SlideShare a Scribd company logo
1 of 32
How to Account for
Customer Success
Should you Charge for Customer Success?
Omid Razavi
Scott Golden
Director, Customer Success Strategy
Gainsight
Should you Charge for Customer Success?
Omid Razavi
Today’s Agenda
1. Customer Success Costs
• Segmentation Strategy
• CSM Coverage Ratios
• Emerging CS Roles
• Aggregate CS Team Costs
2. Accounting for CS Costs
• Industry Strategies
• ROI of Customer Success
• Impact Levers
3. ROI of Customer Success
• Impact Levers
Should you Charge for Customer Success?
Omid Razavi
Segmentation Strategy
Your Customers Dictate Your Coverage Model
STRATEGYSEGMENT
High
Touch
Mid Touch
Tech Touch
ENTERPRISE
MID-
MARKET
SMB
PROACTIVE
JUST-IN-TIME
AUTOMATED
Customer Base Segmentation Strategy
Primary
Segmentation Levers
Customer Segment #
20%
54%
17%
6% 4%
<3 3 4 5 >5
Annual Recurring
Revenue is still
the best proxy for
CSM workload
13%
15%
72%
Customer Count
Other
ARR $
Should you Charge for Customer Success?
Omid Razavi
CSM Coverage Ratio
Benchmarks
High-Dollar / Enterprise Segment Ratios
Annual Recurring Revenue
7% 4%
22%
35%
20%
9% 2%
> $20M $20M - $10M $10M - $5M $5M - $2M $2M -$1M $1M - $500K < $500K
0% 0% 4%
43%
52%
0% 2%
> 500 500 - 250 250 - 100 100 - 50 50 - 10 10 - 5 < 5
Customers
69%
95%
Med-Dollar / Mid-Market Segment Ratios
5% 7% 7%
38%
24%
16%
2%
> $20M $20M - $10M $10M - $5M $5M - $2M $2M -$1M $1M - $500K < $500K
0%
46%
15%
37%
0% 0% 2%
> 500 500 - 250 250 - 100 100 - 50 50 - 10 10 - 5 < 5
Annual Recurring Revenue
Customers
78%
98%
Small-Dollar / SMB Segment Ratios
7% 7%
13%
19%
24%
13%
17%
> $20M $20M - $10M $10M - $5M $5M - $2M $2M -$1M $1M - $500K < $500K
20%
17%
24%
15% 17%
0% 7%
> 500 500 - 250 250 - 100 100 - 50 50 - 10 10 - 5 < 5
Annual Recurring Revenue
Customers
69% (Impact of Customer Marketing Role)
61%
Should you Charge for Customer Success?
Omid RazaviEmerging Customer
Success Roles
Emerging Roles Within Customer Success
Yes
60%
No
40%
Renewal
Resources
Yes
61%
No
39%
Solution
Architects
No
54%
Yes
46%
Customer
Marketing
No
53%
Yes
47%
Success
Operations
This person is typically
hired after acquiring more
than 150 customers
It is a must-have role if
the Customer Success
Team owns or forecasts
the retention and
expansion number
These types of resources
are typically “floaters” that
will help drive a project if
the needs are beyond a
CSM’s technical
capabilities
This role will continue to
grow in prominence; our
data shows Customer
Success Teams have
doubled in prominence
over the last 12 months
The Operations role is
key once you have
invested in a Customer
Success platform and
your processes mature
from reactive or gut-feel
to data-driven
Should you Charge for Customer Success?
Omid Razavi
Aggregate CSM Team Costs
>$100M ARR Organizations
Customer Success Costs as a % of Annual Recurring Revenue
11%
0%
6%
0%
22% 22%
39%
>30% 30% - 25% 25% - 20% 20% - 15% 15% - 10% 10% - 5% <5%
Solve for <10%
<$100M to >$10M ARR Organizations
0% 0% 0%
6%
29% 29%
35%
>30% 30% - 25% 25% - 20% 20% - 15% 15% - 10% 10% - 5% <5%
Customer Success Costs as a % of Annual Recurring Revenue
Solve for <15%
<$10M ARR Organizations
Customer Success Costs as a % of Annual Recurring Revenue
13% 13% 13% 13%
25%
13% 13%
>30% 30% - 25% 25% - 20% 20% - 15% 15% - 10% 10% - 5% <5%
Over-investing in Customer Success to protect their
most precious asset: customers
Should you Charge for Customer Success?
Omid RazaviAccounting For Customer
Success Costs
CSM Cost Accounting Matrix
Responsibility Department
COGSSales&Mktg.
CSM Cost Accounting Matrix: By Department
Responsibility DepartmentCOGSSales&Mktg.
4 of the 7 companies
are aligning their
costs by department
with an even split
between COGS and
Sales & Marketing
CSM Cost Accounting Matrix: By Department, Large Cos, S&M
Responsibility DepartmentCOGSSales&Mktg.
Large SW Cos.
Transitioned from
Renewals
Sits within Sales org
Still owns renewal
CSM Cost Accounting Matrix: By Department, COGS
Responsibility DepartmentCOGSSales&Mktg.
Transitioned from
Support
Sits within the support
org
No commercial
responsibility
Responsibility Department
COGSSales&Mktg.
CSM Cost Accounting Matrix, Responsibility
3 of the 7 companies are
aligning their costs by the
responsibility of the
resources that sit within the
Customer Success Team
Responsibility Department
COGSSales&Mktg.
CSM Cost Accounting Matrix, Responsibility, Easy Split
Responsibilities span CSM
spectrum
Responsibilities shift per
segment
50 / 50 S&M v COG split
Responsibility Department
COGSSales&Mktg.
CSM Cost Accounting Matrix, Responsibility, Easy Split
Mapped all responsibilities of
CSM as % of time
Allocates that % between
S&M v COGS
Commercial responsibility is
key delineation point
Commercial Responsibility Is Driving S&M v. COG Accounting Split
Commercial
Responsibility
Product Training
Technical Support
Strategic Advice
Contract Renewal
License Up-Sell
Product X-Sell
Support & Training SalesDepartment
Expense TypeCOGS Sales & Marketing
0% 100%
Should you Charge for Customer Success?
Omid RazaviCustomer Success
ROI Levers
The Financial Impact of Customer Success
Impact
Churn
Revenue
Expansion
Net New
Business
1 2 3
The Financial Impact of Customer Success: Churn Impact
Impact
Churn
# of customer saves
within a given time period
Lever Measurement
Save = Red to Green
shift in health score
Time Period = 6 months
before renewal
Input
The Financial Impact of Customer Success: Revenue Expansion
Revenue
Expansion
Up-sells & X-sells closed
Lever Measurement
# of closed deals
Expansion revenue
closed
Input
# of expansion leads
identified
# of leads
Average expansion
deals size
The Financial Impact of Customer Success: Net New Business
Net New
Business
Lever Increase the # of advocates
Increase # of SQLs
Increase the # of references
Increase close rate
Scott Golden
Director, Customer Success Strategy
Gainsight
Questions?
@sctgldn
sgolden@gainsight.com
How to account for customer success

More Related Content

What's hot

The Customer Success Playbooks You Need to Drive Adoption
The Customer Success Playbooks You Need to Drive AdoptionThe Customer Success Playbooks You Need to Drive Adoption
The Customer Success Playbooks You Need to Drive AdoptionAmity
 
How to Build the Ultimate Customer Success Board Presentation
How to Build the Ultimate Customer Success Board PresentationHow to Build the Ultimate Customer Success Board Presentation
How to Build the Ultimate Customer Success Board PresentationGainsight
 
Customer Success - Why and How of Gainsight's 14 Elements
Customer Success - Why and How of Gainsight's 14 ElementsCustomer Success - Why and How of Gainsight's 14 Elements
Customer Success - Why and How of Gainsight's 14 ElementsGainsight
 
Customer Success Best Practices for SaaS Retention: Metrics and KSFs for Buil...
Customer Success Best Practices for SaaS Retention: Metrics and KSFs for Buil...Customer Success Best Practices for SaaS Retention: Metrics and KSFs for Buil...
Customer Success Best Practices for SaaS Retention: Metrics and KSFs for Buil...Gainsight
 
How to Build Customer Success at an Early Stage Startup
How to Build Customer Success at an Early Stage Startup How to Build Customer Success at an Early Stage Startup
How to Build Customer Success at an Early Stage Startup Gainsight
 
Inside Gainsight’s New Post-Sales Structure: Reorganizing the Team to Drive C...
Inside Gainsight’s New Post-Sales Structure: Reorganizing the Team to Drive C...Inside Gainsight’s New Post-Sales Structure: Reorganizing the Team to Drive C...
Inside Gainsight’s New Post-Sales Structure: Reorganizing the Team to Drive C...Gainsight
 
How to Build a Powerful Renewal Playbook
How to Build a Powerful Renewal PlaybookHow to Build a Powerful Renewal Playbook
How to Build a Powerful Renewal PlaybookAmity
 
Customer Success Strategy Template
Customer Success Strategy TemplateCustomer Success Strategy Template
Customer Success Strategy TemplateOpsPanda
 
METRICS YOU SHOULD TRACK FOR AWESOME CUSTOMER SUCCESS
METRICS YOU SHOULD TRACK FOR AWESOME CUSTOMER SUCCESSMETRICS YOU SHOULD TRACK FOR AWESOME CUSTOMER SUCCESS
METRICS YOU SHOULD TRACK FOR AWESOME CUSTOMER SUCCESSTotango
 
Customer Success 101
Customer Success 101   Customer Success 101
Customer Success 101 Raj
 
Customer Success Maturity Model
Customer Success Maturity ModelCustomer Success Maturity Model
Customer Success Maturity ModelTSIA
 
QBR Playbooks That Drive Customer Accountability
QBR Playbooks That Drive Customer Accountability QBR Playbooks That Drive Customer Accountability
QBR Playbooks That Drive Customer Accountability Amity
 
SEVEN STEPS TO CUSTOMER SUCCESS AT SCALE
SEVEN STEPS TO CUSTOMER SUCCESS AT SCALESEVEN STEPS TO CUSTOMER SUCCESS AT SCALE
SEVEN STEPS TO CUSTOMER SUCCESS AT SCALETotango
 
How a Gainsight CSM uses Success Plans
How a Gainsight CSM uses Success PlansHow a Gainsight CSM uses Success Plans
How a Gainsight CSM uses Success PlansGainsight
 
Developing a World Class Customer Success Organization
Developing a World Class Customer Success Organization Developing a World Class Customer Success Organization
Developing a World Class Customer Success Organization Gainsight
 
Cross Functional Alignment Around the Customer Processes to Drive Success
Cross Functional Alignment Around the Customer Processes to Drive SuccessCross Functional Alignment Around the Customer Processes to Drive Success
Cross Functional Alignment Around the Customer Processes to Drive SuccessGainsight
 
SaaS Customer Success Framework: SignupLab's Growhow
SaaS Customer Success Framework: SignupLab's GrowhowSaaS Customer Success Framework: SignupLab's Growhow
SaaS Customer Success Framework: SignupLab's GrowhowKristian Tanninen
 
Customer Success Cubed - The Simplest Guide you will ever Find
Customer Success Cubed - The Simplest Guide you will ever FindCustomer Success Cubed - The Simplest Guide you will ever Find
Customer Success Cubed - The Simplest Guide you will ever FindTotango
 
How to Scale Your Customer Success Management Organization
How to Scale Your Customer Success Management OrganizationHow to Scale Your Customer Success Management Organization
How to Scale Your Customer Success Management OrganizationGainsight
 
Developing The Ultimate Customer Success Strategy
Developing The Ultimate Customer Success Strategy Developing The Ultimate Customer Success Strategy
Developing The Ultimate Customer Success Strategy Gainsight
 

What's hot (20)

The Customer Success Playbooks You Need to Drive Adoption
The Customer Success Playbooks You Need to Drive AdoptionThe Customer Success Playbooks You Need to Drive Adoption
The Customer Success Playbooks You Need to Drive Adoption
 
How to Build the Ultimate Customer Success Board Presentation
How to Build the Ultimate Customer Success Board PresentationHow to Build the Ultimate Customer Success Board Presentation
How to Build the Ultimate Customer Success Board Presentation
 
Customer Success - Why and How of Gainsight's 14 Elements
Customer Success - Why and How of Gainsight's 14 ElementsCustomer Success - Why and How of Gainsight's 14 Elements
Customer Success - Why and How of Gainsight's 14 Elements
 
Customer Success Best Practices for SaaS Retention: Metrics and KSFs for Buil...
Customer Success Best Practices for SaaS Retention: Metrics and KSFs for Buil...Customer Success Best Practices for SaaS Retention: Metrics and KSFs for Buil...
Customer Success Best Practices for SaaS Retention: Metrics and KSFs for Buil...
 
How to Build Customer Success at an Early Stage Startup
How to Build Customer Success at an Early Stage Startup How to Build Customer Success at an Early Stage Startup
How to Build Customer Success at an Early Stage Startup
 
Inside Gainsight’s New Post-Sales Structure: Reorganizing the Team to Drive C...
Inside Gainsight’s New Post-Sales Structure: Reorganizing the Team to Drive C...Inside Gainsight’s New Post-Sales Structure: Reorganizing the Team to Drive C...
Inside Gainsight’s New Post-Sales Structure: Reorganizing the Team to Drive C...
 
How to Build a Powerful Renewal Playbook
How to Build a Powerful Renewal PlaybookHow to Build a Powerful Renewal Playbook
How to Build a Powerful Renewal Playbook
 
Customer Success Strategy Template
Customer Success Strategy TemplateCustomer Success Strategy Template
Customer Success Strategy Template
 
METRICS YOU SHOULD TRACK FOR AWESOME CUSTOMER SUCCESS
METRICS YOU SHOULD TRACK FOR AWESOME CUSTOMER SUCCESSMETRICS YOU SHOULD TRACK FOR AWESOME CUSTOMER SUCCESS
METRICS YOU SHOULD TRACK FOR AWESOME CUSTOMER SUCCESS
 
Customer Success 101
Customer Success 101   Customer Success 101
Customer Success 101
 
Customer Success Maturity Model
Customer Success Maturity ModelCustomer Success Maturity Model
Customer Success Maturity Model
 
QBR Playbooks That Drive Customer Accountability
QBR Playbooks That Drive Customer Accountability QBR Playbooks That Drive Customer Accountability
QBR Playbooks That Drive Customer Accountability
 
SEVEN STEPS TO CUSTOMER SUCCESS AT SCALE
SEVEN STEPS TO CUSTOMER SUCCESS AT SCALESEVEN STEPS TO CUSTOMER SUCCESS AT SCALE
SEVEN STEPS TO CUSTOMER SUCCESS AT SCALE
 
How a Gainsight CSM uses Success Plans
How a Gainsight CSM uses Success PlansHow a Gainsight CSM uses Success Plans
How a Gainsight CSM uses Success Plans
 
Developing a World Class Customer Success Organization
Developing a World Class Customer Success Organization Developing a World Class Customer Success Organization
Developing a World Class Customer Success Organization
 
Cross Functional Alignment Around the Customer Processes to Drive Success
Cross Functional Alignment Around the Customer Processes to Drive SuccessCross Functional Alignment Around the Customer Processes to Drive Success
Cross Functional Alignment Around the Customer Processes to Drive Success
 
SaaS Customer Success Framework: SignupLab's Growhow
SaaS Customer Success Framework: SignupLab's GrowhowSaaS Customer Success Framework: SignupLab's Growhow
SaaS Customer Success Framework: SignupLab's Growhow
 
Customer Success Cubed - The Simplest Guide you will ever Find
Customer Success Cubed - The Simplest Guide you will ever FindCustomer Success Cubed - The Simplest Guide you will ever Find
Customer Success Cubed - The Simplest Guide you will ever Find
 
How to Scale Your Customer Success Management Organization
How to Scale Your Customer Success Management OrganizationHow to Scale Your Customer Success Management Organization
How to Scale Your Customer Success Management Organization
 
Developing The Ultimate Customer Success Strategy
Developing The Ultimate Customer Success Strategy Developing The Ultimate Customer Success Strategy
Developing The Ultimate Customer Success Strategy
 

Similar to How to account for customer success

110201 sales comp ppt
110201 sales comp ppt110201 sales comp ppt
110201 sales comp pptMassTLC
 
Customer Retention Cost Report
Customer Retention Cost ReportCustomer Retention Cost Report
Customer Retention Cost ReportTotango
 
Value Creation in SaaS Businesses
Value Creation in SaaS BusinessesValue Creation in SaaS Businesses
Value Creation in SaaS BusinessesBattery Ventures
 
Why Your Customer HealthScore is Useless and How to Overcome It
Why Your Customer HealthScore is Useless and How to Overcome ItWhy Your Customer HealthScore is Useless and How to Overcome It
Why Your Customer HealthScore is Useless and How to Overcome ItBoaz S. Maor
 
Sales levers SAM commercial reconnaissance electronic flyer July 2020
Sales levers SAM commercial reconnaissance electronic flyer July 2020Sales levers SAM commercial reconnaissance electronic flyer July 2020
Sales levers SAM commercial reconnaissance electronic flyer July 2020richardhigham
 
Customer Success Plans - Value Realization Methodologies
Customer Success Plans - Value Realization MethodologiesCustomer Success Plans - Value Realization Methodologies
Customer Success Plans - Value Realization MethodologiesShawn Hank
 
Capsim "stockholders' meeting" presentation, CSULBA FEMBA 11, August 2011
Capsim "stockholders' meeting" presentation, CSULBA FEMBA 11, August 2011Capsim "stockholders' meeting" presentation, CSULBA FEMBA 11, August 2011
Capsim "stockholders' meeting" presentation, CSULBA FEMBA 11, August 2011Will Woods
 
Marketing Operations: MObilizing Marketing For A Web 2.0 World
Marketing Operations: MObilizing Marketing For A Web 2.0 WorldMarketing Operations: MObilizing Marketing For A Web 2.0 World
Marketing Operations: MObilizing Marketing For A Web 2.0 WorldClearAction
 
Balanced Scorecard Model Powerpoint Presentation Slides
Balanced Scorecard Model Powerpoint Presentation SlidesBalanced Scorecard Model Powerpoint Presentation Slides
Balanced Scorecard Model Powerpoint Presentation SlidesSlideTeam
 
Customer Success in the Ad Tech Industry
Customer Success in the Ad Tech IndustryCustomer Success in the Ad Tech Industry
Customer Success in the Ad Tech IndustryGainsight
 
Semi Standard Structured Report PowerPoint Presentation Slides
Semi Standard Structured Report PowerPoint Presentation SlidesSemi Standard Structured Report PowerPoint Presentation Slides
Semi Standard Structured Report PowerPoint Presentation SlidesSlideTeam
 
Understanding the Financial Health of your Subscription Business
Understanding the Financial Health of your Subscription BusinessUnderstanding the Financial Health of your Subscription Business
Understanding the Financial Health of your Subscription BusinessTotango
 

Similar to How to account for customer success (20)

Ibm crm
Ibm crmIbm crm
Ibm crm
 
Ibm crm
Ibm crmIbm crm
Ibm crm
 
110201 sales comp ppt
110201 sales comp ppt110201 sales comp ppt
110201 sales comp ppt
 
Magnify AIMS presentation 2014
Magnify AIMS presentation 2014Magnify AIMS presentation 2014
Magnify AIMS presentation 2014
 
Customer Retention Cost Report
Customer Retention Cost ReportCustomer Retention Cost Report
Customer Retention Cost Report
 
Value Creation in SaaS Businesses
Value Creation in SaaS BusinessesValue Creation in SaaS Businesses
Value Creation in SaaS Businesses
 
Why Your Customer HealthScore is Useless and How to Overcome It
Why Your Customer HealthScore is Useless and How to Overcome ItWhy Your Customer HealthScore is Useless and How to Overcome It
Why Your Customer HealthScore is Useless and How to Overcome It
 
Sales levers SAM commercial reconnaissance electronic flyer July 2020
Sales levers SAM commercial reconnaissance electronic flyer July 2020Sales levers SAM commercial reconnaissance electronic flyer July 2020
Sales levers SAM commercial reconnaissance electronic flyer July 2020
 
Customer Success Plans - Value Realization Methodologies
Customer Success Plans - Value Realization MethodologiesCustomer Success Plans - Value Realization Methodologies
Customer Success Plans - Value Realization Methodologies
 
Capsim "stockholders' meeting" presentation, CSULBA FEMBA 11, August 2011
Capsim "stockholders' meeting" presentation, CSULBA FEMBA 11, August 2011Capsim "stockholders' meeting" presentation, CSULBA FEMBA 11, August 2011
Capsim "stockholders' meeting" presentation, CSULBA FEMBA 11, August 2011
 
CRM Creating Customer Advoacates[1]
CRM Creating Customer Advoacates[1]CRM Creating Customer Advoacates[1]
CRM Creating Customer Advoacates[1]
 
Marketing Operations: MObilizing Marketing For A Web 2.0 World
Marketing Operations: MObilizing Marketing For A Web 2.0 WorldMarketing Operations: MObilizing Marketing For A Web 2.0 World
Marketing Operations: MObilizing Marketing For A Web 2.0 World
 
Reaptransform
ReaptransformReaptransform
Reaptransform
 
Balanced Scorecard Model Powerpoint Presentation Slides
Balanced Scorecard Model Powerpoint Presentation SlidesBalanced Scorecard Model Powerpoint Presentation Slides
Balanced Scorecard Model Powerpoint Presentation Slides
 
crm
crmcrm
crm
 
Customer Success in the Ad Tech Industry
Customer Success in the Ad Tech IndustryCustomer Success in the Ad Tech Industry
Customer Success in the Ad Tech Industry
 
Keys to Success
Keys to SuccessKeys to Success
Keys to Success
 
Semi Standard Structured Report PowerPoint Presentation Slides
Semi Standard Structured Report PowerPoint Presentation SlidesSemi Standard Structured Report PowerPoint Presentation Slides
Semi Standard Structured Report PowerPoint Presentation Slides
 
Understanding the Financial Health of your Subscription Business
Understanding the Financial Health of your Subscription BusinessUnderstanding the Financial Health of your Subscription Business
Understanding the Financial Health of your Subscription Business
 
Strategic Planning_DF13_Final
Strategic Planning_DF13_FinalStrategic Planning_DF13_Final
Strategic Planning_DF13_Final
 

More from Gainsight

How to Evolve Your Health Score From Reactive to Predictive
How to Evolve Your Health Score From Reactive to PredictiveHow to Evolve Your Health Score From Reactive to Predictive
How to Evolve Your Health Score From Reactive to PredictiveGainsight
 
How to Better Align Professional Services to Customer Success
How to Better Align Professional Services to Customer SuccessHow to Better Align Professional Services to Customer Success
How to Better Align Professional Services to Customer SuccessGainsight
 
How Box Scaled to Millions of Engagements Using Tech Touch
 How Box Scaled to Millions of Engagements Using Tech Touch How Box Scaled to Millions of Engagements Using Tech Touch
How Box Scaled to Millions of Engagements Using Tech TouchGainsight
 
How to Design a Value-Based Renewal Management Process
 How to Design a Value-Based Renewal Management Process How to Design a Value-Based Renewal Management Process
How to Design a Value-Based Renewal Management ProcessGainsight
 
How to Build an End-to-End Process for Defining and Delivering on Outcomes
How to Build an End-to-End Process for Defining and Delivering on OutcomesHow to Build an End-to-End Process for Defining and Delivering on Outcomes
How to Build an End-to-End Process for Defining and Delivering on OutcomesGainsight
 
How to Institutionalize Feedback at Every Stage of Your Customer Journey Beyo...
How to Institutionalize Feedback at Every Stage of Your Customer Journey Beyo...How to Institutionalize Feedback at Every Stage of Your Customer Journey Beyo...
How to Institutionalize Feedback at Every Stage of Your Customer Journey Beyo...Gainsight
 
The Science of Customer Success
The Science of Customer SuccessThe Science of Customer Success
The Science of Customer SuccessGainsight
 
How to Build a Customer Journey That's Outside-In not Inside-Out
How to Build a Customer Journey That's Outside-In not Inside-OutHow to Build a Customer Journey That's Outside-In not Inside-Out
How to Build a Customer Journey That's Outside-In not Inside-OutGainsight
 
How to Turbocharge Your Customer Insights While Making Them More Digestible f...
How to Turbocharge Your Customer Insights While Making Them More Digestible f...How to Turbocharge Your Customer Insights While Making Them More Digestible f...
How to Turbocharge Your Customer Insights While Making Them More Digestible f...Gainsight
 
The Age of the Customer, 2018
The Age of the Customer, 2018The Age of the Customer, 2018
The Age of the Customer, 2018Gainsight
 
How to Create Healthy Customers in Healthcare IT: Inside Imprivata’s Customer...
How to Create Healthy Customers in Healthcare IT: Inside Imprivata’s Customer...How to Create Healthy Customers in Healthcare IT: Inside Imprivata’s Customer...
How to Create Healthy Customers in Healthcare IT: Inside Imprivata’s Customer...Gainsight
 
Customer Success = Customer Outcomes + Customer Experience
Customer Success = Customer Outcomes + Customer ExperienceCustomer Success = Customer Outcomes + Customer Experience
Customer Success = Customer Outcomes + Customer ExperienceGainsight
 
How to leverage customer marketing to drive sales
How to leverage customer marketing to drive salesHow to leverage customer marketing to drive sales
How to leverage customer marketing to drive salesGainsight
 
Aligning Sales and Customer Success
Aligning Sales and Customer SuccessAligning Sales and Customer Success
Aligning Sales and Customer SuccessGainsight
 
How to Unleash the Hidden Value of a Best Practices Voice of the Customer Pro...
How to Unleash the Hidden Value of a Best Practices Voice of the Customer Pro...How to Unleash the Hidden Value of a Best Practices Voice of the Customer Pro...
How to Unleash the Hidden Value of a Best Practices Voice of the Customer Pro...Gainsight
 
SaaS.City 2017 Customer Success Bootcamp
SaaS.City 2017 Customer Success BootcampSaaS.City 2017 Customer Success Bootcamp
SaaS.City 2017 Customer Success BootcampGainsight
 
Customer Success Showcase: How IBM Exponentially Increased Customer Adoption ...
Customer Success Showcase: How IBM Exponentially Increased Customer Adoption ...Customer Success Showcase: How IBM Exponentially Increased Customer Adoption ...
Customer Success Showcase: How IBM Exponentially Increased Customer Adoption ...Gainsight
 
How to Budget for Customer Success
How to Budget for Customer SuccessHow to Budget for Customer Success
How to Budget for Customer SuccessGainsight
 
Tiering, prioritising, and segmenting your customers
Tiering, prioritising, and segmenting your customersTiering, prioritising, and segmenting your customers
Tiering, prioritising, and segmenting your customersGainsight
 
Tiering, Prioritising, and Segmenting Your Customers
Tiering, Prioritising, and Segmenting Your CustomersTiering, Prioritising, and Segmenting Your Customers
Tiering, Prioritising, and Segmenting Your CustomersGainsight
 

More from Gainsight (20)

How to Evolve Your Health Score From Reactive to Predictive
How to Evolve Your Health Score From Reactive to PredictiveHow to Evolve Your Health Score From Reactive to Predictive
How to Evolve Your Health Score From Reactive to Predictive
 
How to Better Align Professional Services to Customer Success
How to Better Align Professional Services to Customer SuccessHow to Better Align Professional Services to Customer Success
How to Better Align Professional Services to Customer Success
 
How Box Scaled to Millions of Engagements Using Tech Touch
 How Box Scaled to Millions of Engagements Using Tech Touch How Box Scaled to Millions of Engagements Using Tech Touch
How Box Scaled to Millions of Engagements Using Tech Touch
 
How to Design a Value-Based Renewal Management Process
 How to Design a Value-Based Renewal Management Process How to Design a Value-Based Renewal Management Process
How to Design a Value-Based Renewal Management Process
 
How to Build an End-to-End Process for Defining and Delivering on Outcomes
How to Build an End-to-End Process for Defining and Delivering on OutcomesHow to Build an End-to-End Process for Defining and Delivering on Outcomes
How to Build an End-to-End Process for Defining and Delivering on Outcomes
 
How to Institutionalize Feedback at Every Stage of Your Customer Journey Beyo...
How to Institutionalize Feedback at Every Stage of Your Customer Journey Beyo...How to Institutionalize Feedback at Every Stage of Your Customer Journey Beyo...
How to Institutionalize Feedback at Every Stage of Your Customer Journey Beyo...
 
The Science of Customer Success
The Science of Customer SuccessThe Science of Customer Success
The Science of Customer Success
 
How to Build a Customer Journey That's Outside-In not Inside-Out
How to Build a Customer Journey That's Outside-In not Inside-OutHow to Build a Customer Journey That's Outside-In not Inside-Out
How to Build a Customer Journey That's Outside-In not Inside-Out
 
How to Turbocharge Your Customer Insights While Making Them More Digestible f...
How to Turbocharge Your Customer Insights While Making Them More Digestible f...How to Turbocharge Your Customer Insights While Making Them More Digestible f...
How to Turbocharge Your Customer Insights While Making Them More Digestible f...
 
The Age of the Customer, 2018
The Age of the Customer, 2018The Age of the Customer, 2018
The Age of the Customer, 2018
 
How to Create Healthy Customers in Healthcare IT: Inside Imprivata’s Customer...
How to Create Healthy Customers in Healthcare IT: Inside Imprivata’s Customer...How to Create Healthy Customers in Healthcare IT: Inside Imprivata’s Customer...
How to Create Healthy Customers in Healthcare IT: Inside Imprivata’s Customer...
 
Customer Success = Customer Outcomes + Customer Experience
Customer Success = Customer Outcomes + Customer ExperienceCustomer Success = Customer Outcomes + Customer Experience
Customer Success = Customer Outcomes + Customer Experience
 
How to leverage customer marketing to drive sales
How to leverage customer marketing to drive salesHow to leverage customer marketing to drive sales
How to leverage customer marketing to drive sales
 
Aligning Sales and Customer Success
Aligning Sales and Customer SuccessAligning Sales and Customer Success
Aligning Sales and Customer Success
 
How to Unleash the Hidden Value of a Best Practices Voice of the Customer Pro...
How to Unleash the Hidden Value of a Best Practices Voice of the Customer Pro...How to Unleash the Hidden Value of a Best Practices Voice of the Customer Pro...
How to Unleash the Hidden Value of a Best Practices Voice of the Customer Pro...
 
SaaS.City 2017 Customer Success Bootcamp
SaaS.City 2017 Customer Success BootcampSaaS.City 2017 Customer Success Bootcamp
SaaS.City 2017 Customer Success Bootcamp
 
Customer Success Showcase: How IBM Exponentially Increased Customer Adoption ...
Customer Success Showcase: How IBM Exponentially Increased Customer Adoption ...Customer Success Showcase: How IBM Exponentially Increased Customer Adoption ...
Customer Success Showcase: How IBM Exponentially Increased Customer Adoption ...
 
How to Budget for Customer Success
How to Budget for Customer SuccessHow to Budget for Customer Success
How to Budget for Customer Success
 
Tiering, prioritising, and segmenting your customers
Tiering, prioritising, and segmenting your customersTiering, prioritising, and segmenting your customers
Tiering, prioritising, and segmenting your customers
 
Tiering, Prioritising, and Segmenting Your Customers
Tiering, Prioritising, and Segmenting Your CustomersTiering, Prioritising, and Segmenting Your Customers
Tiering, Prioritising, and Segmenting Your Customers
 

Recently uploaded

Introduction to Quantum Computing
Introduction to Quantum ComputingIntroduction to Quantum Computing
Introduction to Quantum ComputingGDSC PJATK
 
Empowering Africa's Next Generation: The AI Leadership Blueprint
Empowering Africa's Next Generation: The AI Leadership BlueprintEmpowering Africa's Next Generation: The AI Leadership Blueprint
Empowering Africa's Next Generation: The AI Leadership BlueprintMahmoud Rabie
 
Artificial Intelligence & SEO Trends for 2024
Artificial Intelligence & SEO Trends for 2024Artificial Intelligence & SEO Trends for 2024
Artificial Intelligence & SEO Trends for 2024D Cloud Solutions
 
Bird eye's view on Camunda open source ecosystem
Bird eye's view on Camunda open source ecosystemBird eye's view on Camunda open source ecosystem
Bird eye's view on Camunda open source ecosystemAsko Soukka
 
Meet the new FSP 3000 M-Flex800™
Meet the new FSP 3000 M-Flex800™Meet the new FSP 3000 M-Flex800™
Meet the new FSP 3000 M-Flex800™Adtran
 
9 Steps For Building Winning Founding Team
9 Steps For Building Winning Founding Team9 Steps For Building Winning Founding Team
9 Steps For Building Winning Founding TeamAdam Moalla
 
KubeConEU24-Monitoring Kubernetes and Cloud Spend with OpenCost
KubeConEU24-Monitoring Kubernetes and Cloud Spend with OpenCostKubeConEU24-Monitoring Kubernetes and Cloud Spend with OpenCost
KubeConEU24-Monitoring Kubernetes and Cloud Spend with OpenCostMatt Ray
 
Crea il tuo assistente AI con lo Stregatto (open source python framework)
Crea il tuo assistente AI con lo Stregatto (open source python framework)Crea il tuo assistente AI con lo Stregatto (open source python framework)
Crea il tuo assistente AI con lo Stregatto (open source python framework)Commit University
 
Do we need a new standard for visualizing the invisible?
Do we need a new standard for visualizing the invisible?Do we need a new standard for visualizing the invisible?
Do we need a new standard for visualizing the invisible?SANGHEE SHIN
 
Connector Corner: Extending LLM automation use cases with UiPath GenAI connec...
Connector Corner: Extending LLM automation use cases with UiPath GenAI connec...Connector Corner: Extending LLM automation use cases with UiPath GenAI connec...
Connector Corner: Extending LLM automation use cases with UiPath GenAI connec...DianaGray10
 
Nanopower In Semiconductor Industry.pdf
Nanopower  In Semiconductor Industry.pdfNanopower  In Semiconductor Industry.pdf
Nanopower In Semiconductor Industry.pdfPedro Manuel
 
Videogame localization & technology_ how to enhance the power of translation.pdf
Videogame localization & technology_ how to enhance the power of translation.pdfVideogame localization & technology_ how to enhance the power of translation.pdf
Videogame localization & technology_ how to enhance the power of translation.pdfinfogdgmi
 
UWB Technology for Enhanced Indoor and Outdoor Positioning in Physiological M...
UWB Technology for Enhanced Indoor and Outdoor Positioning in Physiological M...UWB Technology for Enhanced Indoor and Outdoor Positioning in Physiological M...
UWB Technology for Enhanced Indoor and Outdoor Positioning in Physiological M...UbiTrack UK
 
Linked Data in Production: Moving Beyond Ontologies
Linked Data in Production: Moving Beyond OntologiesLinked Data in Production: Moving Beyond Ontologies
Linked Data in Production: Moving Beyond OntologiesDavid Newbury
 
UiPath Platform: The Backend Engine Powering Your Automation - Session 1
UiPath Platform: The Backend Engine Powering Your Automation - Session 1UiPath Platform: The Backend Engine Powering Your Automation - Session 1
UiPath Platform: The Backend Engine Powering Your Automation - Session 1DianaGray10
 
How to Effectively Monitor SD-WAN and SASE Environments with ThousandEyes
How to Effectively Monitor SD-WAN and SASE Environments with ThousandEyesHow to Effectively Monitor SD-WAN and SASE Environments with ThousandEyes
How to Effectively Monitor SD-WAN and SASE Environments with ThousandEyesThousandEyes
 
COMPUTER 10 Lesson 8 - Building a Website
COMPUTER 10 Lesson 8 - Building a WebsiteCOMPUTER 10 Lesson 8 - Building a Website
COMPUTER 10 Lesson 8 - Building a Websitedgelyza
 
RAG Patterns and Vector Search in Generative AI
RAG Patterns and Vector Search in Generative AIRAG Patterns and Vector Search in Generative AI
RAG Patterns and Vector Search in Generative AIUdaiappa Ramachandran
 
IESVE Software for Florida Code Compliance Using ASHRAE 90.1-2019
IESVE Software for Florida Code Compliance Using ASHRAE 90.1-2019IESVE Software for Florida Code Compliance Using ASHRAE 90.1-2019
IESVE Software for Florida Code Compliance Using ASHRAE 90.1-2019IES VE
 
Introduction to Matsuo Laboratory (ENG).pptx
Introduction to Matsuo Laboratory (ENG).pptxIntroduction to Matsuo Laboratory (ENG).pptx
Introduction to Matsuo Laboratory (ENG).pptxMatsuo Lab
 

Recently uploaded (20)

Introduction to Quantum Computing
Introduction to Quantum ComputingIntroduction to Quantum Computing
Introduction to Quantum Computing
 
Empowering Africa's Next Generation: The AI Leadership Blueprint
Empowering Africa's Next Generation: The AI Leadership BlueprintEmpowering Africa's Next Generation: The AI Leadership Blueprint
Empowering Africa's Next Generation: The AI Leadership Blueprint
 
Artificial Intelligence & SEO Trends for 2024
Artificial Intelligence & SEO Trends for 2024Artificial Intelligence & SEO Trends for 2024
Artificial Intelligence & SEO Trends for 2024
 
Bird eye's view on Camunda open source ecosystem
Bird eye's view on Camunda open source ecosystemBird eye's view on Camunda open source ecosystem
Bird eye's view on Camunda open source ecosystem
 
Meet the new FSP 3000 M-Flex800™
Meet the new FSP 3000 M-Flex800™Meet the new FSP 3000 M-Flex800™
Meet the new FSP 3000 M-Flex800™
 
9 Steps For Building Winning Founding Team
9 Steps For Building Winning Founding Team9 Steps For Building Winning Founding Team
9 Steps For Building Winning Founding Team
 
KubeConEU24-Monitoring Kubernetes and Cloud Spend with OpenCost
KubeConEU24-Monitoring Kubernetes and Cloud Spend with OpenCostKubeConEU24-Monitoring Kubernetes and Cloud Spend with OpenCost
KubeConEU24-Monitoring Kubernetes and Cloud Spend with OpenCost
 
Crea il tuo assistente AI con lo Stregatto (open source python framework)
Crea il tuo assistente AI con lo Stregatto (open source python framework)Crea il tuo assistente AI con lo Stregatto (open source python framework)
Crea il tuo assistente AI con lo Stregatto (open source python framework)
 
Do we need a new standard for visualizing the invisible?
Do we need a new standard for visualizing the invisible?Do we need a new standard for visualizing the invisible?
Do we need a new standard for visualizing the invisible?
 
Connector Corner: Extending LLM automation use cases with UiPath GenAI connec...
Connector Corner: Extending LLM automation use cases with UiPath GenAI connec...Connector Corner: Extending LLM automation use cases with UiPath GenAI connec...
Connector Corner: Extending LLM automation use cases with UiPath GenAI connec...
 
Nanopower In Semiconductor Industry.pdf
Nanopower  In Semiconductor Industry.pdfNanopower  In Semiconductor Industry.pdf
Nanopower In Semiconductor Industry.pdf
 
Videogame localization & technology_ how to enhance the power of translation.pdf
Videogame localization & technology_ how to enhance the power of translation.pdfVideogame localization & technology_ how to enhance the power of translation.pdf
Videogame localization & technology_ how to enhance the power of translation.pdf
 
UWB Technology for Enhanced Indoor and Outdoor Positioning in Physiological M...
UWB Technology for Enhanced Indoor and Outdoor Positioning in Physiological M...UWB Technology for Enhanced Indoor and Outdoor Positioning in Physiological M...
UWB Technology for Enhanced Indoor and Outdoor Positioning in Physiological M...
 
Linked Data in Production: Moving Beyond Ontologies
Linked Data in Production: Moving Beyond OntologiesLinked Data in Production: Moving Beyond Ontologies
Linked Data in Production: Moving Beyond Ontologies
 
UiPath Platform: The Backend Engine Powering Your Automation - Session 1
UiPath Platform: The Backend Engine Powering Your Automation - Session 1UiPath Platform: The Backend Engine Powering Your Automation - Session 1
UiPath Platform: The Backend Engine Powering Your Automation - Session 1
 
How to Effectively Monitor SD-WAN and SASE Environments with ThousandEyes
How to Effectively Monitor SD-WAN and SASE Environments with ThousandEyesHow to Effectively Monitor SD-WAN and SASE Environments with ThousandEyes
How to Effectively Monitor SD-WAN and SASE Environments with ThousandEyes
 
COMPUTER 10 Lesson 8 - Building a Website
COMPUTER 10 Lesson 8 - Building a WebsiteCOMPUTER 10 Lesson 8 - Building a Website
COMPUTER 10 Lesson 8 - Building a Website
 
RAG Patterns and Vector Search in Generative AI
RAG Patterns and Vector Search in Generative AIRAG Patterns and Vector Search in Generative AI
RAG Patterns and Vector Search in Generative AI
 
IESVE Software for Florida Code Compliance Using ASHRAE 90.1-2019
IESVE Software for Florida Code Compliance Using ASHRAE 90.1-2019IESVE Software for Florida Code Compliance Using ASHRAE 90.1-2019
IESVE Software for Florida Code Compliance Using ASHRAE 90.1-2019
 
Introduction to Matsuo Laboratory (ENG).pptx
Introduction to Matsuo Laboratory (ENG).pptxIntroduction to Matsuo Laboratory (ENG).pptx
Introduction to Matsuo Laboratory (ENG).pptx
 

How to account for customer success

  • 1. How to Account for Customer Success
  • 2. Should you Charge for Customer Success? Omid Razavi Scott Golden Director, Customer Success Strategy Gainsight
  • 3. Should you Charge for Customer Success? Omid Razavi Today’s Agenda 1. Customer Success Costs • Segmentation Strategy • CSM Coverage Ratios • Emerging CS Roles • Aggregate CS Team Costs 2. Accounting for CS Costs • Industry Strategies • ROI of Customer Success • Impact Levers 3. ROI of Customer Success • Impact Levers
  • 4. Should you Charge for Customer Success? Omid Razavi Segmentation Strategy
  • 5. Your Customers Dictate Your Coverage Model STRATEGYSEGMENT High Touch Mid Touch Tech Touch ENTERPRISE MID- MARKET SMB PROACTIVE JUST-IN-TIME AUTOMATED
  • 6. Customer Base Segmentation Strategy Primary Segmentation Levers Customer Segment # 20% 54% 17% 6% 4% <3 3 4 5 >5 Annual Recurring Revenue is still the best proxy for CSM workload 13% 15% 72% Customer Count Other ARR $
  • 7. Should you Charge for Customer Success? Omid Razavi CSM Coverage Ratio Benchmarks
  • 8. High-Dollar / Enterprise Segment Ratios Annual Recurring Revenue 7% 4% 22% 35% 20% 9% 2% > $20M $20M - $10M $10M - $5M $5M - $2M $2M -$1M $1M - $500K < $500K 0% 0% 4% 43% 52% 0% 2% > 500 500 - 250 250 - 100 100 - 50 50 - 10 10 - 5 < 5 Customers 69% 95%
  • 9. Med-Dollar / Mid-Market Segment Ratios 5% 7% 7% 38% 24% 16% 2% > $20M $20M - $10M $10M - $5M $5M - $2M $2M -$1M $1M - $500K < $500K 0% 46% 15% 37% 0% 0% 2% > 500 500 - 250 250 - 100 100 - 50 50 - 10 10 - 5 < 5 Annual Recurring Revenue Customers 78% 98%
  • 10. Small-Dollar / SMB Segment Ratios 7% 7% 13% 19% 24% 13% 17% > $20M $20M - $10M $10M - $5M $5M - $2M $2M -$1M $1M - $500K < $500K 20% 17% 24% 15% 17% 0% 7% > 500 500 - 250 250 - 100 100 - 50 50 - 10 10 - 5 < 5 Annual Recurring Revenue Customers 69% (Impact of Customer Marketing Role) 61%
  • 11. Should you Charge for Customer Success? Omid RazaviEmerging Customer Success Roles
  • 12. Emerging Roles Within Customer Success Yes 60% No 40% Renewal Resources Yes 61% No 39% Solution Architects No 54% Yes 46% Customer Marketing No 53% Yes 47% Success Operations This person is typically hired after acquiring more than 150 customers It is a must-have role if the Customer Success Team owns or forecasts the retention and expansion number These types of resources are typically “floaters” that will help drive a project if the needs are beyond a CSM’s technical capabilities This role will continue to grow in prominence; our data shows Customer Success Teams have doubled in prominence over the last 12 months The Operations role is key once you have invested in a Customer Success platform and your processes mature from reactive or gut-feel to data-driven
  • 13. Should you Charge for Customer Success? Omid Razavi Aggregate CSM Team Costs
  • 14. >$100M ARR Organizations Customer Success Costs as a % of Annual Recurring Revenue 11% 0% 6% 0% 22% 22% 39% >30% 30% - 25% 25% - 20% 20% - 15% 15% - 10% 10% - 5% <5% Solve for <10%
  • 15. <$100M to >$10M ARR Organizations 0% 0% 0% 6% 29% 29% 35% >30% 30% - 25% 25% - 20% 20% - 15% 15% - 10% 10% - 5% <5% Customer Success Costs as a % of Annual Recurring Revenue Solve for <15%
  • 16. <$10M ARR Organizations Customer Success Costs as a % of Annual Recurring Revenue 13% 13% 13% 13% 25% 13% 13% >30% 30% - 25% 25% - 20% 20% - 15% 15% - 10% 10% - 5% <5% Over-investing in Customer Success to protect their most precious asset: customers
  • 17. Should you Charge for Customer Success? Omid RazaviAccounting For Customer Success Costs
  • 18. CSM Cost Accounting Matrix Responsibility Department COGSSales&Mktg.
  • 19. CSM Cost Accounting Matrix: By Department Responsibility DepartmentCOGSSales&Mktg. 4 of the 7 companies are aligning their costs by department with an even split between COGS and Sales & Marketing
  • 20. CSM Cost Accounting Matrix: By Department, Large Cos, S&M Responsibility DepartmentCOGSSales&Mktg. Large SW Cos. Transitioned from Renewals Sits within Sales org Still owns renewal
  • 21. CSM Cost Accounting Matrix: By Department, COGS Responsibility DepartmentCOGSSales&Mktg. Transitioned from Support Sits within the support org No commercial responsibility
  • 22. Responsibility Department COGSSales&Mktg. CSM Cost Accounting Matrix, Responsibility 3 of the 7 companies are aligning their costs by the responsibility of the resources that sit within the Customer Success Team
  • 23. Responsibility Department COGSSales&Mktg. CSM Cost Accounting Matrix, Responsibility, Easy Split Responsibilities span CSM spectrum Responsibilities shift per segment 50 / 50 S&M v COG split
  • 24. Responsibility Department COGSSales&Mktg. CSM Cost Accounting Matrix, Responsibility, Easy Split Mapped all responsibilities of CSM as % of time Allocates that % between S&M v COGS Commercial responsibility is key delineation point
  • 25. Commercial Responsibility Is Driving S&M v. COG Accounting Split Commercial Responsibility Product Training Technical Support Strategic Advice Contract Renewal License Up-Sell Product X-Sell Support & Training SalesDepartment Expense TypeCOGS Sales & Marketing 0% 100%
  • 26. Should you Charge for Customer Success? Omid RazaviCustomer Success ROI Levers
  • 27. The Financial Impact of Customer Success Impact Churn Revenue Expansion Net New Business 1 2 3
  • 28. The Financial Impact of Customer Success: Churn Impact Impact Churn # of customer saves within a given time period Lever Measurement Save = Red to Green shift in health score Time Period = 6 months before renewal Input
  • 29. The Financial Impact of Customer Success: Revenue Expansion Revenue Expansion Up-sells & X-sells closed Lever Measurement # of closed deals Expansion revenue closed Input # of expansion leads identified # of leads Average expansion deals size
  • 30. The Financial Impact of Customer Success: Net New Business Net New Business Lever Increase the # of advocates Increase # of SQLs Increase the # of references Increase close rate
  • 31. Scott Golden Director, Customer Success Strategy Gainsight Questions? @sctgldn sgolden@gainsight.com