Account Managers Vs. CSM's

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Sharmila Nandwani- Nigam
Sharmila Nandwani- Nigam Member Posts: 6 Seeker
edited July 2020 in CS Org Conversations

Generally Account Managers are compensated more than a CSM and for those organizations that provide commission, AM's receive a bigger "piece of the pie".  

Do you think this will change/shift in organizations ad the value of the CS department gets more attention?

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  • Jay Nathan
    Jay Nathan Member Posts: 108 Expert
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    edited April 2020
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    If done correctly, AM plans are more heavily weighted toward variable comp than CSMs. AM comp plans are commonly 60% base / 40% variable with accelerators for upside. Could even be higher variable for more senior / enterprise type reps. 

    CSMs on the other hand typically have 20% or less of their on target earnings (OTE) as variable. The downside is lower for the, so naturally the upside is as well. 

  • Joshua Maberry
    Joshua Maberry Member Posts: 8 Seeker
    edited April 2020
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    I think that question depends on where the Customer Success Team is positioned in the company. If the CSM's are in the sales org I can see them getting more commission based off upsell/cross sell/renewal.  However it makes sense that the AM's receive a bigger piece.  Typically the AM is lower base salary and relies heavily on commission.  It is also the AM's responsibility to hunt "net new" opportunities to continue to grow the bottom line.  So unless the CSM's are going to be more active in selling, and accept the same level of risk that AM's do, then CSM's will continue to stay in the same position.  My team does not sit in the sales org and I'm working on making the justification to add a bonus structure based on upsell/retention/cross sell.

  • Vijaya Vardhan P
    Vijaya Vardhan P Member Posts: 13 Contributor
    edited April 2020
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    Great discussion point. 

    1. Account managers are typically compensated against a fixed revenue target. Either they get their commission or they do not. The fixed nature of their targets makes the pie fixed too, be it big or small 
    2. CSM's are typically measured against a retention target that is at best, predictable. In my opinion, this will change when organizations see CS as a profit center rather than a cost center. For example, how much has the CSM contributed towards a retention, or towards preventing a churn etc.. needs to be discussed and defined. 
  • Sharmila Nandwani- Nigam
    Sharmila Nandwani- Nigam Member Posts: 6 Seeker
    edited May 2020
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    Thank you.  

  • Sharmila Nandwani- Nigam
    Sharmila Nandwani- Nigam Member Posts: 6 Seeker
    edited May 2020
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    Thank you. 

  • Jay Nathan
    Jay Nathan Member Posts: 108 Expert
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    edited May 2020
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    Tangentially related, here’s an article Boaz Maor and I just published on this topic: https://www.gainsight.com/blog/who-should-own-renewals-and-upsells-sales-or-customer-success/?utm_source=linkedin&utm_medium=social&utm_campaign=blog&mkto_s=social&mkto_m=linkedin&mkto_c=blog

     

  • David Ellin
    David Ellin Member Posts: 170 Expert
    Name Dropper Photogenic First Anniversary First Comment
    edited May 2020
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    There's certainly a pattern to the answers above so I won't repeat the AM commission answers.

    I do think there will be a move toward more variable comp for CSMs as companies realize the benefits of CSMs becoming more commercial - up-sell, cross-sell and renewals.

    I just hope the variable comp for CSMs does not get too heavily weighted. Effort goes to where the money is. If variable comp is too high, there will be less effort on driving success and more effort on revenue growth. That would not be great for driving true customer success.

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