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©2015 Gainsight. All Rights Reserved.
How to plan, fund and account for your Customer Success Operation
JEFF EPSTEIN Bessemer Venture Partners
©2015 Gainsight. All Rights Reserved.
Welcome Panelists
PHIL LOZANO CFO - Virtual Sales &
Customer Success - Cisco
JANET LAWSON CFO - Gild
RUSSELL NICHOLLS VP Finance - ServiceTitan
©2015 Gainsight. All Rights Reserved.
What are your key customer success metrics?
©2015 Gainsight. All Rights Reserved.
Key Customer Success Metrics
Renewal Conversion Rate
& Expired Renewals
On Time Renewals Attach Rate
Customer Health Score & Net
Promoter Score Churn
Up-sell
Cross Sell
Land Adopt Expand Renew
©2015 Gainsight. All Rights Reserved.
Key Customer Success Metrics
• Health • Customer Health Score
• Relationship Score (Verbal, subjective) • Net Promotor Score (Quarterly) • Onboarding Health Score (Handoff from OB to Success)
• Headcount • ARR per CSM • Pipeline of New Accounts
• Expansion • MRR Expansion • Product Adoption & Usage
• Retention • Net Revenue Retention • Logo Churn
©2015 Gainsight. All Rights Reserved.
How do you measure the ROI of your investment in Customer Success?
©2015 Gainsight. All Rights Reserved.
Customer Success ROI
Present value of Incremental revenues -less investments
Baseline Renewals
Incremental Renewals
Adopt & Expand
Digital Mkt
©2015 Gainsight. All Rights Reserved.
Customer Success ROI - Gild
©2015 Gainsight. All Rights Reserved.
Resource Allocation For Customer Success
©2015 Gainsight. All Rights Reserved.
The Resource Allocation Process At Gild
©2015 Gainsight. All Rights Reserved.
Where does your Customer Success department report in your Organization Structure?
©2015 Gainsight. All Rights Reserved.
Customer Success Reporting Structure @ Cisco
WW Sales
Global Virtual Sales & Customer Success Geo Sales
OPEX – Sales & Marketing Expense
©2015 Gainsight. All Rights Reserved.
Customer Success Reporting Structure @ Gild
©2015 Gainsight. All Rights Reserved.
Customer Success Reporting Structure @ ServiceTitan
CEO
CX
Implementation
Success
Support
Sales Marketing BusDev CTO/ Product G&A
©2015 Gainsight. All Rights Reserved.
How do you account for customer success costs?
©2015 Gainsight. All Rights Reserved.
Accounting across the Customer Lifecycle
Onboarding Implementation
Setup Training
Feature Adoption
Maximize Value Cross Sell
Upsell Retention
Transition from COGS è Sales & Marketing as customer matures
COGS > > > S&M
©2015 Gainsight. All Rights Reserved.
Accounting for Customer Success Costs
Allocate costs based on the different tasks that a Customer Success Manager drives everyday (training, usage, renewals, etc.)
Allocate costs based on which department the Customer Success Team sits within the larger organization
By Responsibility
By Department
The Y Axis are the two most common accounting cost types of Customer Success • Sales & Marketing Expense – the costs associated with
selling to a prospect or customer • Cost of Goods Sold (COGS) – the costs associated with
maintaining, customizing, implementing or training a customer
Source: Scott Golden; http://www.gainsight.com/2016/01/29/how-do-you-account-for-the-costs-customer-success-team/
©2015 Gainsight. All Rights Reserved.
How do you optimize your resources among Sales, Marketing and Customer Success teams?
©2015 Gainsight. All Rights Reserved.
Customer Success Resource Allocation
60% 15%
10%
10% 5%
Renewal Sales Adop3on Marke3ng Automa3on Mgt
52%
30%
18%
Sales Marke3ng Customer Success
60% 20%
20%
Sales Marke3ng Customer Success
©2015 Gainsight. All Rights Reserved.
Customer Success Resource Mix
Digitizing Customer Success
75%
15%
10%
40%
30%
30%
• Improve sales productivity • Lower cost of sales • Increase operating leverage
©2015 Gainsight. All Rights Reserved.
What’s one key action-item members of the audience can do Monday morning to help improve their company’s Customer Success performance?
©2015 Gainsight. All Rights Reserved.
Questions
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