Session 7 | CSM Capacity Planning

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Jeff Breunsbach
Jeff Breunsbach Member Posts: 266 Gain Grow Retain Staff
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  • Buckets of work to consider that ties to a customer - who are you assigning to do the work in each? 
    • Commercial
    • Business Domain
    • Technical
    • Relationship
  • Consider launching customer support and making sure that it is working before you consider scaling the efforts of customer success. You need to make sure the “reactive” is taken care of. 
  • Typical planning process for headcount based on the group discussion:
    • Build the engagement model - i.e. what activities are we asking for the CSM to do? How long will it take them? 
      • Then back into how many customers a CSM could take on in that segment of the business
      • Remember to take out about 20% capacity for PTO, personal time and general admin when you associate a CSMs time
    • Put together your ideal scenario based on your engagement model broken down by segments of the business
      • Activities to be performed
      • How long will each activity take
      • Technology overlay
    • Refine the model with FP&A as you look at budget implications
    • As the leader you need to ask yourself: 
      • What is of most importance? 
      • Where does risk lye that I need to make sure and cover?
  • We need to get the mindset away from ARR into something that relates back to ‘Needs’ of our customers business
  • When you begin to expand outside of North America, there are several differences with customers in EMEA, Asia, South America, etc. They expect different levels of service and the markets are at different maturity levels. Be considerate of this within your engagement model. 

David Madeo had a different perspective: 

  1. What’s the minimum base layer of customer success that all customers will get? 
  2. Which customers are at risk and what level of customer success will they need?
  3. Which customers will see growth and what level of customer success will they need?
  4. If you can establish the base layer of customer success - it opens the door for a conversation if a customer wants *more* from your team
  5. Analogy: 
    1. Gym analogy for SaaS companies
      1. Professional Services are physical therapists - they work on specific problems
      2. Customer Success are personal trainers - every week we do something different (what we do changes, but the goal is always the same)

The big question: How do you justify the addition of another headcount? 

  1. Need to have a clear and established model that is agreed upon by the executive team
  2. It makes the conversation ‘easier’ when that is established - you all have the same reference points to work from as you refresh the data

 

Blog: https://customerimperative.com/csm-capacity-and-resource-planning/

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Comments

  • Kevin Mitchell Leonor
    Kevin Mitchell Leonor Member Posts: 248 Expert
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    edited May 2020
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    @Jim Jones your comment on 1M-1.5M on being the average in Chicago, how well has that worked for your team?

    There is a common line of thought in the SF Bay Area of 2M because of Saastr's David Lemkin saying that in the past. I currently manage 3.9M and it is manageable.

  • Jim Jones
    Jim Jones Member Posts: 25 Expert
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    edited May 2020
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    @Kevin Mitchell Leonor the short answer is it's worked pretty well. Many of the products my teams have supported are somewhat less mature technology, and so we had to give the customers more hand-holding. In general, I found $1.5M in ARR per CSM (+/- 20%) has been a remarkably consistent rule of thumb to start with.

    The longer answer - when I get asked about how many accounts or how much ARR a CSM should carry, my reply is that this is the wrong question to ask...it's like asking "how long is a string?" The right questions to ask are:

    1. What do we want the CSMs to do for or on behalf of the customers?
    2. How much time does it take a CSM to execute those things for a single customer?
    3. What's the CSMs percentage of availability per day/week/year (you have to exclude time for training, meetings, travel, etc.)

    Using those inputs, I figure out how many customers a CSM can manage. From there, I start with our largest-value customers and work down, assigning customers to CSMs. That, in turn, ends up giving me the average ARR per CSM.

     

  • Kevin Mitchell Leonor
    Kevin Mitchell Leonor Member Posts: 248 Expert
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    edited May 2020
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    indeed, people are shocked that my portfolio is so high. Well, we are not responsible for support or training, so it allows us to cover a much higher ARR than most. Also, because my product is used for the entire company, our contract value is significantly higher than most.