The Invisible Half of the Bowtie
RelayDesk sells workforce scheduling software to SMB services companies. ARR is $18M across 1,200 customers; average contract value is $15k. Sales is compensated on new logos only. Six customer success managers handle onboarding and support reactively; there is no health score and no QBR. Gross revenue churn is 19% annually; expansion is 3%. CAC payback is 14 months. The board wants net revenue retention above 100% within four quarters. The CRO proposes hiring four more account executives to grow new logos faster; the COO proposes four more CSMs. Data shows 60% of churn happens in the first 90 days, onboarding tickets spike in week two, and product usage drops sharply after week three for accounts that eventually churn. The CEO asks for a recommendation at the next leadership meeting.
1. Which parts of the bowtie are unmeasured, and why does that make the AE-versus-CSM debate unresolvable as framed?
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The company measures acquisition (new logos) and a lagging retention outcome (annual churn), but not the middle of the bowtie: activation, time-to-first-value, onboarding completion, week-4 usage, health and risk signals, renewal likelihood, and expansion pipeline. Because the leak is early lifecycle, the AE-versus-CSM debate is framed as a headcount tradeoff when it is actually a diagnostic question: where does revenue leak?
More AEs increase the top of the bowtie, but if 60% of churn happens in the first 90 days, additional logos will follow the same path. The bowtie makes the handoff and post-sales stages visible; without those metrics, both proposals are guesses. The missing measurement is not a reporting gap. It changes the decision.
2. Make a recommendation on where to invest the next four hires, with the reasoning and the metrics you would use to judge success.
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Recommend investing first in onboarding and CS capacity, not four AEs. The data points to a first-90-days failure: onboarding tickets spike in week 2, usage drops after week 3, and 60% of churn is early. A reasonable next step is three onboarding CSMs plus one CS lead to build a health score and playbook, with a target of reducing 90-day churn by half.
Do the capacity math: 1,200 accounts at 19% churn is about 228 churned accounts per year; 60% early equals about 137 early losses. If each CSM can own 40-50 onboardings per quarter, three hires are defensible. Judge success by 90-day gross retention, activation rate, time-to-first-value, week-4 usage, and NRR-not by CSM activity. Hold the AE hires until the leak is reduced; otherwise CAC payback worsens and new logos churn before payback.
3. Define the handoff from sales to post-sales so the first 90 days are owned, not accidental.
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Define a handoff with a named owner and a five-day kickoff. Sales must pass a SPICED summary: situation, quantified pain and impact, critical event, decision criteria, success metrics, and known stakeholders. CS confirms acceptance in the CRM within one business day; if the data is incomplete, CS can reject the handoff.
The kickoff should agree on the first value milestone, not just implementation tasks. Assign a single post-sales owner for the first 90 days and a risk trigger: if usage falls below threshold in week 3, CS opens a save play. The handoff is not a meeting; it is a transfer of accountability. That is what makes the first 90 days owned rather than accidental.