Should CSM be a SKU'd line item in an SOW? How should it be approached with different tiered custome

Effie Mansdorf

 

Chris Jones (CJ)

Hi @Effie Mansdorf, I would say No. 

My reasoning is that I feel the mindset of a customer towards the things they see in a SOW is that of a Person/Service that they are doing business with, they see it as a commodity that is to be consumed or engaged based on the parameters of the SOW, in short a temporary service that is linked to the duration of the SOW. 

Whereas I feel that as a CSM my role is to become a trusted advisor of my customer, to get them to see me as their strategic partner working with them to achieve the long term goals of their business. To see me as the person that is invested in their long term success and a source of continuity within their account and their engagement with my company.

David Ellin

Man, @Chris Jones (CJ), couldn't have said it better myself.

@Effie Mansdorf, ditto what he said!

Effie Mansdorf

Makes sense for higher tiered, high touch customers, especially when they are already paying a premium ARR. However what about lower tier, lower touch customers? Some of them surely can use a CSM, however the ROI on the higher touch service does not justify the cost of assigning a CS to them. Would it make sense then, do add it as a paid service? 

Jeremy Donaldson

@Effie MansdorfCould you setup a customer success alias - like customersuccess@org.com (a queue for tech touch customers)? Instead of dedicated customer success management, they would have a rotation of whomever is available  to help them then once the company determine their viability is worth a dedicated resource, move them out of the queue? 

Effie Mansdorf

I have not seen success with this model, especially with smaller sized startups, as with my org.  Having 4 CSMs spend the same high touch hours as enterprise, still is the same amount of CS hours. Low touch customers tend to get frustrated with rotating CSMs and learn to depend on it too much, rather than use the resources they get as a tech touch customer. They of course have access to basic support for any tech issues, but they should not get a CSM for the advisory and nurturing roles as there is no ROI for tech touch. Unless of course, they pay a premium for this, which is what drove this discussion in the first place. 

Andy Barton

I agree with all @Chris Jones (CJ) has said. Additionally I think its important to consider what effort is required to onboard a customer and ensure the change is sustained. If there is high effort in both, then its likely that the vendor has charged something for the onboarding service, regardless if it has been done by PS, CS, Support etc... In such cases, I would avoid charging for CS. Sometimes however, there are very intuitive platforms that dont need adoption services, and in addition there are customers who WANT a higher level of touch and skill from the CSM. Its ok to charge for this in such a situation imho. 

Referring to the case of the customer paying for lots of onboarding, this is important as it is typically a different skill set to a CSM. 

Its also important to remember, that when something is charged to the customer, they are far more likely to consume it, than if they got it for free, whatever the price is. 

 

Andy Barton

great Q btw @Effie Mansdorf 

Kevin Mitchell Leonor

In my view, the value received from a CSM will always be measured against that SKU. Not saying it can’t be done, but you are asking for an uphill battle at that point.

 

you are better off determining the best ROI for your company based on what level of service will a customer get a CSM, TAM, or any other professional stakeholder. You could also choose liberties where some smaller accounts with tremendous growth potential gets a CSM even if they have not met the threshold needed

Jay Nathan

These questions often warrant further qualification:

If the CSM is actually playing a named account consulting or technical account manager role then yes. But i wouldn’t call it CSM either. This is what the CSM role looks like at SAP. 
 

Ive been in companies where we charged upward of $70k/year for that role. 
 

That said, outside of this model the CSM role exists largely for our own benefit (indirectly by benefitting the client). So it’s not something you’d want to charge separately for. 
 

 

Effie Mansdorf

@Jay Nathan great point. CSM roles vary in responsibilities per organization. Agree that if the role is more on the TAM side, it warrants a separate line item in an SOW. As you pointed out, while they may be under the CS team, they should be clearly defined as something other than a CSM in this case.

Jeremy Donaldson

@Effie Mansdorf You may need to consider chat help or something besides CSM for those customer then if that is the concern. IMHO, if it is not viable to your business to have a designated CSM to support the account and your don't want to offer it as a premium service, then just be clear with the customer as to what they are getting. 

I use google for my personal email and document services, but that doesn't mean I suddenly expect live support or consulting from their team when I have a question. Sometime you have to pay to play. 

Andreas Knoefel

Exactly, @Jay Nathan . There needs to be a value-add for the customer to pay for premier nurture: Better SLA's, named CSM/AM/TAM. Just asking for the "general CSM" for a lower-touch customer is a warning sign to me that this customer is high maintenance = they internally don't have their act together

Jeff Yeger

I can certainly see the logic in having CS services as a line item - the customer paid for it, so they'll take advantage of the adoption strategies the CSM presents them with, otherwise it was a 'waste' of money. 

With that said we've seen more success in having Sales introduce the idea of CS early on in the cycle (and sometimes the CSM themself;we're a high-touch model). Sales lets the customer know they'll have a one-on-one strategic consultant to work with them, and that they won't be left to deal with our products on their own once the deal closes. 

This way they're looking forward to the advice and expecting it as part of their package. They handoff from Sales to CS is smoother because the CSM was part of the initial cycle and has the background. And the customer doesn't feel the sales 'abandonment' when they never speak to that rep again because of the seamless handoff. 

Also - Commoditizing CS as a line item gives the customer the option to 'opt-out' of the service or the relationship, something that would be a tragedy to the CLTV as we'd always be fighting an uphill battle on adoption and expansion.