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Structuring Your Customer
Success Organization

Webinar Series

#customersuccess
Some Housekeeping
• We will have a Q&A session at the end, so keep your
questions and comments coming.
• Use the GoToWebin...
Happy Halloween!
Dan Steinman

Chief Customer Officer,
Gainsight

Catherine Blackmore
VP, Customer Success,
Badgeville
The Five Org Models of Customer Success

1. Firefighter CSM
2. Sales-Oriented CSM
3. Service-Oriented CSM
4. Integrated CS...
Firefighter CSMs

Common In Companies With:
Early-stage companies
CSM does support, renewals, etc.

CEO

Sales

Services

...
Sales-Oriented CSMs

Common In Companies With:
Low level of product complexity
Competitive sales/renewals

CEO

Sales

CSM...
Service-Oriented CSMs
Common In Companies With:
Medium level of product complexity
More mature organization
Pros:
CSM alig...
Integrated CSM
Common In Companies With:
Moderate level of product
complexity
Expansion opportunity
Pros:
CCO “owns” exist...
Partnership CSM
Common In Companies With:
High level of product complexity
Competitive sales/renewals
Pros:
CSM can be ver...
Product Complexity

Where Do You Fit?

ServiceOriented

SalesOriented
Firefighter

Business Maturity

Partnership
Model

I...
Best Practices

Up-Sell

Customer
Marketing

Titles

• Lives in Sales, unless CSM owns all customer
revenue
• If in Sales,...
Should CSMs be on a variable compensation model?

• Sales: Up to 50% or more
• Renewal Managers: 25-35%
• Customer Success...
What should the variable component be based on?

Renewals?
Net Promoter Score?

Cross-Sells?

References?

Service Referra...
Should CSMs be on individual or team goals?
Should they be compensated on over-achievement?
Team Size = 5 CSMs
Renewal quota = $10M
Base to Variable = 85:15
Base + Va...
Customer Success is a common thread in each element of growth

1

2

3

New Bookings

Renewals

Up-Sell and
Cross-Sell

Pr...
Then shouldn’t all executives be compensated on Customer Success?
Think about the behavioral changes this will drive acros...
THE OFFICIAL CUSTOMER
SUCCESS GUIDE TO
DREAMFORCE
----x---dreamforce2013.gainsight.com

Questions?
THE OFFICIAL CUSTOMER
SUCCESS GUIDE TO
DREAMFORCE
----x---dreamforce2013.gainsight.com

Thank You!
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Webinar | Structuring a Customer Success Organization

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Dan Steinman, Chief Customer Officer at Gainsight, and Catherine Blackmore, VP of Customer Success at Badgeville, talk about various organization structures and possible compensation/incentive options to drive Customer Success.

Published in: Business, Education

Webinar | Structuring a Customer Success Organization

  1. 1. Structuring Your Customer Success Organization Webinar Series #customersuccess
  2. 2. Some Housekeeping • We will have a Q&A session at the end, so keep your questions and comments coming. • Use the GoToWebinar chat box and/or tweet using #customersuccess. • Video recording and slides will be made available soon after the webinar. • Please fill the survey at the end – we promise it’s short! • It’ll help us bring you more #customersuccess events and content.
  3. 3. Happy Halloween! Dan Steinman Chief Customer Officer, Gainsight Catherine Blackmore VP, Customer Success, Badgeville
  4. 4. The Five Org Models of Customer Success 1. Firefighter CSM 2. Sales-Oriented CSM 3. Service-Oriented CSM 4. Integrated CSM 5. Partnership CSM
  5. 5. Firefighter CSMs Common In Companies With: Early-stage companies CSM does support, renewals, etc. CEO Sales Services Customer Success Management Pros: CSM is “one stop shop” CSM ensures great client experience Cons: Hard to scale with so many hats Difficult to hire for role
  6. 6. Sales-Oriented CSMs Common In Companies With: Low level of product complexity Competitive sales/renewals CEO Sales CSM / Renewals / Account Management Services Pros: CSM aligned to revenue Also aligned to up-sell Cons: Less customer focus Perceived as “another salesperson”
  7. 7. Service-Oriented CSMs Common In Companies With: Medium level of product complexity More mature organization Pros: CSM aligned to customer needs CSM also aligned to rest of service org CEO Sales Customer Success Management Services Professional Services Training Cons: Less revenue alignment/quantification Lots of touch points for client Onboarding Support
  8. 8. Integrated CSM Common In Companies With: Moderate level of product complexity Expansion opportunity Pros: CCO “owns” existing customers Sales team are pure hunters CEO New Business Sales Renewals / Account Management Customer Success Management Cons: Requires versatile CCO Depends on mature organization Chief Customer Officer Professional Services Training Onboarding Support
  9. 9. Partnership CSM Common In Companies With: High level of product complexity Competitive sales/renewals Pros: CSM can be very customer-focused Renewals aligned with sales motion CEO Cons: Some level of duplication / overlap Sometimes hard to quantify ROI Sales Renewals / Account Management Services Customer Success Management Professional Services Training Onboarding Support
  10. 10. Product Complexity Where Do You Fit? ServiceOriented SalesOriented Firefighter Business Maturity Partnership Model Integrated Model
  11. 11. Best Practices Up-Sell Customer Marketing Titles • Lives in Sales, unless CSM owns all customer revenue • If in Sales, incent CSM team for opportunities created • Lives in Marketing, but assign dedicated resource focused on existing customer marketing as part of virtual team • Customer Success Manager trending, as Account Manager often has connotation of Sales
  12. 12. Should CSMs be on a variable compensation model? • Sales: Up to 50% or more • Renewal Managers: 25-35% • Customer Success Managers: 15-20%
  13. 13. What should the variable component be based on? Renewals? Net Promoter Score? Cross-Sells? References? Service Referrals? Customer Calls? QBR Feedback? Up-Sells? Meetings?
  14. 14. Should CSMs be on individual or team goals?
  15. 15. Should they be compensated on over-achievement? Team Size = 5 CSMs Renewal quota = $10M Base to Variable = 85:15 Base + Variable (if quota is met) = $100K/CSM Total variable pool for the team = $75K Achievement (of quota) Pay < 80% Zilch! 90% 85% 100% 100% 110% 125% Revenue saving = $1M Cost = 25% of $75K = $18.75K
  16. 16. Customer Success is a common thread in each element of growth 1 2 3 New Bookings Renewals Up-Sell and Cross-Sell Primary metric for measuring Customer Success (supported by renewals sales) Happy customers buy more (supported by install base sales) Customer Success makes existing customers happy and reference-able
  17. 17. Then shouldn’t all executives be compensated on Customer Success? Think about the behavioral changes this will drive across your company: Engineering is just as intent on developing sticky features as they are new, flashy ones that help sell the product. Sales thinks twice about selling to those customers they know you can’t really satisfy. Finance pays just as much attention to the drivers, and accuracy, of the Renewal forecast as they do the New Business forecast. Marketing gives some time and energy to campaigns to the install base that are all about loyalty and love, not just upselling. HR treats the hiring and retention of great Services people with the exact same attitude as they do for great Sales people.
  18. 18. THE OFFICIAL CUSTOMER SUCCESS GUIDE TO DREAMFORCE ----x---dreamforce2013.gainsight.com Questions?
  19. 19. THE OFFICIAL CUSTOMER SUCCESS GUIDE TO DREAMFORCE ----x---dreamforce2013.gainsight.com Thank You!

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