SlideShare a Scribd company logo
Arsham Memarzadeh & Brandon Hickie
CUSTOMER SUCCESS BY THE NUMBERS:
BENCHMARKS & KPI'S FOR YOUR TEAM
CUSTOMER SUCCESS BY THE
NUMBERS: BENCHMARKS & KPI'S FOR
YOUR TEAM
Arsham Memarzadeh
@arshammem
Brandon Hickie
@bhickie
CUSTOMER SUCCESS EFFECTS
THE TOP LINE
PERFORMANCE ENHANCEMENTS THAT ARE LEGAL
↑ Revenue
Growth Rate
↑ Revenue
Multiple
↑ S&M Spend as
% of Revenue
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved
S&M SPEND DRIVES REVENUE GROWTH
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 5
NET RETENTION DRIVES REVENUE MULTIPLES
6Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved
7
GROWING FROM WITHIN IS MORE EFFICIENT
$0.28 $1.18
Cost to Upsell
$1 in ACV
Cost to Acquire
$1 in ACV
4x ROI
Source: Pac Crest 2015 SaaS Survey
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved
CUSTOMER SUCCESS
OBJECTIVES
FEW CUSTOMER SUCCESS TEAMS CONSIDER
EXPANSION A TOP OBJECTIVE
9
Source: 2015 Totango Customer Success Survey. 768 Respondents
57% Product Adoption
55% Churn Reduction
47% Onboarding
42% Customer Advocacy
39% Customer Support
20% Upsell
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved
FEW CUSTOMER SUCCESS TEAMS CONSIDER
EXPANSION A TOP OBJECTIVE
10
Source: 2015 Totango Customer Success Survey. 768 Respondents
57% Product Adoption
55% Churn Reduction
47% Onboarding
42% Customer Advocacy
39% Customer Support
20% Upsell
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved
GREAT COMPANIES
INSTRUMENT THEIR BUSINESS
BENEFITS OF BENCHMARKING
FOR CUSTOMER SUCCESS
13
“Talent wins games, but
teamwork and intelligence
wins championships.”
-Michael Jordan
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved
CLEAR OBJECTIVES & A SHARED VISION
14
TRANSPARENCY & OBJECTIVITY
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved
“Setting goals is the first
step in turning the invisible
into the visible.”
-Tony Robbins
15
CROSS-FUNCTIONAL ALIGNMENT & CLEAR ROLES
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved
“The achievements of an organization are
the results of the combined effort of each
individual.”
Vince Lombardi
16
IDENTIFY & PRIORITIZE IMPROVEMENT IDEAS
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved
USE METRICS TO BUILD AND MEASURE YOUR TEAM
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 17
Reward your reps
accordingly
Corporate Structural Compensation
Average Salaries
Compensation
Structure
Retention vs. Upsell vs.
New Bookings
Set and track
goals
Net retention
Time from booking to
implementation
Customer retention cost
Metrics to build
your team
When do you hire your
first CS leader?
How many CS reps by
company stage?
Frequency of customer
engagement
CORPORATE METRICS
1. Net dollar retention
2. Upsell/cross-sell as % of
revenue
3. Net promoter score
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 19
NET DOLLAR RETENTION BENCHMARKS
103%
Net Dollar
Retention
108%
Net Dollar
Retention
Transactional Sales
Models
Enterprise Sales
Models
= total revenue from Customers T2 / Total Revenue from Customers T1
UPSELL/CROSS SELL REVENUE CONTRIBUTIONS
HOVER AT 19%
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 20
19%
of revenue attributed
to upsell / cross-sell
16% 21%
19%
overall
median
Early
stage
Growth
stage
• Companies with between $3-5m ARR attribute ~16% of
revenue to cross-/up-sell
• Number increases as company scales
• Caps off at ~21%
Upsell / Cross-sell as % of Revenue
21
COST TO RENEW $1 IN ARR = 13 CENTS
$0.13 $0.28
Cost to retain
$1 in ACV
Cost to upsell
$1 in ACV
$0.07 $0.33
$0.13
2015
median
Cost to Renew $1 in ARR:
CRC =
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved
CSMs/AMs/
Support
Mgmt & Ops
OTE
Engagement
Programs
Recurring Costs
(infrastructure)
Overhead
Source: Pac Crest 2015 SaaS Survey
STRUCTURAL METRICS
1. When do you hire your first leader?
2. Number of customers managed per rep
3. ARR per CSM
4. Frequency of customer engagement
23
HIRE CS LEADER BEFORE $1M ARR
22%
30%
14%
24%
5% 5%
0%
3%
12%
21%
35%
6% 6%
18%
0%
5%
10%
15%
20%
25%
30%
35%
40%
<$100K $100K-$500K $501K-$1M $1.1M-$5M $5.1M-$10M $10.1M-$20M >$20M
Stage you hire your first CS Leader
Top 50% growers Bottom 50% growers
Note: excludes companies with less than $1M ARR
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved
65%+ of fastest growing
companies hire CS leader
before $1M ARR
63% of slower companies
hire leader after $1M ARR
24
TEAM GROWTH BENCHMARKS
1CSM:$2M
MEDIAN CUSTOMERS MANAGED PER
CS MANAGER
ARR PER CS MANAGER
63
12
TRANSACTIONAL SALES MODEL ENTERPRISE SALES MODEL
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved
1CSM:$2M
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
TRANSACTIONAL
SALES MODEL
ENTERPRISE SALES
MODEL
RULE OF THUMB: ENGAGE YOUR CUSTOMERS AT
LEAST EVERY MONTH
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 25
FREQUENCY OF CUSTOMER
ENGAGEMENT
Passive
Weekly
½ Year
Quarterly
Monthly
Passive
Weekly
Quarterly
Monthly
57%
engage their
customers at
least every
month
85%
engage their
customers at
least every
month
Transactional Sales
Models
Enterprise Sales
Models
COMPENSATION METRICS
1. Upsell / cross-sell vs. new bookings comp
2. Retention vs. new bookings comp
3. Average salary per CSM
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 27
TEAM COMPENSATION AND COMP STRUCTURE
$87,500
$137,500
$162,500
Customer Success
Manager
Director of Customer
Success
VP of Customer
Success
Median CS Compensation by Title
9%
11%
54%
26%
Compensation Structure
Base Salary + Bonus + Commission
Base Salary + Commission
Base Salary + Bonus
Base Salary Only
Source: 2015 Totango Customer Success Survey. 768 Respondents
UPSELL COMP IS ~SAME AS NEW BOOKINGS;
RENEWAL COMP IS LOWER
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 28
39%
Pay the same
for renewals
as they do
new bookings
68%
Pay the same for
upsells as they
do new bookings
0% 10% 20% 30% 40% 50% 60% 70%
Less than a new booking of the same size
More than a new booking of the same size
Same as a new booking of the same size
We don’t pay commission to sales reps on
renewals
Upsell and Renewals Commission
Upsells Renewals
WHAT METRICS MAKE SENSE FOR YOUR
ORGANIZATION
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 29
Key is to stay focused on no more than three metrics at a time
For more download our ebook on Building Your Customer Success Strategy
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 30
"We must … put customer
success at the heart of what
we do. We want customers
for life, and if we can’t
reasonably expect to make a
customer successful, we
shouldn’t sign them in the
first place.”
David Sacks CEO at Zenefits & Co-Founder of
Yammer

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Customer Success By the Numbers: Benchmarks & KPI's for Your Team

  • 1. Arsham Memarzadeh & Brandon Hickie CUSTOMER SUCCESS BY THE NUMBERS: BENCHMARKS & KPI'S FOR YOUR TEAM
  • 2. CUSTOMER SUCCESS BY THE NUMBERS: BENCHMARKS & KPI'S FOR YOUR TEAM Arsham Memarzadeh @arshammem Brandon Hickie @bhickie
  • 4. PERFORMANCE ENHANCEMENTS THAT ARE LEGAL ↑ Revenue Growth Rate ↑ Revenue Multiple ↑ S&M Spend as % of Revenue Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved
  • 5. S&M SPEND DRIVES REVENUE GROWTH Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 5
  • 6. NET RETENTION DRIVES REVENUE MULTIPLES 6Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved
  • 7. 7 GROWING FROM WITHIN IS MORE EFFICIENT $0.28 $1.18 Cost to Upsell $1 in ACV Cost to Acquire $1 in ACV 4x ROI Source: Pac Crest 2015 SaaS Survey Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved
  • 9. FEW CUSTOMER SUCCESS TEAMS CONSIDER EXPANSION A TOP OBJECTIVE 9 Source: 2015 Totango Customer Success Survey. 768 Respondents 57% Product Adoption 55% Churn Reduction 47% Onboarding 42% Customer Advocacy 39% Customer Support 20% Upsell Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved
  • 10. FEW CUSTOMER SUCCESS TEAMS CONSIDER EXPANSION A TOP OBJECTIVE 10 Source: 2015 Totango Customer Success Survey. 768 Respondents 57% Product Adoption 55% Churn Reduction 47% Onboarding 42% Customer Advocacy 39% Customer Support 20% Upsell Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved
  • 12. BENEFITS OF BENCHMARKING FOR CUSTOMER SUCCESS
  • 13. 13 “Talent wins games, but teamwork and intelligence wins championships.” -Michael Jordan Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved CLEAR OBJECTIVES & A SHARED VISION
  • 14. 14 TRANSPARENCY & OBJECTIVITY Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved “Setting goals is the first step in turning the invisible into the visible.” -Tony Robbins
  • 15. 15 CROSS-FUNCTIONAL ALIGNMENT & CLEAR ROLES Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved “The achievements of an organization are the results of the combined effort of each individual.” Vince Lombardi
  • 16. 16 IDENTIFY & PRIORITIZE IMPROVEMENT IDEAS Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved
  • 17. USE METRICS TO BUILD AND MEASURE YOUR TEAM Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 17 Reward your reps accordingly Corporate Structural Compensation Average Salaries Compensation Structure Retention vs. Upsell vs. New Bookings Set and track goals Net retention Time from booking to implementation Customer retention cost Metrics to build your team When do you hire your first CS leader? How many CS reps by company stage? Frequency of customer engagement
  • 18. CORPORATE METRICS 1. Net dollar retention 2. Upsell/cross-sell as % of revenue 3. Net promoter score
  • 19. Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 19 NET DOLLAR RETENTION BENCHMARKS 103% Net Dollar Retention 108% Net Dollar Retention Transactional Sales Models Enterprise Sales Models = total revenue from Customers T2 / Total Revenue from Customers T1
  • 20. UPSELL/CROSS SELL REVENUE CONTRIBUTIONS HOVER AT 19% Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 20 19% of revenue attributed to upsell / cross-sell 16% 21% 19% overall median Early stage Growth stage • Companies with between $3-5m ARR attribute ~16% of revenue to cross-/up-sell • Number increases as company scales • Caps off at ~21% Upsell / Cross-sell as % of Revenue
  • 21. 21 COST TO RENEW $1 IN ARR = 13 CENTS $0.13 $0.28 Cost to retain $1 in ACV Cost to upsell $1 in ACV $0.07 $0.33 $0.13 2015 median Cost to Renew $1 in ARR: CRC = Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved CSMs/AMs/ Support Mgmt & Ops OTE Engagement Programs Recurring Costs (infrastructure) Overhead Source: Pac Crest 2015 SaaS Survey
  • 22. STRUCTURAL METRICS 1. When do you hire your first leader? 2. Number of customers managed per rep 3. ARR per CSM 4. Frequency of customer engagement
  • 23. 23 HIRE CS LEADER BEFORE $1M ARR 22% 30% 14% 24% 5% 5% 0% 3% 12% 21% 35% 6% 6% 18% 0% 5% 10% 15% 20% 25% 30% 35% 40% <$100K $100K-$500K $501K-$1M $1.1M-$5M $5.1M-$10M $10.1M-$20M >$20M Stage you hire your first CS Leader Top 50% growers Bottom 50% growers Note: excludes companies with less than $1M ARR Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 65%+ of fastest growing companies hire CS leader before $1M ARR 63% of slower companies hire leader after $1M ARR
  • 24. 24 TEAM GROWTH BENCHMARKS 1CSM:$2M MEDIAN CUSTOMERS MANAGED PER CS MANAGER ARR PER CS MANAGER 63 12 TRANSACTIONAL SALES MODEL ENTERPRISE SALES MODEL Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 1CSM:$2M
  • 25. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% TRANSACTIONAL SALES MODEL ENTERPRISE SALES MODEL RULE OF THUMB: ENGAGE YOUR CUSTOMERS AT LEAST EVERY MONTH Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 25 FREQUENCY OF CUSTOMER ENGAGEMENT Passive Weekly ½ Year Quarterly Monthly Passive Weekly Quarterly Monthly 57% engage their customers at least every month 85% engage their customers at least every month Transactional Sales Models Enterprise Sales Models
  • 26. COMPENSATION METRICS 1. Upsell / cross-sell vs. new bookings comp 2. Retention vs. new bookings comp 3. Average salary per CSM
  • 27. Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 27 TEAM COMPENSATION AND COMP STRUCTURE $87,500 $137,500 $162,500 Customer Success Manager Director of Customer Success VP of Customer Success Median CS Compensation by Title 9% 11% 54% 26% Compensation Structure Base Salary + Bonus + Commission Base Salary + Commission Base Salary + Bonus Base Salary Only Source: 2015 Totango Customer Success Survey. 768 Respondents
  • 28. UPSELL COMP IS ~SAME AS NEW BOOKINGS; RENEWAL COMP IS LOWER Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 28 39% Pay the same for renewals as they do new bookings 68% Pay the same for upsells as they do new bookings 0% 10% 20% 30% 40% 50% 60% 70% Less than a new booking of the same size More than a new booking of the same size Same as a new booking of the same size We don’t pay commission to sales reps on renewals Upsell and Renewals Commission Upsells Renewals
  • 29. WHAT METRICS MAKE SENSE FOR YOUR ORGANIZATION Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 29 Key is to stay focused on no more than three metrics at a time For more download our ebook on Building Your Customer Success Strategy
  • 30. Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 30 "We must … put customer success at the heart of what we do. We want customers for life, and if we can’t reasonably expect to make a customer successful, we shouldn’t sign them in the first place.” David Sacks CEO at Zenefits & Co-Founder of Yammer

Editor's Notes

  1. 2 Levers for driving revenue growth: Increasing investment in growth initiatives Making the dollars you invest more efficient
  2. We surveyed a group of about 100 cs leaders and found that this lack of priority around upsell translates directly into the amount of revenue attributed to expansion, which hovers around 20%