Structuring Your Customer Success Organization

#customersuccess

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Dan SteinmanChief Customer Officer,

Gainsight

Catherine Blackmore

VP, Customer Success, Badgeville

Happy Halloween!

1. Firefighter CSM

2. Sales-Oriented CSM

3. Service-Oriented CSM

4. Integrated CSM

5. Partnership CSM

The Five Org Models of Customer Success

Firefighter CSMs

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

Pros:CSM is “one stop shop”CSM ensures great client experience

Cons:Hard to scale with so many hatsDifficult to hire for role

CEO

Sales Services

Customer Success

Management

Sales-Oriented CSMs

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

Pros:CSM aligned to revenueAlso aligned to up-sell

Cons:Less customer focusPerceived as “another salesperson”

CEO

Sales

CSM / Renewals /

Account Management

Services

CEO

Sales Services

Customer Success

Management

Professional Services Training Onboarding Support

Service-Oriented CSMs

Common In Companies With:Medium level of product complexityMore mature organization

Pros:CSM aligned to customer needsCSM also aligned to rest of service org

Cons:Less revenue alignment/quantificationLots of touch points for client

Integrated CSM

Common In Companies With:Moderate level of product complexityExpansion opportunity

Pros:CCO “owns” existing customersSales team are pure hunters

Cons:Requires versatile CCODepends on mature organization

CEO

New Business Sales

Chief Customer

Officer

Renewals / Account

Management

Customer Success

Management

Professional Services Training Onboarding Support

Partnership CSM

CEO

Sales

Renewals / Account

Management

Services

Customer Success

Management

Professional Services Training Onboarding Support

Common In Companies With:High level of product complexityCompetitive sales/renewals

Pros:CSM can be very customer-focusedRenewals aligned with sales motion

Cons:Some level of duplication / overlapSometimes hard to quantify ROI

Where Do You Fit?

Business Maturity

Pro

duct

Com

ple

xit

y

Firefighter

Sales-Oriented

Service-Oriented

Integrated Model

Partnership Model

Best Practices

• Lives in Sales, unless CSM owns all customer revenue

• If in Sales, incent CSM team for opportunities created

Up-Sell

• Lives in Marketing, but assign dedicated resource focused on existing customer marketing as part of virtual team

Customer Marketing

• Customer Success Manager trending, as Account Manager often has connotation of Sales

Titles

Should CSMs be on a variable compensation model?

• Sales: Up to 50% or more• Renewal Managers: 25-35%• Customer Success Managers: 15-20%

What should the variable component be based on?

Renewals?

QBR Feedback?Net Promoter Score?

Cross-Sells? Up-Sells?

Customer Calls?

Service Referrals?Meetings?

References?

Should CSMs be on individual or team goals?

Should they be compensated on over-achievement?

Team Size = 5 CSMsRenewal quota = $10MBase to Variable = 85:15Base + Variable (if quota is met) = $100K/CSMTotal variable pool for the team = $75K

Revenue saving = $1MCost = 25% of $75K = $18.75K

Achievement (of quota)

Pay

< 80% Zilch!

90% 85%

100% 100%

110% 125%

Customer Success is a common thread in each element of growth

New BookingsUp-Sell and Cross-Sell

Renewals

1 2 3

Customer Success makes existing customers happy and reference-able

Primary metric for measuring Customer Success (supported by renewals sales)

Happy customers buy more (supported by install base sales)

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.

Questions?

THE OFFICIAL CUSTOMER SUCCESS

GUIDE TO DREAMFORCE----x----

dreamforce2013.gainsight.com

Thank You!

THE OFFICIAL CUSTOMER SUCCESS

GUIDE TO DREAMFORCE----x----

dreamforce2013.gainsight.com