Customer Success Managers and Sales Commission?
[Update 7th February 2022 – If you are a quota carrying CSM, check out our FREE tool to help you figure out how to achieve your sales target].
CSMs from over 90 SaaS firms participated in our 2016 Customer Success Managers Survey. Over the next few weeks, I will be reflecting on some of the results and asking how the Customer Success community might deal with some of the challenges and issues identified in the survey.
Let’s look at the results that deal with sales commissions and the Customer Success manager.
Facts on Customer Success and Sales Commission
- 70% of CSMs receive commission as part of their pay structure, with 62% of CSMs making at least 15% of their salary from commission. However …
- Only 25% of CSMs are sure they want to incorporate more commission into their compensation package … and
- 51% of CSMs are from a Sales background (they moved to Customer Success from Sales, business development, or account management).
So now for the interesting, and subjective, part. (We all know what people say about assumptions but sometimes it’s fun to speculate.) What can we infer from these statistics?
For most CSMs, commission forms a major part of the cash in their monthly pay packet (if they hit their targets, that is!). Only one-quarter of CSMs, however, want a more commission-heavy compensation plan. This is interesting given that over 50% of those surveyed moved to Customer Success from a sales role.
Are we seeing a tension emerging? It seems businesses are increasingly seeing the Customer Success function as part of their revenue growth engine and are using standard commission-based incentives to help drive this but what if the personality type that gravitates towards Customer Success is not motivated that way? In fact, perhaps a significant cohort of CSMs are de-motivated by sales-based incentives. I ask the question because over 50% of CSMs left sales to move to Customer Success. Could they have moved away from a transactional, commission-based role, seeking one based more on relationship development? Should their compensation plans have a greater weighting in favor of relationship and health metrics?
Customer Success is barely out of infancy, it’s only by asking these difficult questions that we might begin to understand how the personality of the Customer Success department differs from sales or support. What is clear is it is going to take more time and research to begin to refine how we optimize the Customer Success function.
We would love to hear how the role of CSM is evolving at your SaaS firm and how CSMs are incentivized and compensated!
Barry Devon is Head of Customer Acquisition at Akita
barry.devon@akitaapp.com
Follow us @Akita
[If you would like to see how Akita helps SaaS companies retain and grow their customer base, click here to request a DEMO].
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