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©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
©2015 Gainsight. All Rights Reserved.
SVP, Customer Success &
Support
Bernie Kassar
©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
©2015 Gainsight. All Rights Reserved.
Customer Landscape
Enterprise
Medium Size Business
SMB
3001+ Employees
Up to 350 Employees
351 - 3000+ Employees
©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
©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
©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
©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
©2015 Gainsight. All Rights Reserved.
THANK YOU
©2015 Gainsight. All Rights Reserved.
VP – Customer Success
Chris Sirosky
©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
©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
©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!
©2015 Gainsight. All Rights Reserved.
THANK YOU
©2015 Gainsight. All Rights Reserved.
CSM Compensation
Benchmarks
©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
©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
©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

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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

  1. 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
  2. Key Takeaway - the industry is growing, hiring seasoned veterans.
  3. 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