSQLs, enabling them to identify and capitalize on expansion opportunities within their existing customer base.

What are the tools that calculate CSQL?

Customer success software like Gainsight or Totango offers specific features for identifying and tracking CSQLs. These platforms integrate various data sources to generate comprehensive insights, allowing businesses to refine their lead generation strategies and focus on high-potential leads primed for conversion.

Review these tools pricing and requirements before implementing. Its common to see teams consider expensive and bulky softwares to create CS processes that might require more refining. Consider no-tech tools like Excel to manage the calculations and playbook. 

If you want to showcase CS teams as revenue generators, learn more about our platform.

How can companies grow the CSQL pipeline?

To grow the Customer Success Qualified Lead (CSQL) pipeline, companies can implement several strategies:

1. Leverage data analytics: Utilize customer data to identify potential CSQLs based on usage patterns, engagement levels, and product adoption rates.

2. Implement behavioral segmentation: Use tools like Userpilot to segment customers based on their in-app behavior and engagement, allowing for more targeted and personalized offerings.

3. Enhance customer onboarding: Create a comprehensive onboarding process that educates new users about key features and benefits, helping them realize value quickly.

4. Offer exceptional customer support: Provide responsive, multi-channel support to address customer issues promptly and effectively.

5. Personalize customer experiences: Tailor your product, communications, and offers to meet individual customer needs and preferences.

6. Implement a loyalty program: Reward loyal customers with incentives, discounts, or special offers to encourage long-term relationships and referrals.

7. Use contextual upgrade prompts: Employ modals or tooltips to suggest account upgrades at relevant points in the customer journey.

8. Offer premium feature trials: Allow customers to test upgraded features before purchasing, showcasing the value of higher-tier plans.

9. Create FOMO with limited-time deals: Offer time-sensitive promotions to create urgency and drive conversions.

10. Engage in proactive communication: Regularly reach out to customers with product updates, educational content, and personalized recommendations.

11. Conduct regular customer feedback surveys: Gather insights to improve your product and address customer concerns before they lead to churn.

12. Optimize pricing strategies: Experiment with different pricing models to cater to a broader range of customer needs and preferences.

13. Focus on customer education: Provide free webinars, video tutorials, and product demos to help customers maximize the value of your product.

14. Implement smart dunning workflows: Use tools like Chargebee Receivables to minimize involuntary churn due to failed payments.

15. Track and analyze churn metrics: Regularly review churn data to identify trends and areas for improvement in your CSQL pipeline.

By implementing these strategies, companies can effectively grow their CSQL pipeline, increasing customer retention, expansion opportunities, and overall revenue growth.