[et_pb_section fb_built=”1″ fullwidth=”on” _builder_version=”3.21.1″ custom_padding=”0px||0px”][et_pb_fullwidth_post_title categories=”off” comments=”off” featured_placement=”above” _builder_version=”3.21.1″ title_font=”|600|||||||” title_font_size=”36px” custom_padding=”0px||0px” custom_css_post_title=”padding-top:30px;”][/et_pb_fullwidth_post_title][/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”3.21.1″ custom_margin=”0px||0px” custom_padding=”0px||0px”][et_pb_row _builder_version=”3.21.1″][et_pb_column type=”4_4″ _builder_version=”3.21.1″][et_pb_divider color=”#dfdfdf” height=”1px” _builder_version=”3.21.1″][/et_pb_divider][et_pb_text _builder_version=”3.21.1″ text_font=”||||||||” text_font_size=”18px” text_line_height=”1.8em” header_font=”|300|||||||” header_line_height=”1.1em”]

There are a lot of different approaches to Customer Success compensation and although there may not be one perfect plan, the data below suggests that a variable plan with a bonus will provide the best results. If you consider yourself “Data-Driven” let’s look at some data and how compensation is used to realize your CS business objectives!

Any compensation conversation needs to be in the context of business objectives, which usually fall into four categories… we either want to: 1. Entice talent to join a company, 2. Retain them, 3. Motivate them, and/or 4. Focus their efforts.

[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row _builder_version=”3.21.1″][et_pb_column type=”4_4″ _builder_version=”3.21.1″][et_pb_text admin_label=”1. Review & Gain Consensus – What Are the Numbers Today:” _builder_version=”3.21.1″ text_font=”|600|||||||” text_text_color=”#000000″ text_font_size=”24px” text_line_height=”1.8em” header_font=”||||||||”]1. Review & Gain Consensus – What Are the Numbers Today:[/et_pb_text][et_pb_text _builder_version=”3.21.1″ text_font=”||||||||” text_font_size=”18px” text_line_height=”1.8em” header_font=”|300|||||||” header_line_height=”1.1em”]

  • What are the numbers?
    • Net & Gross Churn ($,#)
    • Headwind
      • Logos Lost ($)
      • Price Erosion
    • Tailwind
      • Expansion (including pricing)
      • Upselling
    • Revenue Past (Actual – 2 yr by Quarter)
    • Revenue Future (Forecast – 2 yr by Year)
  • Define how they are measured
  • Agree upon what they are now
  • Establish what needs to be prioritized

Step one is all about the numbers as they are today. You need to look at Churn, both Net and Gross as well as the components contributing to each. As an example for Tailwind: What percent of your lost revenue is due to accounts leaving? What percent is a function of ACV decreases? Then look at Headwind: What is the percent due to expansion? What is the percent resulting from pricing increases? What percent can be attributed to Upsells? There is no need to try to understand the root cause. You just want to understand the numbers as they are today.

[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row _builder_version=”3.21.1″][et_pb_column type=”4_4″ _builder_version=”3.21.1″][et_pb_text admin_label=”2. Optimize Valuation – Establish How Much Should be Invested & Where:” _builder_version=”3.21.1″ text_font=”|600|||||||” text_text_color=”#000000″ text_font_size=”24px” text_line_height=”1.8em” header_font=”||||||||”]2. Optimize Valuation – Establish How Much Should be Invested & Where:[/et_pb_text][et_pb_text _builder_version=”3.21.1″ text_font=”||||||||” text_font_size=”18px” text_line_height=”1.8em” header_font=”|300|||||||” header_line_height=”1.1em”]

  • Acquisition Costs: CAC ratio
  • Retention Costs: CRC ratios
  • Expansion Costs: CEC ratios
  • Upsell Costs: CUC ratios

[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row _builder_version=”3.21.1″][et_pb_column type=”4_4″ _builder_version=”3.21.1″][et_pb_text admin_label=”3. Create Segmentation: (Customer – Not Sales)” _builder_version=”3.21.1″ text_font=”|600|||||||” text_text_color=”#000000″ text_font_size=”24px” text_line_height=”1.8em” header_font=”||||||||”]3. Create Segmentation: (Customer – Not Sales)[/et_pb_text][et_pb_text _builder_version=”3.21.1″ text_font=”||||||||” text_font_size=”18px” text_line_height=”1.8em” header_font=”|300|||||||” header_line_height=”1.1em”]

  • Some customers are more valuable than others (Always)
  • Segmentation drive priorities
  • Segments drive spend, which drives your tactics

[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row _builder_version=”3.21.1″][et_pb_column type=”4_4″ _builder_version=”3.21.1″][et_pb_text admin_label=”4. Identify What is in Place – The As-Is:” _builder_version=”3.21.1″ text_font=”|600|||||||” text_text_color=”#000000″ text_font_size=”24px” text_line_height=”1.8em” header_font=”||||||||”]4. Identify What is in Place – The As-Is:[/et_pb_text][et_pb_text _builder_version=”3.21.1″ text_font=”||||||||” text_font_size=”18px” text_line_height=”1.8em” header_font=”|300|||||||” header_line_height=”1.1em”]

  • Processes
    • The “Good Stuff”
    • The “Bad Stuff”
    • The Gaps
  •  People
    • How many
    • What expertise
    • Their passion

[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row _builder_version=”3.21.1″][et_pb_column type=”4_4″ _builder_version=”3.21.1″][et_pb_text admin_label=”5. Determine “The” Customer’s Definition of Success:” _builder_version=”3.21.1″ text_font=”|600|||||||” text_text_color=”#000000″ text_font_size=”24px” text_line_height=”1.8em” header_font=”||||||||”]5. Determine “The” Customer’s Definition of Success:[/et_pb_text][et_pb_text _builder_version=”3.21.1″ text_font=”||||||||” text_font_size=”18px” text_line_height=”1.8em” header_font=”|300|||||||” header_line_height=”1.1em”]

  • How is the value you create measured?
  • Are they achieving results/realizing that value?
  • Will they recognize that value is being achieved?
  • Can you influence the value they desire going forward?

[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row _builder_version=”3.21.1″][et_pb_column type=”4_4″ _builder_version=”3.21.1″][et_pb_text admin_label=”6. Create Customer Personas: The Customers’ Renewal & Expansion Team(s)” _builder_version=”3.21.1″ text_font=”|600|||||||” text_text_color=”#000000″ text_font_size=”24px” text_line_height=”1.8em” header_font=”||||||||”]6. Create Customer Personas: The Customers’ Renewal & Expansion Team(s)[/et_pb_text][et_pb_text _builder_version=”3.21.1″ text_font=”||||||||” text_font_size=”18px” text_line_height=”1.8em” header_font=”|300|||||||” header_line_height=”1.1em”]

  • Who are they?
  • Who is the decision maker(s)?
  • How do the various personas define and measure success?

[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row _builder_version=”3.21.1″][et_pb_column type=”4_4″ _builder_version=”3.21.1″][et_pb_text admin_label=”7. Your Company’s Vision of Success for the Customer:” _builder_version=”3.21.1″ text_font=”|600|||||||” text_text_color=”#000000″ text_font_size=”24px” text_line_height=”1.8em” header_font=”||||||||”]7. Your Company’s Vision of Success for the Customer:[/et_pb_text][et_pb_text _builder_version=”3.21.1″ text_font=”||||||||” text_font_size=”18px” text_line_height=”1.8em” header_font=”|300|||||||” header_line_height=”1.1em”]

  • Articulate the “Master Narrative”
  • Create the “Value Path”
  • Identify the “Next Step” that provides value to the customer
  • Use your company’s vision to define customer success

[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row _builder_version=”3.21.1″][et_pb_column type=”4_4″ _builder_version=”3.21.1″][et_pb_text admin_label=”8. Identify the Greatest Opportunity to Increase LTV: (Gross- Net – Cost)” _builder_version=”3.21.1″ text_font=”|600|||||||” text_text_color=”#000000″ text_font_size=”24px” text_line_height=”1.8em” header_font=”||||||||”]8. Identify the Greatest Opportunity to Increase LTV: (Gross- Net – Cost)[/et_pb_text][et_pb_text _builder_version=”3.21.1″ text_font=”||||||||” text_font_size=”18px” text_line_height=”1.8em” header_font=”|300|||||||” header_line_height=”1.1em”]

  • Value vs. Investment.
    • Retention (Least expensive)
    • Expansion (Retention x 2)
    • Upselling (Retention x 4)

[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row _builder_version=”3.21.1″][et_pb_column type=”4_4″ _builder_version=”3.21.1″][et_pb_text admin_label=”9. Execution: (Tactics)” _builder_version=”3.21.1″ text_font=”|600|||||||” text_text_color=”#000000″ text_font_size=”24px” text_line_height=”1.8em” header_font=”||||||||”]9. Execution: (Tactics)[/et_pb_text][et_pb_text _builder_version=”3.21.1″ text_font=”||||||||” text_font_size=”18px” text_line_height=”1.8em” header_font=”|300|||||||” header_line_height=”1.1em”]

  • Understand the “As-Is” and enable your team
    • What doesn’t need to be done?
    • What can/must be done by others?
    • Who do you need on your team to succeed?
  • Identify the options for possible solutions
    • Processes
    • Plays
    • Health Scores
    • Tools… etc.
  • Assess risk & cost associated with each option
  • Decide on your best option and make it happen
    • There are always 10 things to do today… pick one
    • Pick One
    • PICK ONE
  • Define metrics
    • They let you know if you’re doing what you said you’d do?
    • They let you know if your tactics are working?

[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row _builder_version=”3.21.1″][et_pb_column type=”4_4″ _builder_version=”3.21.1″][et_pb_text admin_label=”10. Assess the Effectiveness of Your Actions:” _builder_version=”3.21.1″ text_font=”|600|||||||” text_text_color=”#000000″ text_font_size=”24px” text_line_height=”1.8em” header_font=”||||||||”]10. Assess the Effectiveness of Your Actions:[/et_pb_text][et_pb_text _builder_version=”3.21.1″ text_font=”||||||||” text_font_size=”18px” text_line_height=”1.8em” header_font=”|300|||||||” header_line_height=”1.1em”]

  • If not working… Go back to Step 9
  • If it is working…
    • Make sure customer recognizes and acknowledges your value
    • Take the customer to the next level of value by going back to step 8
    • Monetize based on the value provided

[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]

Published by Tom @ The Successful Customer... "Why Invest in Customer Success?"

I think of myself an operational strategist... I've done a ton of strategy work, but I'm most passionate about turning strategies into results. When it comes right down to it: "Strategy Without Execution is Just a Really Expensive Wish List".

Leave a comment

Leave a Reply