Appropriate level of touch for top tier

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Wendy Johnson
Wendy Johnson Member Posts: 11 Contributor
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edited August 2023 in CS Org Conversations
Hi all,

My background is in managing in strategic accounts and strategic account CSMs where we had a 1:few (ie 5-10) accounts, with ~$10M  per book. This motion I know intimately. 

Current employer characterizes its Tier A accounts as strategic. Very different scenario, however. 1:50-75 accounts with $5M per book. Yet their expectations are nevertheless that the playbook should resemble one where there is a substantive internal pod and external client alignment call, deep multi threaded relationships, quarterly executive reviews, etc. -- all in a world where alignment around business outcomes has not yet been achieved and supporting playbooks (and supporting templates/resources) have not been developed. In short, a repeatable, scalable process does not yet exist.

In your experience, are current expectations realistic? To me, this feels more akin to a MMKT or well-oiled ENT play.

Very much want to ensure the team is set up for success. Am inclined to advocate for a different kind of touch but thought to reach out to the cmty for input first. Thanks in advance!


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  • Marcus Pemberton
    Marcus Pemberton Member Posts: 1 Navigator
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    edited September 2020
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    I've had a similar problem in the past - the simple way I framed the issue to the board was that, if all we did was quarterly exec reviews, then with 50 accounts per CSM they would be doing four of those per week - far too many to prepare for and execute properly. Scale that up across all of your different required touch points and you end up with an unreachable number of meetings required per week, and your playbooks start to go out of the window.

    The answer is then to either scale up the number of CSMs, impacting the product margins but allowing you to have an Enterprise playbook, or changing the playbook for a different touch model which *may* increase churn. But that choice needs to go back up to the board rather than try and deliver both that current playbook with 50 accounts each.
  • Wendy Johnson
    Wendy Johnson Member Posts: 11 Contributor
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    edited September 2020
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    Thank you, Marcus.  The reality with 50-75 accounts is that we're looking at  4-6 EBRs/month. Even then, I am aligned with your thinking.

    A business case for scaling up cannot be made as there is insufficient data to suggest that CS has any real impact on retention, growth, or customer experience (and if there were data, given circumstances and the reactive, administrative nature of the role, I wouldn't expect the data to be compelling).

    To be determined whether they're amenable to a different touch model. If not, neither the customers, the CSMs nor the business would seem set up for success.

    ------------------------------
    Wendy Johnson
    ------------------------------
    -------------------------------------------
    Original Message:
    Sent: 09-14-2020 08:21
    From: Marcus Pemberton
    Subject: Appropriate level of touch for top tier

    I've had a similar problem in the past - the simple way I framed the issue to the board was that, if all we did was quarterly exec reviews, then with 50 accounts per CSM they would be doing four of those per week - far too many to prepare for and execute properly. Scale that up across all of your different required touch points and you end up with an unreachable number of meetings required per week, and your playbooks start to go out of the window.

    The answer is then to either scale up the number of CSMs, impacting the product margins but allowing you to have an Enterprise playbook, or changing the playbook for a different touch model which *may* increase churn. But that choice needs to go back up to the board rather than try and deliver both that current playbook with 50 accounts each.

    ------------------------------
    Marcus Pemberton
    Relative Insight
    ------------------------------

    Original Message:
    Sent: 09-11-2020 12:07
    From: Wendy Johnson
    Subject: Appropriate level of touch for top tier

    Hi all,

    My background is in managing in strategic accounts and strategic account CSMs where we had a 1:few (ie 5-10) accounts, with ~$10M  per book. This motion I know intimately. 

    Current employer characterizes its Tier A accounts as strategic. Very different scenario, however. 1:50-75 accounts with $5M per book. Yet their expectations are nevertheless that the playbook should resemble one where there is a substantive internal pod and external client alignment call, deep multi threaded relationships, quarterly executive reviews, etc. -- all in a world where alignment around business outcomes has not yet been achieved and supporting playbooks (and supporting templates/resources) have not been developed. In short, a repeatable, scalable process does not yet exist.

    In your experience, are current expectations realistic? To me, this feels more akin to a MMKT or well-oiled ENT play.

    Very much want to ensure the team is set up for success. Am inclined to advocate for a different kind of touch but thought to reach out to the cmty for input first. Thanks in advance!




    ------------------------------
    Wendy
    ------------------------------
  • Scott Hopper
    Scott Hopper Member Posts: 70 Expert
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    edited September 2020
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    @Wendy Johnson they are out of their freaking minds.  The math to meet that kind of touchpoint doesn't as Markus said can't get you there with the time commitment just for QBR or EBR's.  Let alone if you have a couple of accounts with real software issues and just doing diligence to make sure you are talking to all  75 in a regular cadence.   The other piece is who is going to sign on as a Strategic CSM that has been a Strategic CSM.  They know that this is way too many accounts.   Certainly setting a team up for failure if they have the burden to execute on this list of requirements.   It won't happen doing everything right, let alone having to implement scalable process and supporting playbooks.
  • Andrew Marks
    Andrew Marks Member Posts: 54 Expert
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    edited September 2020
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    Agree with Marcus and Scott on this one. Not realistic that you're being "strategic" with a 1:50-75 ratio. What you need to do is model your engagement and capacity with a planning worksheet that lays out all of the activities that you need to do on a daily basis to support both your customer accounts and the broader practice. Layout the reactive efforts, proactive efforts, practice-focused efforts, and the administrative aspects of your job based on a 2040 hour yearly work calendar just so that you can back your assertion up with some data. Best way to start is list the categories of work you do for both customers and internal and build an informal timesheet in Google Sheets and track your time for a couple of weeks, using the resulting data you capture from that to develop a planning model.
  • Wendy Johnson
    Wendy Johnson Member Posts: 11 Contributor
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    edited September 2020
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    Thanks, Scott. I wholeheartedly agree. Helpful knowing that I am not alone in my thinking...
  • Wendy Johnson
    Wendy Johnson Member Posts: 11 Contributor
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    edited September 2020
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    Excellent guidance. 

    Now just need to find the time to do the above while backfilling for ICs who've quit, and identifying/building processes/playbooks. 

    (Am certain your thought bubbles mirror mine!)
  • Russell Bourne
    Russell Bourne Member Posts: 61 Expert
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    edited September 2020
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    @Wendy Johnson, I'm curious as to why your employer defines that many accounts as strategic.  What does the rest of the customer base look like - meaning, how much revenue comes from smaller accounts?

    There's an idea out there that each rep can properly manage about $5M ARR.  I've found that to be about right in my experience whether the $5M is from one enterprise customer or 500 sole practitioners.  

    It doesn't sound like the business case is there to hire more CSMs.  I don't think there's anything wrong with the current CSMs managing 50-75 accounts at $5M ARR, but I do think it's unrealistic to treat them all like enterprise accounts.  Would your exec leadership be open to changing their minds if you show them the expected retention rate of mid-market customers being managed as mid-market?
  • Wendy Johnson
    Wendy Johnson Member Posts: 11 Contributor
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    edited September 2020
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    Russell, honestly, I think that is the only realistic solution -- to make a case for more of a tech touch play to start. And from there to layer on more of a true ENT motion (if the business dictates), once basic supporting, scalable infrastructure is in place in service of the key tier.
  • Russell Bourne
    Russell Bourne Member Posts: 61 Expert
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    edited September 2020
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    Wendy, best of luck - I think you'll find the data is on your side.  One clarification though, I'm not saying tech touch is the answer, because the account segment you're talking about is solidly at the upper end of mid-market.  As @Andrew Marks mentioned in his reply, you might want to plot a customer journey that shows the realistic engagement these customers should/will get from you.  If there are components of the journey you can automate without sacrificing human touch, you can automate them.  Examples would be things like product newsletters, release notes, etc.  I would still include journey elements where the CSMs personally reach out.  What I wouldn't include is in-depth QBRs, expectations of personal support hand-holding, and so on.
  • Wendy Johnson
    Wendy Johnson Member Posts: 11 Contributor
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    edited September 2020
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    Yes, I meant more of a blended touch but one that skews heavily in favor of automation.

    Expectation of intimate, deep account knowledge and deep personal relationships, I would argue, is unrealistic at this time, however.
  • Sunil Nair
    Sunil Nair Member Posts: 7 Seeker
    edited September 2020
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    What's the ratio of CS cost to revenue? Various benchmarks out there, but 3% would be the bare minimum. This assumes that the product is very mature, high levels of automation and self-service in the platform etc.

    50-75 accounts per CSM? That's about one EBR a week per CSM, and one a year for the customer. At a $5m book per CSM, you'd be looking for a lot of tech-touch type automation; trying to run a high-touch model here is going to be expensive without investments in tooling.
  • Wendy Johnson
    Wendy Johnson Member Posts: 11 Contributor
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    edited September 2020
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    Thanks, Suni. 

    Cost to revenue: ~ 8% if all CSMs serving highest ARR tier, ~4% if serving all tiers
    Product: ranges immature to very mature (product dependent)
    Self-service: robust online training modules (paid service) + PS + partner ecosystem
    Tooling: early stages of Gainsight, so little to no automation yet available. Best guess: one year out.
    Retention rates: >92%, even under current circumstances where there is little to no touch


  • Sunil Nair
    Sunil Nair Member Posts: 7 Seeker
    edited September 2020
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    So you have $400k to service a $5m book - it's worth thinking about how best to slice that up. Is that best served by a single CSM + a Technical Account Manager? Or should you have a CSM + TAM + Service Delivery Manager? It's worth then thinking about how best that CSM is supported. Or should you have 2 - 3 CSMs on this book? Also worth considering whether an you could effectively run an offshore TAM/SDM function.

    In terms of self-service, it's worth reviewing any routine tasks that CSMs do - could any of these be automated?

    It's also worth thinking backwards - what is the highest value activity that a CSM does? And rank those key activities from high value to low value - that's going to tell you where to focus, automate, etc.

    At a >92% retention rate - what are the key factors that cause a customer to churn? Someone once told me - "The reasons customers leave is not the opposite of why they stay". This will allow you to further prioritise.
  • Wendy Johnson
    Wendy Johnson Member Posts: 11 Contributor
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    edited September 2020
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    Appreciated, Sunil. I misrepresented the %age. It is, in fact, less than 2-4% if one does not include the onboarding and support. 

    Given headcount, evaluating tech touch + Renewals Manager for lower tiers and CSM + high degree of automation for top tier or the aforementioned with a second strata of CSM for a top segment of the top tier, with a more "traditional" ENT motion. In addition, needing to take into account industry vertical and, to a lesser degree, product line.

    Your approach to activity prioritization and touch allocation resembles mine - thanks for sharing. And love the quote!