CSM Compensation

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Jude Chiy
Jude Chiy Member Posts: 3 Navigator
edited August 2023 in CS Org Conversations
Hey all,

What is the recommended comp split ratio between base and commission for CSMs for a low-churn, high upsell business? 

We are a high-touch freemium model business with 75% of our customers coming in via the free tier. Even users on the free tiers are assigned CSMs because we have such a high upsell opportunity. Our GTM is get clients initially on the free tier and then work to upsell them to paid tier once they realize value, which is the job of the CSMs. 

I've seen most CSM pay be 75 to 80% base and 25 to 20% commission and/or bonus. 

Anyone have any experience with a more mission-heavy split? E.g. 65 to 70% base and 35 to 30% commission and/bonus? Especially in a low churn, high-upsell business

Pros? Cons?

Comments

  • Kevin Mitchell Leonor
    Kevin Mitchell Leonor Member Posts: 248 Expert
    First Comment Name Dropper First Anniversary
    edited June 2021
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    Today's market has a 77-23 split on average.

    I think the important thing to understand is if your department is foundationally secure enough to start focusing on performance enough to build a bonus structure around it.

    Now.... if leadership is adamant on having a bonus structure, i recommend 85-15 to 92-8 splits and leverage team bonuses instead of individual until you get to a point where you would benefit from individual performance goals. Remember that unless you give all CSMs the same level of opportunity, the results will vary significantly.

    If I gave one CSM 30 high growth potential accounts and another CSM maxed out accounts who bought every product and maxed every license across all employees, CSM 2 will have an issue hitting NRR goals. If leadership still wants an NRR performance bonus, you either need to reorganize accounts (may be more work than worth) or do a team goal.