Customer Success By the Numbers: Benchmarks & KPI's for Your Team

Arsham Memarzadeh & Brandon Hickie
CUSTOMER SUCCESS BY THE NUMBERS:
BENCHMARKS & KPI'S FOR YOUR TEAM

CUSTOMER SUCCESS BY THE
NUMBERS: BENCHMARKS & KPI'S FOR
YOUR TEAM
Arsham Memarzadeh
@arshammem
Brandon Hickie
@bhickie

CUSTOMER SUCCESS EFFECTS
THE TOP LINE

PERFORMANCE ENHANCEMENTS THAT ARE LEGAL
↑ Revenue
Growth Rate
↑ Revenue
Multiple
↑ S&M Spend as
% of Revenue
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved

S&M SPEND DRIVES REVENUE GROWTH
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 5

NET RETENTION DRIVES REVENUE MULTIPLES
6Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved

7
GROWING FROM WITHIN IS MORE EFFICIENT
$0.28 $1.18
Cost to Upsell
$1 in ACV
Cost to Acquire
$1 in ACV
4x ROI
Source: Pac Crest 2015 SaaS Survey

FEW CUSTOMER SUCCESS TEAMS CONSIDER
EXPANSION A TOP OBJECTIVE
9
Source: 2015 Totango Customer Success Survey. 768 Respondents
57% Product Adoption
55% Churn Reduction
47% Onboarding
42% Customer Advocacy
39% Customer Support
20% Upsell

FEW CUSTOMER SUCCESS TEAMS CONSIDER
EXPANSION A TOP OBJECTIVE
10
57% Product Adoption
55% Churn Reduction
47% Onboarding
42% Customer Advocacy
39% Customer Support
20% Upsell

GREAT COMPANIES
INSTRUMENT THEIR BUSINESS

BENEFITS OF BENCHMARKING
FOR CUSTOMER SUCCESS

13
“Talent wins games, but
teamwork and intelligence
wins championships.”
-Michael Jordan
CLEAR OBJECTIVES & A SHARED VISION

14
TRANSPARENCY & OBJECTIVITY
“Setting goals is the first
step in turning the invisible
into the visible.”
-Tony Robbins

15
CROSS-FUNCTIONAL ALIGNMENT & CLEAR ROLES
“The achievements of an organization are
the results of the combined effort of each
individual.”
Vince Lombardi

16
IDENTIFY & PRIORITIZE IMPROVEMENT IDEAS

USE METRICS TO BUILD AND MEASURE YOUR TEAM
Reward your reps
accordingly
Corporate Structural Compensation
Average Salaries
Compensation
Structure
Retention vs. Upsell vs.
New Bookings
Set and track
goals
Net retention
Time from booking to
implementation
Customer retention cost
Metrics to build
your team
When do you hire your
first CS leader?
How many CS reps by
company stage?
Frequency of customer
engagement

CORPORATE METRICS
1. Net dollar retention
2. Upsell/cross-sell as % of
revenue
3. Net promoter score

NET DOLLAR RETENTION BENCHMARKS
103%
Net Dollar
Retention
108%
Net Dollar
Retention
Transactional Sales
Models
Enterprise Sales
Models
= total revenue from Customers T2 / Total Revenue from Customers T1

UPSELL/CROSS SELL REVENUE CONTRIBUTIONS
HOVER AT 19%
19%
of revenue attributed
to upsell / cross-sell
16% 21%
19%
overall
median
Early
stage
Growth
stage
• Companies with between $3-5m ARR attribute ~16% of
revenue to cross-/up-sell
• Number increases as company scales
• Caps off at ~21%
Upsell / Cross-sell as % of Revenue

21
COST TO RENEW $1 IN ARR = 13 CENTS
$0.13 $0.28
Cost to retain
$1 in ACV
Cost to upsell
$1 in ACV
$0.07 $0.33
$0.13
2015
median
Cost to Renew $1 in ARR:
CRC =
CSMs/AMs/
Support
Mgmt & Ops
OTE
Engagement
Programs
Recurring Costs
(infrastructure)
Overhead
Source: Pac Crest 2015 SaaS Survey

STRUCTURAL METRICS
1. When do you hire your first leader?
2. Number of customers managed per rep
3. ARR per CSM
4. Frequency of customer engagement

23
HIRE CS LEADER BEFORE $1M ARR
22%
30%
14%
24%
5% 5%
0%
3%
12%
21%
35%
6% 6%
18%
0%
5%
10%
15%
20%
25%
30%
35%
40%
<$100K $100K-$500K $501K-$1M $1.1M-$5M $5.1M-$10M $10.1M-$20M >$20M
Stage you hire your first CS Leader
Top 50% growers Bottom 50% growers
Note: excludes companies with less than $1M ARR
65%+ of fastest growing
companies hire CS leader
before $1M ARR
63% of slower companies
hire leader after $1M ARR

24
TEAM GROWTH BENCHMARKS
1CSM:$2M
MEDIAN CUSTOMERS MANAGED PER
CS MANAGER
ARR PER CS MANAGER
63
12
TRANSACTIONAL SALES MODEL ENTERPRISE SALES MODEL
1CSM:$2M

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
TRANSACTIONAL
SALES MODEL
ENTERPRISE SALES
MODEL
RULE OF THUMB: ENGAGE YOUR CUSTOMERS AT
LEAST EVERY MONTH
FREQUENCY OF CUSTOMER
ENGAGEMENT
Passive
Weekly
½ Year
Quarterly
Monthly
Passive
Weekly
Quarterly
Monthly
57%
engage their
customers at
least every
month
85%
engage their
customers at
least every
month
Transactional Sales
Models
Enterprise Sales
Models

COMPENSATION METRICS
1. Upsell / cross-sell vs. new bookings comp
2. Retention vs. new bookings comp
3. Average salary per CSM

TEAM COMPENSATION AND COMP STRUCTURE
$87,500
$137,500
$162,500
Customer Success
Manager
Director of Customer
Success
VP of Customer
Success
Median CS Compensation by Title
9%
11%
54%
26%
Compensation Structure
Base Salary + Bonus + Commission
Base Salary + Commission
Base Salary + Bonus
Base Salary Only

UPSELL COMP IS ~SAME AS NEW BOOKINGS;
RENEWAL COMP IS LOWER
39%
Pay the same
for renewals
as they do
new bookings
68%
Pay the same for
upsells as they
do new bookings
0% 10% 20% 30% 40% 50% 60% 70%
Less than a new booking of the same size
More than a new booking of the same size
Same as a new booking of the same size
We don’t pay commission to sales reps on
renewals
Upsell and Renewals Commission
Upsells Renewals

WHAT METRICS MAKE SENSE FOR YOUR
ORGANIZATION
Key is to stay focused on no more than three metrics at a time
For more download our ebook on Building Your Customer Success Strategy

"We must … put customer
success at the heart of what
we do. We want customers
for life, and if we can’t
reasonably expect to make a
customer successful, we
shouldn’t sign them in the
first place.”
David Sacks CEO at Zenefits & Co-Founder of
Yammer

Customer Success By the Numbers: Benchmarks & KPI's for Your Team

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Customer Success By the Numbers: Benchmarks & KPI's for Your Team

Similar to Customer Success By the Numbers: Benchmarks & KPI's for Your Team (20)

Recently uploaded

Recently uploaded (20)

Customer Success By the Numbers: Benchmarks & KPI's for Your Team

Editor's Notes