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Just wrapped up a webinar discussion on CS Compensation trends with Ray Rike from RevOps Squared.

  • Summarized the trends from our 2023 CS Comp Survey
  • Discussed how we’ve seen CS comp plans evolve over the last several years
  • Compared the two ends of the spectrum for comp
    • Variable based on Renewal/expansion performance 
    • Variable based on Outcome (typically an Activity, Indicator, or Result)

We had a ton of questions during the session that I wanted to bring to the community.  Dont see you question here? or don’t see an answer?  Create a community post and tag with #compensation! 


First, a set of questions that are answered in the report - so head here to get it! (https://info.gainsight.com/the-evolution-of-customer-success-report-ebook.html)

  1. What is the compensation breakdown for a Director of Customer Success?
  2. Are you seeing a trend of variable pay focused on Net Dollar Retention, rather than something like quota commission + churn target MBO?   
  3. Where do Directors and Sr Directors fall in the comp structure? Did you collect data on that mid-management range?
  4. I’d love to know how size of BoB per CSM perhaps impacts comp/the model if at all. I’d say we tend to land at a much higher customer count per CSM than what’s the industry average.
  5. Curious how this is adjusted for both enterprise CSMs who may have 10-15 accounts and a tech-touch CSM who have thousands.

 

Ray Rike posted an a bunch of highlights on linkedin 💪🏽 

https://www.linkedin.com/feed/update/urn:li:activity:7067177747340517376/

 

How has Customer Success compensation changed over the last 12 months?

How has investment in the CS organization changed over the last 12 months?

The answers and associated benchmarks can be found in the Gainsight and RevOps Squared 2023 "The Evolution of Customer Success Report"!

Some top-level highlights from the benchmarking research conducted across North America and Europe that included 1434 participants:

Investment in CS Organization remains strong:

👉 38% plan to increase CS investment by 6% - 10%
👉 36% plan to increase CS investment by 1% - 5%
👉 23% plan to maintain CS investment at current levels

👆 The above is in an environment where other functions have/are experiencing 5% - 25% reductions

Customer Success Leadership has a seat at the executive table:

$20M - $50M ARR: 33% of companies have an SVP, CS or CCO

👉 23% of companies have a Chief Customer Officer
👉10% of companies have an SVP, Customer Success

$50M ARR - $100M ARR: 48% have an SVP, CS or CCO

👉29% of companies have a Chief Customer Officer
👉19% of companies have an SVP, Customer Success

> $100M ARR: 73% have an SVP, CS or CCO

👉39% of companies have a Chief Customer Officer
👉34% of companies have an SVP, Customer Success

Customer Success Capacity is constrained due to talent supply vs demand and the current linear scaling model of CS resources to # customers or $ ARR - a couple of interesting data points from the research below:

👉 70% of companies assign < 50 accounts per CSM
👉 69% of companies allocate $1M - $5M ARR per CSM

👆 The ability to scale and increase the efficacy of Customer Success will be greatly enhanced with the introduction and refinement of Digital Customer Success - but we are still in the early days of this trend:

👉 38% of participants reported that < 25% of customers have access to a Digital Customer Success program
👉 92% of participants report that "revenue" is the primary variable used to determine which customers receive Digital Customer Success

🔎 What percentage of Customer Success Managers are being measured and compensated on revenue expansion, renewals and/or verified customer outcomes like Net Revenue Retention?
👉 Expansion Revenue: 66%
👉 Renewal Performance: 84%
👉 Customer Outcomes: 24%

Gainsight's SVP, CX + CSOps Tyler McNally, and I will be sharing more of our findings of the benchmark research - coupled with a discussion on "Revenue vs Customer Outcomes" incentive compensation models today at 1 PM PT

You can also gain access to the entire report on the Gainsight website

Pulse 2023 Presentation on CSM Comp Trends and CS Comp Evolution for Gainsights + Rockwell!

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