Compensation Planning: Developing a CSM Incentive Model
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Bernie Kassar, SVP of Customer Success and Support at Xactly Chris Sirosky, VP at Dynatrace Presented at Pulse Conference 2015.
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Compensation Planning: Developing a CSM Incentive Model
- 1. ©2015 Gainsight. All Rights Reserved. Compensation Planning: Developing a CSM Incentive Model Moderator: Jeff Epstein, Venture Partner at Bessemer Bernie Kassar, SVP of Customer Success and Support at Xactly Chris Sirosky, VP at Dynatrace
- 2. ©2015 Gainsight. All Rights Reserved. SVP, Customer Success & Support Bernie Kassar
- 3. ©2015 Gainsight. All Rights Reserved. Objectives Customer Success Focus Areas • Adoption • Renewals • Add-On Revenue • Customer References Guiding Principles for FY16 Comp Plans • Simple and easy to understand payouts • Reward performance and driving the right behaviors • Appropriate plan mechanics for each measure
- 4. ©2015 Gainsight. All Rights Reserved. Customer Landscape Enterprise Medium Size Business SMB 3001+ Employees Up to 350 Employees 351 - 3000+ Employees
- 5. ©2015 Gainsight. All Rights Reserved. VariableVariable Base PayBase Pay Current Compensation & Team Model 80%80% 20%20% Customer Success Representatives • Adoption • Renewals / Add-Ons Customer Success Managers • Success Blueprinting • Adoption • Renewals / Add-Ons Customer Success Representatives • Adoption • Renewals / Add-Ons Customer Success Managers • Success Blueprinting • Adoption • Renewals / Add-Ons
- 6. ©2015 Gainsight. All Rights Reserved. Current Compensation Structure - CSR Plan Components • 30% Corporate Plan / 35% Renewals / 35% Add-On’s Incentive Plan Type • % to Goal (Renewals / Add-On’s) Performance Period • Mix of YTD & Quarterly Payout Frequency • Quarterly CustomerSuccess Representatives
- 7. ©2015 Gainsight. All Rights Reserved. Current Compensation Structure - CSM CustomerSuccessManagers Plan Components • 30% Corporate Plan / 70% MBO MBO Types • Customer Strategy / Renewals / Customer Success Program Assets Incentive Plan Types • Mix of % to Goal & Binary Performance Period • Mix of YTD & Quarterly Payout Frequency • Quarterly
- 8. ©2015 Gainsight. All Rights Reserved. Lessons Learned • No More than 3 Comp Plan / MBO Components • Use Concrete Metrics or Definable Measures • Introduce Quarterly Strategic Themes w/SPIFS • Create Quarterly or Bi-Annual Plans • President’s Club Eligibility
- 9. ©2015 Gainsight. All Rights Reserved. THANK YOU
- 10. ©2015 Gainsight. All Rights Reserved. VP – Customer Success Chris Sirosky
- 11. ©2015 Gainsight. All Rights Reserved. Balancing Priorities – Comp Planning 101 • Fiscal Responsibility • Strategic Initiatives • Regional Nuances Business Objectives • Realistic Goals • Nullifying Dysfunction • Financially Rewarding Driving Behavior
- 12. ©2015 Gainsight. All Rights Reserved. MBOs and Comp Structure • Multiple components, weighted to renewals: • On Premise Maintenance and SaaS Subscriptions • Services: Training and Consulting • Team versus individual goals • Balancing components, when you have: • Evolving product portfolio • Regional realities
- 13. ©2015 Gainsight. All Rights Reserved. Lessons Learned • Consensus is achieved at 80% tolerance • Engineering for effectiveness also means efficiency in execution • Partner closely with Human Resources, particularly in global organizations • Understand your partner distribution model • Analyze outcomes for improving forward designs • Budget for spot bonuses; make them fun!
- 14. ©2015 Gainsight. All Rights Reserved. THANK YOU
- 15. ©2015 Gainsight. All Rights Reserved. CSM Compensation Benchmarks
- 16. ©2015 Gainsight. All Rights Reserved. The Customer Success industry is growing and attracting seasoned professionals Customer Success Index: Industry Compensation (183 responses) The avg. career length of a Customer Success Professional is 10-20 years The avg time a professional has spent in Customer Success in 1-3 years Response% Years Years Median Median
- 17. ©2015 Gainsight. All Rights Reserved. There is money to be made in Customer Success US & Canada - Avg Compensation by Role Rest of World - Avg Compensation By Role On average, a CSM in the US & CA makes ~$100K On average, a CSM in the US & CA makes ~$100K Customer Success Index: Industry Compensation (183 responses) Base Variable
- 18. ©2015 Gainsight. All Rights Reserved. Revenue retention and expansion still drive most variable comp plans for CS Customer Success Index: Industry Compensation (166 responses) Variable Comp Levers Variable Comp Payout Cadence Monthly Quarterly Annually
Editor's Notes
- If your customer doesn’t see value from your product or service, there low switching costs, lots of options Low Barrier To Entry Fast customer acquisition Revenue growth potential You know so much more about your customer Speed of innovation Lower barrier to exit Large customer volumes Revenue growth expectations Multiple sources of data to manage Competitive landscape & fickle customer base ----- Meeting Notes (3/26/15 16:06) ----- Try to find a good slide to quantify the impact. Got to address this now. ----- Meeting Notes (3/26/15 16:32) ----- Change to circles Pay as you go pricing
- Key Takeaway - the industry is growing, hiring seasoned veterans.
- A CSM in the US makes $100K The industry is attracting talent What a CS professional does is super important and it is being recognized in compensation packages A