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.

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Child-like Joy
Best Practices in CSM Compensation
with Customer Success Leaders
Scott Golden
Director of Customer Success Strategy
Gainsight

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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!

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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

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Managerial Responsibility by Title
100%! 98%! 95%!
47%!
20%!
6%!
CxO! VP! Director! Manager! Associate! Specialist!
Dir. Reports! Ind. Contributor!
Response%!

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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 %!

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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?

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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)

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Key Consideration: Your CSM Model
Product
Focused
Revenue
Focused
Hybrid
• Training
• Adoption
• Value
• Renewals
• Up-Sell
• X-Sell

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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

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Child-like Joy
©2015 Gainsight. All Rights Reserved.
How Gainsight Thinks
About CSM Motivation and Morale
Allison Pickens
VP Customer Success & Business
Operations

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Compensation is only one piece of the puzzle
How do you keep the team motivated?
What metric can CSMs own?

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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.

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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

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Net New Green Customers

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Track by CSM

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Track Improvements

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Track Declines

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Benefits of weekly habit targets
• Accountability
• Insight
• Ownership
• Prioritization
• Significance

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Child-like Joy
©2015 Gainsight. All Rights Reserved.
How Blackbaud thinks about
CSM compensation

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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

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Key Metrics
• Retention
• Transaction Fees
• Customer Health
• NPS
Compensation Plan
• Base+Bonus (paid quarterly)
Bonus Criteria
• Net Retention (75%)
• Transaction Revenue (25%)

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Child-like Joy
©2015 Gainsight. All Rights Reserved.
How Influitive thinks about
CSM compensation

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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

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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

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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

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Child-like Joy
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How Prosper Healthcare
Lending thinks about CSM
compensation

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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%

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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

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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

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Q&A
©2015 Gainsight. All Rights Reserved.
Allison Pickens
apickens@gainsight.com
@PIckensAllison
Scott Golden
Sgolden@gainsight.com
@Sctgldn

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THANK YOU
©2015 Gainsight. All Rights Reserved.