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Dan Steinman, Chief Customer Officer at Gainsight, and Catherine Blackmore, VP of Customer Success at Badgeville, talk about various organization structures and possible compensation/incentive options to drive Customer Success.
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Structuring Your Customer Success Organization
#customersuccess
Webinar Series
Some Housekeeping• We will have a Q&A session at the end, so keep your
questions and comments coming.
• Use the GoToWebinar chat box and/or tweet using #customersuccess.
• Video recording and slides will be made available soon after the webinar.
• Please fill the survey at the end – we promise it’s short!
• It’ll help us bring you more #customersuccess events and content.
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