One of the topics we discussed was Compensation and Incentives. Here are a few of the questions and the corresponding topics that we discussed:
1. Does your company incentivize CSMs on individual or team targets?
2. What metrics are CSM incentives based on? (Examples: retention, satisfaction, adoption and advocacy).
3. Have any organizations implemented CS-oriented bonus plan? Does variable compensation model works best for Customer Success Managers?
4. Are CSMs incentivized based on expansion or advocacy targets?
5. How are the CSMs targets tracked?
6. What are the leading (adoption) and lagging indicators (renewal) that you track to know a CSM is on track to achieve their quota?
7. What are the guiding principles while determine incentives for CSMs (Simple and easy to understand payouts, reward performance driving the right behavior etc.)?
8. Does CSM compensation structure vary across different customer segments?
9. Are CSMs compensated on outcomes (Renewal or expansion) or activities (EBRs held, calls made) or a combination of both?
10. What is typical percentage of base pay vs. variable pay? (80% base, 20% variable or bonus).
11. What percentages of quote comes from renewal vs upsell? What are quota accelerators for renewal? Eg. more bonus for a 2 year renewal vs 1 year renewal.
12. How do you determine accelerators for upsell?
Discussions around the table:
1. Reluctance of Account Managers to share % Commission with Customer Success (in particular on upsell)..
2. Impact on customers when Customer Success becomes incentive based
(Customers second guess motives if they think that Customer Success is incentivized on financial targets)
3. Recruiting good CSMs in London - already demanding a high base salary + variable comp + performance based bonuses (message resonated across the table with regards to base salary being inflated due to demand)
4.Table agreed that CSMs should be rewarded for the ongoing success of their customers
Please share your best practices on this thread to keep the conversation going (include the specific question in your post). Please also follow this thread if you're interested in additional Circles of Success activities related to Compensation and Incentives.
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