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©2015 Gainsight. All Rights Reserved.
Child-like Joy
Best Practices in CSM Compensation
with Customer Success Leaders
Scot...
©2015 Gainsight. All Rights Reserved.
The CSM Industry is Growing and Attracting Great Talent
1-5! 5-10! 10-20! 20-30! >30...
©2015 Gainsight. All Rights Reserved.
United States - Average
Compensation by Role!
Rest of World - Average
Compensation b...
©2015 Gainsight. All Rights Reserved.
Managerial Responsibility by Title
100%! 98%! 95%!
47%!
20%!
6%!
CxO! VP! Director! ...
©2015 Gainsight. All Rights Reserved.
Current Compensation Levers for Customer Success
Customers Managed!
Revenue Managed!...
©2015 Gainsight. All Rights Reserved.
24% 25% 20% 17% 15%
Adoption Customer Sat Training
Renewals Up-Sell / X-Sell
36% 18%...
©2015 Gainsight. All Rights Reserved.
A Product Focused CSM Compensation Model
•  Define Customer Tiers
•  Customer Touch ...
©2015 Gainsight. All Rights Reserved.
Key Consideration: Your CSM Model
Product
Focused
Revenue
Focused
Hybrid
•  Training...
©2015 Gainsight. All Rights Reserved.
Rules of Thumb for a Product Focused CSM Plan
•  Keep it simple
•  Include only thre...
©2015 Gainsight. All Rights Reserved.
Child-like Joy
©2015 Gainsight. All Rights Reserved.
How Gainsight Thinks
About CSM ...
©2015 Gainsight. All Rights Reserved.
Compensation is only one piece of the puzzle
How do you keep the team motivated?
Wha...
©2015 Gainsight. All Rights Reserved.
Goal: Metric to publish on a weekly basis
•  Objectively valuable: No one can contes...
©2015 Gainsight. All Rights Reserved.
Net New Green Customers
Customers that move from Red/Yellow to Green/Lime in our Hab...
©2015 Gainsight. All Rights Reserved.
Net New Green Customers
©2015 Gainsight. All Rights Reserved.
Track by CSM
©2015 Gainsight. All Rights Reserved.
Track Improvements
©2015 Gainsight. All Rights Reserved.
Track Declines
©2015 Gainsight. All Rights Reserved.
Benefits of weekly habit targets
•  Accountability
•  Insight
•  Ownership
•  Priori...
©2015 Gainsight. All Rights Reserved.
Child-like Joy
©2015 Gainsight. All Rights Reserved.
How Blackbaud thinks about
CSM ...
©2015 Gainsight. All Rights Reserved.
Blackbaud Confidential 20
NAME: Melissa Lipscomb FROM: Blackbaud
WHAT WE DO: Softwar...
©2015 Gainsight. All Rights Reserved.
Key Metrics
•  Retention
•  Transaction Fees
•  Customer Health
•  NPS
Compensation ...
©2015 Gainsight. All Rights Reserved.
Child-like Joy
©2015 Gainsight. All Rights Reserved.
How Influitive thinks about
CSM...
©2015 Gainsight. All Rights Reserved.
Influitive: Quick Overview
Company Overview
•  Toronto based tech start-up
•  Advoca...
©2015 Gainsight. All Rights Reserved.
Influitive: Bonus Philosophy
Bonus Requirements:
•  Encourage the team to renew cust...
©2015 Gainsight. All Rights Reserved.
Influitive: Bonus Breakdown
Three components:
•  Net MRR Churn
•  Adoption: X Percen...
©2015 Gainsight. All Rights Reserved.
Child-like Joy
©2015 Gainsight. All Rights Reserved.
How Prosper Healthcare
Lending ...
©2015 Gainsight. All Rights Reserved.
PHL: Quick Overview
Company Overview
• Based in Salt Lake City, Utah
• Division of P...
©2015 Gainsight. All Rights Reserved.
PHL: Bonus Philosophy
Strategy
Individual performance with team collaboration
1.  Gr...
©2015 Gainsight. All Rights Reserved.
PHL: Key Learnings
• Simplify
•  We thought this just meant fewer metrics
•  Elimina...
©2015 Gainsight. All Rights Reserved.
Q&A
©2015 Gainsight. All Rights Reserved.
Allison Pickens
apickens@gainsight.com
@PI...
©2015 Gainsight. All Rights Reserved.
THANK YOU
©2015 Gainsight. All Rights Reserved.
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Best practices in CSM compensation with customer success leaders

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CSM compensation is one of the most often debated questions for companies no matter their level of maturity in Customer Success. Getting the right comp plan for CSMs can depend on a variety of factors including customer segmentation, ASP, upsell potential and more.

Published in: Business
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Best practices in CSM compensation with customer success leaders

  1. 1. ©2015 Gainsight. All Rights Reserved. Child-like Joy Best Practices in CSM Compensation with Customer Success Leaders Scott Golden Director of Customer Success Strategy Gainsight
  2. 2. ©2015 Gainsight. All Rights Reserved. The CSM Industry is Growing and Attracting Great Talent 1-5! 5-10! 10-20! 20-30! >30! 1-3! 3-5! 5-10! 10-20! >20! Years! Years! Median Median The Average Career Length of a Customer Success Professional! The Average Time a Professional Has Spent in Customer Success!
  3. 3. ©2015 Gainsight. All Rights Reserved. United States - Average Compensation by Role! Rest of World - Average Compensation by Role! Base ! Variable! $K! $K! $61 ! $52 ! $92 ! $128 ! $177 ! $265 ! $8 ! $15 ! $22 ! $37 ! $41 ! $94 ! Specialist! Associate! Manager! Director! VP! CxO! $10 ! $13 ! $15 ! $29 ! $200 ! Specialist! Manager! Director! VP! CxO! There is Money to be Made in Customer Success
  4. 4. ©2015 Gainsight. All Rights Reserved. Managerial Responsibility by Title 100%! 98%! 95%! 47%! 20%! 6%! CxO! VP! Director! Manager! Associate! Specialist! Dir. Reports! Ind. Contributor! Response%!
  5. 5. ©2015 Gainsight. All Rights Reserved. Current Compensation Levers for Customer Success Customers Managed! Revenue Managed! Product Adoption! Health Score! NPS Score! Gross Retention! Up / X-sell! Net Retention! Variable Comp Levers Response %! 13%! 25%! 48%! 64%! 42%! 16%! Six! Five! Four! Three! Two! One! # of Levers in Comp Plan Response %!
  6. 6. ©2015 Gainsight. All Rights Reserved. 24% 25% 20% 17% 15% Adoption Customer Sat Training Renewals Up-Sell / X-Sell 36% 18% Adoption Customer Sat Renewals Key Consideration: The Maturity of Your Organization CSM Responsibility For a <$25M ARR Organization CSM Responsibility For a >$500M ARR Organization •  Where is the team currently focusing? •  Where do I need them to focus? •  Is my current CSM profile a Jack-of-all-trades? •  Can I monitor & measure performance?
  7. 7. ©2015 Gainsight. All Rights Reserved. A Product Focused CSM Compensation Model •  Define Customer Tiers •  Customer Touch Frequency •  Customer Touch Type Territory Coverage! 1 KPIs! 2 •  Adoption Metrics •  Average NPS •  Average Customer Health Comp Lever! Comp %! On-site QBRs #! 25%! Monthly Health Checks #! 25%! Maintain Avg NPS Score #! 30%! QBR Template Update MBO! 20%! Total! 100%!Process Optimization! 3 •  Refine Hand-off Process •  Update QBR Template Example(s)
  8. 8. ©2015 Gainsight. All Rights Reserved. Key Consideration: Your CSM Model Product Focused Revenue Focused Hybrid •  Training •  Adoption •  Value •  Renewals •  Up-Sell •  X-Sell
  9. 9. ©2015 Gainsight. All Rights Reserved. Rules of Thumb for a Product Focused CSM Plan •  Keep it simple •  Include only three measures •  Maintain some flexibility for judgment calls •  Optimize over the year
  10. 10. ©2015 Gainsight. All Rights Reserved. Child-like Joy ©2015 Gainsight. All Rights Reserved. How Gainsight Thinks About CSM Motivation and Morale Allison Pickens VP Customer Success & Business Operations
  11. 11. ©2015 Gainsight. All Rights Reserved. Compensation is only one piece of the puzzle How do you keep the team motivated? What metric can CSMs own?
  12. 12. ©2015 Gainsight. All Rights Reserved. Goal: Metric to publish on a weekly basis •  Objectively valuable: No one can contest the achievement. •  A discrete unit: It’s clear when the achievement is complete. •  Measurable: We can create a Gainsight dashboard to track our achievements. •  Frequently achieved: We can recognize our achievements week- to-week. •  Attributable to the CSM: No one can contest that the CSM is primarily responsible.
  13. 13. ©2015 Gainsight. All Rights Reserved. Net New Green Customers Customers that move from Red/Yellow to Green/Lime in our Habits Scorecard Measure •  Green: At least x% of licensed users are daily active users of Cockpit •  Lime: At least y% of licensed users are daily active users (of any part of the product) •  Yellow: Some usage, but not daily actives •  Red: No usage of Gainsight in the last week
  14. 14. ©2015 Gainsight. All Rights Reserved. Net New Green Customers
  15. 15. ©2015 Gainsight. All Rights Reserved. Track by CSM
  16. 16. ©2015 Gainsight. All Rights Reserved. Track Improvements
  17. 17. ©2015 Gainsight. All Rights Reserved. Track Declines
  18. 18. ©2015 Gainsight. All Rights Reserved. Benefits of weekly habit targets •  Accountability •  Insight •  Ownership •  Prioritization •  Significance
  19. 19. ©2015 Gainsight. All Rights Reserved. Child-like Joy ©2015 Gainsight. All Rights Reserved. How Blackbaud thinks about CSM compensation
  20. 20. ©2015 Gainsight. All Rights Reserved. Blackbaud Confidential 20 NAME: Melissa Lipscomb FROM: Blackbaud WHAT WE DO: Software Solutions for Nonprofits MY BACKGROUND: 10 years in Software Customer Success MY TEAM: •  SaaS Products •  High touch model •  Average 75 accounts per CSM •  Focused on adoption & success •  Sales handles renewals & upsells
  21. 21. ©2015 Gainsight. All Rights Reserved. Key Metrics •  Retention •  Transaction Fees •  Customer Health •  NPS Compensation Plan •  Base+Bonus (paid quarterly) Bonus Criteria •  Net Retention (75%) •  Transaction Revenue (25%)
  22. 22. ©2015 Gainsight. All Rights Reserved. Child-like Joy ©2015 Gainsight. All Rights Reserved. How Influitive thinks about CSM compensation
  23. 23. ©2015 Gainsight. All Rights Reserved. Influitive: Quick Overview Company Overview •  Toronto based tech start-up •  Advocate marketing software (new category) •  250+ customers CSM Overview (called Advocacy Coaches) •  Team of 6 people •  Primarily responsible for adoption and renewals while Sales responsible for upsell/cross-sell Compensation •  Base + quarterly bonus
  24. 24. ©2015 Gainsight. All Rights Reserved. Influitive: Bonus Philosophy Bonus Requirements: •  Encourage the team to renew customers – it’s their own metric •  There is pain for the team when we lose customers but can make that up partially via cross-sell and upsell so we want to encourage the team to look for those opportunities •  Go beyond trailing indicators and focus on adoption (leading indicators) •  Don’t just bonus based on a customer satisfaction metric but on a real customer advocacy score •  Keep it simple
  25. 25. ©2015 Gainsight. All Rights Reserved. Influitive: Bonus Breakdown Three components: •  Net MRR Churn •  Adoption: X Percentage of customers over the “magic number” •  Advocacy: X Percentage of customers have performed 1 major act of advocacy or 4 minor acts of advocacy Bonus Percentage breakdown: • 65%: Net MRR Churn • 20%: Advocacy • 15%: Adoption
  26. 26. ©2015 Gainsight. All Rights Reserved. Child-like Joy ©2015 Gainsight. All Rights Reserved. How Prosper Healthcare Lending thinks about CSM compensation
  27. 27. ©2015 Gainsight. All Rights Reserved. PHL: Quick Overview Company Overview • Based in Salt Lake City, Utah • Division of Prosper Marketplace, based in San Francisco • Patient financing platform for surgeons, fertility clinics and dentists • Jan. ‘15 switch from subscription to usage-based revenue model • 2500+ customers (adding 300 / month) CSM Overview • Team of 20, organized by industry vertical and customer tier (Q4) • Responsible for product adoption, usage and expansion Compensation • Base + quarterly bonus (MBO) • 65% / 35%
  28. 28. ©2015 Gainsight. All Rights Reserved. PHL: Bonus Philosophy Strategy Individual performance with team collaboration 1.  Grow usage penetration 2.  Grow the product usage base 3.  Team usage 4.  Individual development, milestone, or project Bonus Percentage breakdown: 28% ($1,000): Usage penetration 28% ($1,000): Expand active user base 28% ($1,000): Grow funded loans (revenue) 15% ($500): Individual development, project, milestone
  29. 29. ©2015 Gainsight. All Rights Reserved. PHL: Key Learnings • Simplify •  We thought this just meant fewer metrics •  Eliminate confusion with ratios and go to raw numbers if needed • The CSM persona values team collaboration • Competitions to drive lead measures • Iterate and revisit assumptions
  30. 30. ©2015 Gainsight. All Rights Reserved. Q&A ©2015 Gainsight. All Rights Reserved. Allison Pickens apickens@gainsight.com @PIckensAllison Scott Golden Sgolden@gainsight.com @Sctgldn
  31. 31. ©2015 Gainsight. All Rights Reserved. THANK YOU ©2015 Gainsight. All Rights Reserved.

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