Choosing a CSM Compensation Plan

By Kristen Hayer

One of the questions I hear most often from customer success leaders is, “What kind of compensation plan should I provide for my CSMs?”  My answer is always “It depends.” – the typical non-answer you’ll get from any good consultant or MBA!  However, here’s what it depends on, and a framework for thinking about compensation in general.

Variable Comp vs. Salary Only

Many people argue that as trusted advisors, CSMs should not have a variable component to their compensation plan.  I disagree.  I think that most CSM teams benefit from a variable plan as long as it is based on clear goals that align with the company’s mission and initiatives.  People are motivated by money (see my recent post on variable comp), and variable plans can be one of the best ways to drive the behavior you want from your team.

That said, if either of these things are true you should avoid variable comp: 1. Your metrics and goals are unclear or 2. Your executive team does not support variable comp in general.  A team with unclear goals will be frustrated by having a portion of their compensation impacted by something they can’t influence, and if you try to push through a variable plan with an unsupportive executive team you’ll end up fighting for every penny your team earns.  In both of these cases you should offer a salary that is slightly above average (in order to compete), and consider contests or SPIFs as ways to drive desired behavior on your team.

Bonus vs. Commission

Let’s assume you have made the decision to have a variable component as a part of your team’s comp plan.  The next decision you need to make is whether it should come in the form of a bonus or commission.

Commission is terrific for things that are incremental, easy to measure and directly related to revenue (cross-sell, add on features, paid training).  To work well, commission should be a logical percentage of the value of what was sold, and should be uncapped.  The best commission plans reward employees at a higher rate once they have exceeded their goals.  Keep in mind that commission doesn’t need to be limited to things that are sold for money:  If the value of getting customers through an unpaid training program is that they stick around for an extra year, it’s valid to pay commission to the CSMs that sign them up.

Bonuses are a good option for goals that are challenging to measure, project-based or team-based.  In order for a bonus plan to work, the expectations for earning the bonus should be clearly defined and communicated to members of the team at the beginning of the bonus cycle.  Since bonuses are often paid on a quarterly or annual basis, it is also important to regularly communicate with team members about how they are pacing against their bonus plan.  This helps to keep the good behavior you are trying to drive top of mind.

Some of the most effective compensation plans for CSM teams include a combination of commission and bonus, because CSM goals tend to include a mix of selling and project-based work.  If you have a blend of goals consider a variable plan with a blend of commission and bonus.

Annual vs. Quarterly vs. Monthly

Once you’ve decided how to structure variable comp for your team, you’ll need to decide on the term of your plan.  It helps to think about 2 factors as you make this decision – the plan structure (commission vs. bonus) and the seniority level of the role (CSM, lead, manager). 

The structure of the plan can help you to determine how often it should pay out.  In general, commission plans are based on short-term goals like sales this month or renewals this quarter.  If your plan is primarily commission-based, choose a term that corresponds with the goals it is based on.  Bonus plans, as I mentioned earlier, tend to be based on goals that are quarterly or annual.  Again, choose a payout timeline that corresponds to the goals you’re trying to drive toward.

Another factor to consider when deciding on the term of your plan is the seniority of the role.  Front-line employees (CSMs, account managers, support reps) are expected to drive short-term wins and typically have short-term goals.  In order keep these team members focused on and excited about their goals, the variable payout should be more frequent.  On the other hand, more senior team members are often driving toward long-term goals (improving customer satisfaction this year or decreasing churn this quarter).  To keep these team members focused on the big picture, the payout timeline for their variable comp should be longer.

Once you make these decisions, you can move on to deciding on dollar amounts and writing up the plans.  This is also a good time to have a chat with your finance team about your ideas.  They can help you understand how other teams in your organization have set up their compensation plans, and will often have great feedback on things that have worked (or not) in the past.

Need help building a highly effective compensation plan for your CSM team?  The Success League is a consulting firm that works with executives who want to unlock the retention and revenue a top performing customer success team will bring to their business. www.TheSuccessLeague.io

4 Steps To Successful Customer Onboarding

By Jeremy Gillespie

A prospect signs on the dotted line, you hear the sound of a gong and coworkers high-five. At this point it’s easy for everyone to take their eye off the ball and assume the product will do the rest. Instead, as coworkers rejoice, the hard work begins for the Customer Success team. It’s time to focus on onboarding your new client.

Here are 4 steps to ensure successful customer onboarding:

1 - Align on Success

Each customer is a snowflake with their own unique needs and they should be treated that way. Time spent at the beginning of onboarding to thoroughly understand these needs is crucial to delivering true customer success.

Gather as much information as possible from your sales team about why the client decided to buy and what they are hoping to gain from your solution.  Then take the time to have a conversation with your new client about their goals, and define their success metrics. This will give you the opportunity to tailor your onboarding process to each client as well as manage expectations throughout the process.

2 - Establish a Timeline

Once you’ve defined success from your customer's perspective, you're ready to set up a timeline and milestones. A timeline accomplishes a number of things, but most importantly it allows you and the customer to get on the same page about the onboarding process (up next). This step can be an extension of the conversation you have in step 1, and is also a big help in managing client expectations.

Think of milestones as checkpoints along the onboarding journey, to make sure you’re on the right path. Before you start the down the onboarding path, define a clear timeline with expected results at each checkpoint. Use milestones to assess if you’re meeting expectations and correct course if not.

3 - Develop Repeatable Processes

Processes are especially important for growing companies, because they provide a system for onboarding customers quickly and efficiently. Not only do you need the right processes, they need to be repeatable in order to provide consistency for both customers and CSMs.  With repeatable processes, anyone can know where each customer is during onboarding. 

Create an outline of each step in your ideal onboarding process. Once you have an outline, review the steps with your team to make sure you haven’t missed anything. Then carefully go through and write a detailed standard operating procedure (SOP) for each step. This will be the guide everyone follows to provide consistent onboarding. Be sure to communicate these processes with your customer during the timeline discussion.

4 - Identify Points of Contact

When a customer is learning the product and getting everything set up, the last thing they need is a new contact every time they turn around. This isn’t to say that one person needs to handle each customer or every conversation, but there should be specific points of contact during onboarding.

Define a contact hierarchy and clearly communicate (both internally and with your client) who's who. Typically, an account manager or relationship manager are the main point of contact during onboarding. For example, a customer might have an account manager that oversees the onboarding process, an onboarding specialist who takes care of training, and a technical support person who handles software-related questions. In this example, the account manager would be the primary point of contact, and would be responsible for making sure other team members understand customer needs and are pulled into conversations as appropriate.

That’s it. Sounds easy, right? 

In fact, implementing these steps will take time and is an iterative process. Go through each of these steps with your team and carefully lay out your onboarding process. Revisit onboarding quarterly as a team, and send out satisfaction surveys to customers to continually improve. If you nail these four steps you will build a strong foundation for long-term customer success.

Do you need help building a delightful, yet scalable customer onboarding process?  The Success League works with executives who want to optimize customer success efforts and realize the loyalty and revenue that will bring to their company.  www.TheSuccessLeague.io

Jeremy Gillespie - Jeremy is a growth-oriented marketing geek, technology enthusiast and customer evangelist. He loves using complex data to build creative retention solutions. By leveraging technology, Jeremy excels at creating scalable retention marketing programs.  He works for LinkedIn, holds a BA in Communication from the University of Pittsburgh and MBA from Point Park University.  He is a proud former Pittsburgher, but currently lives in San Francisco, CA.

Onboarding a New CSM

By Kristen Hayer

Every HR department longs for new employees to have a smooth, efficient and educational onboarding experience - an onboarding experience that people rave about on Glassdoor.  HR teams are measured on employee satisfaction and low turnover, and having a solid onboarding process is the key to great metrics. 

As a Customer Success leader, your metrics come out of the long-term performance of your new Customer Success Managers.  That said, the onboarding experience is a big part of what gets those CSMs off on the right foot.  It is critical that you partner with your HR team (If you have one!  Don’t worry – we’ll talk about what to do if you don’t.) to make sure that the newest members of your team have the training they need to succeed in the role.

Clearly, things like formal training programs and HR departments come with older, more established companies.  Startups may need to get scrappy about how they accomplish onboarding, but it is still critical.  If your company has been around long enough to be hiring more CSMs, it has been around long enough to have a great onboarding process.

Here are 3 things to consider as you build an awesome onboarding experience for your new CSMs:

Topics

Unfortunately, many companies focus onboarding on one or two of these items, and leave the rest for “on the job training”.  As you’ll see in the next section, there’s definitely a place for side-by-side training, but it’s important that all of the critical topics are being covered with your new CSMs.  Plan in advance who will be providing training, what they will be covering, how the training will be delivered, and when it will occur during the onboarding process.

Key topics to include:

• Company - history, mission, culture and who’s who

• Human Resources – benefits, handbook, directory, who to call, office details

• Product or Service – demo, features, benefits, gaps, road map

• CSM Role – playbook, key contact points, day-to-day job expectations

• Compensation – key metrics, success factors, timelines

• Client Base – territories, key customers, survey results

• Internal Tools – CRM, CSM, ticketing system, billing system, proprietary tools

• Sales and Marketing – team, process, target customers, client expectations

• Goals – team goals, individual goals, company initiatives, timelines

Delivery Methods

You’ve got an amazing HR team that handles onboarding for all of your new CSMs?  Review their onboarding plan to make sure that all of the topics above are covered, and then count your lucky stars!  The remaining 99% of you will need to take the reins on your onboarding plan.  Once you’ve decided on the topics that you need to cover, decide on the best way to communicate with your new employees.  Here are some choices:

Formal Training – Build a slide deck and get those CSMs into a conference room.  Formal training is definitely the most professional of your options.  I like to put formal training programs at the beginning of a new employee’s onboarding plan: It gives them confidence in the organization and is generally the most appropriate format for some of the earlier topics (Company, HR).  If it makes sense, you can run new employees from across the company through formal training at the same time and give your new CSM some connections.

Content Review – This can take the form of a self-guided training program or a more casual review of existing materials.  Giving new employees the chance to review materials on their own gives you a break (if you’re leading the formal training) and also gives the new employee a chance to work at their own pace.  This is a good option for things like your playbook, sales and marketing materials, and the employee handbook.  Just make sure you carve out time for Q&A on these topics so new CSMs have a chance to ask questions.

Shadowing – Have new CSMs sit with current CSMs or members of other teams like Sales, Marketing and Product.  This is a great option for covering team-specific topics like the sales process, product demos, and internal tools.  Keep in mind that watching someone go through a process won’t be enough for your CSM to memorize what to do next time.  A good playbook that outlines internal tools and process is an excellent supplement to time spent shadowing team members.

Timing

Realistically, it takes 3-12 months to get a new CSM up to full speed, depending on your product or service.  While you may have all of the onboarding content ready to delivery on day 1, your CSM won’t be ready to learn all of it immediately.  I like to break onboarding into 3 categories:

Weeks 1-4 - This is your best chance to make a good first impression with your new team member.  Make sure you cover Company, HR, Product, Services, CSM Role and Compensation topics during this period.

Months 2-3 – Just like new clients, the first 90 days is critical for successfully onboarding new CSMs.  In addition to the items you covered in Weeks 1-4, cover Client Base, Internal Tools and Sales and Marketing during the first 90 days.

First Year – Over the course of the first year, your new CSM should continually learn about your team goals and initiatives, as well as receive frequent updates on changes to the Marketing, Sales or Product teams.

Taking the time to make your onboarding experience organized and thorough will pay off by allowing your new CSMs to get going with their clients more quickly and taking some of the workload off your existing team.  It will probably buy you some friends on the HR team as well when they see the lower turnover and great reviews from your group.  And who couldn’t use a few friends in HR!

Need help designing an amazing onboarding plan for your new CSMs?  The Success League is a consulting firm that works with executives who want to unlock the retention and revenue a top performing customer success team will bring to their business. www.TheSuccessLeague.io

Starting Off On The Right Foot - Part 1

By Amin Akbarpour

This is part one of a series on developing the perfect customer onboarding experience. I’ll be driving us through a journey that includes the handoff from sales to customer success, managing a successful kickoff meeting, and executing a clear plan that will help your client take the necessary steps to become successful with your organization.

As a Customer Success agent for a SaaS organization, you’re going to be involved in some level of customer onboarding. If this part of the customer lifecycle falls entirely in your hands, it’s up to you to ensure it runs smoothly and exceptionally well. Even if there is another team that handles the technical aspects of onboarding, you should be involved to ensure the customer relationship gets off on the right foot.  The onboarding period for a customer needs to be a well-structured and documented process. It’s essential to be transparent with all parties so everyone knows what to expect.

Let’s focus on the first step in the process, which ideally begins before the customer even signs the dotted line.

Sales to Customer Success Handoff

The key to a great handoff is a strong line of communication between the sales and customer success teams, especially in the later stages of the sales cycle. At the latest, once a salesperson gets a verbal commit or the agreement has moved into legal, customer success should be brought in.  In some cases it may make sense to bring a customer success professional into a deal at an earlier stage, especially if client service is a differentiator for your company.  Either way, this is when the rep should fill the CSM or Account Manager in on:

• Client Background (size, vertical, financial health, business model)

• Sales Process Summary (how were we introduced? what’s the organization map? why did they buy? What KPIs will the customer be measuring us on?)

• Contract Details (size of the deal, payment schedule, key terms, special concessions)

• Client Environment (what other tools or vendors are they using in combination with ours? what integrations will we dealing with? what’s their experience level and expertise like in this space?)

The salesperson should also be diligently educating the customer on what the onboarding phase will look like. For some SaaS products, onboarding may just be an hour-long training session. For others it could be a three-month marathon. It is important to set expectations early, and connecting customer success to the client early on can be a way to ensure that they are prepared.

Depending on the size of the deal, the salesperson should introduce the CSM to all key contacts either towards the end of the sales cycle or once the paperwork is finished. After that introduction call the salesperson should be the main point of contact for any deal-related tasks, but the CSM should take the wheel for onboarding-related projects and loop in other internal resources when the time is right.

This process should be mapped out, agreed upon by both the sales and customer success teams, and documented wherever you keep your internal processes (Box, CRM, Google Drive). Both teams should be trained on how and when to transition a client from sales to customer success, and the leaders of both teams should monitor the process to make sure it is happening.

Next time, I’ll share my ideas on how you can create the ultimate (and effective) kick-off meeting. Until then, happy onboarding!

Customer Success playbooks are a great way to make sure that your CSMs know exactly what to do in every client situation.  The Success League is a consulting firm that works with executives who want to unlock the retention and revenue a top performing customer success team will bring to their business. www.TheSuccessLeague.io

Amin Akbarpour - Amin is a customer success coach and architect. With relationship-building at the core of his practice, he molds teams by instilling the necessary principles to transform them into trusted advisors. Understanding what's needed for organizational change, he translates theory and ideology into practice and habit. After the aforementioned job hunt he accepted a position as an Account Manager for Persado. Originally from Southern California, Amin is a University of San Francisco alum who is grateful to still be able to call San Francisco his home.