Thoughts on sales target approach for CSMs

daniele Member Posts: 4 Navigator
First Anniversary First Comment Photogenic
edited August 2023 in CS Conversations


I lead the CSM Team and upsells have been happening organically and often quite slowly up until now, with no real targets set apart from an overall team target re ARR growth.

We are currently trying to create a more systematic approach so we can add more predictability and forecast upsells accurately. Does anyone have recommendations around this that I could use as a starting point?

The sales organisation has targets around number of opportunities created, generated pipeline and pipeline size. In CS we are revenue generators as well of course but I'm unsure as to whether it makes sense to create targets for the number of upsell opportunities created, pipeline created etc. Is this common in CS? I would love to hear thoughts and examples re what has worked for this community :)





  • Lexi Santiago
    Lexi Santiago Member Posts: 5 Seeker
    Name Dropper First Comment First Anniversary 2023 Success Network - Supporter

    Hi Daniele, I came across this previous thread that might be helpful

  • ashley_martin
    ashley_martin Member Posts: 30 Navigator
    5 Insightfuls First Anniversary 5 Likes First Comment

    My question would be what is the behavior that you are expecting. Pipeline a lot of time is over inflated numbers, so if you are going off pipeline created it may not be addressing your actual goal. I worked for a company where the CSM's had a upsell target every quarter. It worked for us as a team. But our goal was based on upsells closed every quarter. You can pull a report to see what you typically close each quarter by rep and then create a forecast based off of what you are seeing. If you want more revenue growth then what you are seeing you can increase their forecast for a certain % of growth as well.

  • Neha singh
    Neha singh Member Posts: 5 Seeker
    First Comment First Anniversary Name Dropper

    I agree with @ashley_martin on starting with what you are currently closing and increasing forecast for a % of growth (of course taking into account the qualitative factors and drivers impacting the industry for the given time period). I would add one more area to focus here.

    Since you are considering targets for CSMs, their commissions based on those targets will also have to be looked into. What happens when someone over achieves his/ her targets vs someone who doesn't. I am sure, you would have thought about it, but wanted to highlight it since my team always asked about their commission structure following announcement of targets. The biggest question being, if I over achieve my target significantly, say double it, will my commissions increase proportionately to will it be fixed.

  • BetsyK
    BetsyK Member Posts: 1 Navigator
    Photogenic First Comment

    Being a CSM, I think its great to have a bonus tied to it, but as soon as you allocate a target you run the risk of the upsell becoming more important than the journey. This increases the risk of ignoring the long term health of your accounts and only focusing on what will bring in money to you personally. You have to decide which is more important to the overall organization and health of the customers.

  • kmcmullen
    kmcmullen Member Posts: 13 Navigator
    First Anniversary First Comment 5 Insightfuls Photogenic

    Our CSMs are bonused on three things:

    • Full retention (40%)
    • Partial retention (20%)
    • Closed Won ARR (by sales) (40%)

    They can influence the closed-won ARR portion of their bonus by sourcing opportunities, strategizing/territory planning with their sales person, and ensuring clients are happy and in a good spot to consider another sale.

    There are some unintended consequences this has led to in CSM/Sales behaviors:

    • Sales treating CSMs as glorified BDRs. They expect them to set meetings for them, to be on every call with them, etc.
    • Sales/CSMs having every call together which isn't always a necessity
    • Focusing on always trying to pitch a product, rather than build value and relationship rapport with the client. Our conversations can sound VERY "us" focused. We don't really try to understand the "why" for the client, we are just listening for pains for product pitches.
    • Short-term thinking in that sometimes services are pitched that may not be super beneficial to a client because they need that least deal for their number for the quarter... leading to greater attrition in the future
    • Friction as Sales may sell things that the client "didn't need" so when they remove it, it hits CSMs bonus. Sales will sometimes say the CSM slows down the deal, but other times say they speed it up.
    • Skillset: some of our best CSMs are the lowest in pipeline creation, but are rockstars in retention/client relationship. How would you ensure they are celebrated the same?
    • CSMs saying their territory is "saturated" or not balanced compared to others in terms of upsell potential; how strong is your territory planning & how are you balancing accounts equally? Similarly, CSMs saying their "sales person" isn't as "good" and it's not fair... etc. etc.

    Having a sales number makes it really easy to tie back "value" since it's easily quantifiable. But there are some nuances I'd think through before putting something into place!

  • daniele
    daniele Member Posts: 4 Navigator
    First Anniversary First Comment Photogenic

    Thanks for all of these responses- they definitely gave me lots to think about. We have implemented a bonus scheme based on an upsell target for CSMs, where the CSM closes the deal rather than sales. It has been working well but now some CSMs are expressing a dissatisfaction if they have to onboard new customers that don't have big upsell potential. I think we might have to consider a retention bonus to ensure there is a continued focus on this as well. Any recommendations regarding this, what makes sense in terms of how a retention bonus should be structured? And the relationship between this and the upsell bonus?