KPIs for Customer Success Managers

This post is part of the CSM basic skills series. See more posts in the series here, here, here, and here.



The work of Customer Success Managers (CSMs) is complex and often subtle. How can we appropriately gauge their success?

Before you start setting goals and targets, you need to clarify a couple of points:

  • What is the maturity level of your organization? In startups, customer success is often all about eliciting testimonials and referrals, while mature organizations seek to avoid churn.
  • What’s the main goal for customer success? Some organizations focus purely on retention, while others are basically sales team for existing customers.
  • How specialized is the customer success team? If a specialized team, onboarding specialists will need to be measured by successful onboarding experiences, small-customer CSMs by successful response to pre-programmed cues, and strategic-customer CSMs by the expansion of the relationships they own.

That said, here’s a sample set of goals for CSMs who own specific customers:

  • Retention, defined as a percentage of renewal dollars. The target is usually high, at least for enterprise customers (95%), and this goal has by far the highest weight compared to other components–50% and (way) up.
  • Expansion, defined as hitting a target for add-on purchases. Expansion targets vary wildly among my clients, along with the definition of what constitutes an expansion purchase. For a few vendors, CSMs handle all add-on purchases independently. Other vendors designed automated mechanisms to capture opportunities suggested by CSMs and closed by account reps. and recognize expansion revenue on closure. And some include all add-on purchases made by the CSMs’ customers, whether suggested by them or not.
  • Engagement, defined as the depth and quality of relationships into the account. This can be measured by a survey but, at least for enterprise-level CSMs, a better approach would be to capture the number and depth of the executive relationships the CSM maintains. (I did not say it was easy to do, just that it was a better approach!)
  • Reporting, defined by the quality and timeliness of customer scorecards. I find it useful to devote a modest portion of CSM goals to the quality of the data the CSM shares with the rest of the organization. Accurate reporting improves the ability of driving voice-of-customer programs and also improves churn forecasting.

What are you using for your customer success KPIs? Please share in the comments. And ask if we can help you design KPIs to meet your unique requirements.

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