CSM KPIs to show success to internal stakeholders

DJSargent_CLD Member Posts: 4 Navigator
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Hi everyone,

At my organization, we're exploring how best to show the value (tangible and intangible) that our CSMs bring to the business. Like most SaaS companies it's easier to show how teams like Sales or Renewals are fairing as it's cold hard dollars arriving, but it's more challenging to show CSM functions success.

We have the usual metrics around NRR, ARR managed per CSM, NPS achieved, expansion $ delivered, case studies etc., but keen to understand how others show the value of their teams to the higher-ups in Finance, Operations and HR and especially how these metrics can support requests for growing headcount.

What would you have on a department-level scorecard to show how well your function is performing?



  • Andrew Shoaff
    Andrew Shoaff Member Posts: 25 Thought Leader
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    Hi DJ,

    Couple of initial thoughts: 

    First, quantify improvements in adoption and Time to Value.  That supports improvements in NPS and lower churn.  Improved adoption generally leads to upticks in customer self service training/support resources.  Then look at how improvements in adoption and usage correlate to support deflection for those products or product functions.  

    Related to expansion look at close rates for CSM derived leads. They should be the highest of any source.  See how much total expansion $ was sourced from CSMs vs all other sources.  

    Point is, look at how you can quantify improvements from CS impact the performance of other depts. Easier to get headcount approval when the other depts support that expansion.  

  • DJSargent_CLD
    DJSargent_CLD Member Posts: 4 Navigator
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    Many thanks Andrew for your comments. I like the CSM-sourced expansion leads as a metric to track and show as that is easy for senior mgt to understand.

    Growth in adoption and TTV also good additions!

    Thanks 👍️

  • Ed Powers
    Ed Powers Member Posts: 180 Expert
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    @DJSargent_CLD, I work with many teams to help them define their KPIs and ultimately it boils down to choose metrics that describe effectiveness and efficiency. Effectiveness is how your team specifically raises the chances that customers will stick with you and buy more. Think if it as "doing the right things." Efficiency is how cost-effectively you execute that process. Think of it as "doing things right." Connecting effectiveness to revenue and efficiency to cost is what makes Customer Success investment attractive to your CFO, CEO, and your board. Your KPIs should reflect this focus.

    I recommend you build your KPIs by first understanding why customers leave and why others stay and buy more. The reasons customers provide offer important clues, and you should Pareto the data by both frequency and revenue to help you focus on the high-impact areas. Then for the things your team can influence, look upstream in your process to identify contributing factors. For example, if customers list poor training as a reason for canceling and your team owns training, then collect data on training quality as rated by the customer. Use good statistical analysis to determine if there's indeed a relationship between training quality and retention. Continue to do this for all factors that may influence customer decisions. Use regression analysis to build a predictive model and study the relative impact of the factors. The statistically significant, high impact factors then become your effectiveness KPIs.

    For the efficiency KPIs, measure factors in your process that ultimately lead to higher productivity: $/CSM, Accounts/CSM, CTS, or some other work output/hours worked. These factors typically have to do with time, volume, direct or indirect costs, quality or level or rework. Keep in mind that effectiveness always comes first--it does you no good to become more efficient if you lose your effectiveness. For example, you can load CSMs with more accounts to improve your productivity, but if they can't keep up and burn out, your results will suffer. Balancing, tracking, and keeping a small number of high-impact KPIs (8-10) under a state of statistical control is a manager's first job. The next is to continuously improve the process using formal methods like Six Sigma which makes you more effective and efficient.

    I would also point out that KPIs relevant for some teams aren't relevant for others. I've seen cases, for example, where faster Time-to-Value had zero impact on either NPS or customer retention. Every business is different. You must do your own work to determine the KPIs that are right for you.

    Happy to talk any time.

    Ed Powers

  • DJSargent_CLD
    DJSargent_CLD Member Posts: 4 Navigator
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    Great advice Ed and I'll be working through the effectiveness and efficiency metrics that are most suitable to our business. Thankfully we already do a lot of analysis around customer churn and downgrade reasons so have some data to get started with.

    Thanks again!