When will CSM's get paid what they are worth?

Marci Scott

I saw an interesting post comparing sales salaries to CSM salaries. I feel like CS is drastically underpaid compared to sales or even presales. It seems as though we should at least get paid as much as our presales colleagues. When do you think salaries will catch up?

Scott Hopper

I would tend to disagree on being drastically underpaid.  Sales are on the hook for revenue.  While pre-sales might be a different story.  But, the challenge will always be on what OTE impact can the CSM own. In general, well executing CSM's have mobility upward in the profession which can lead to better salaries and a large influence in the organization.  A Chief Customer Officer is a big-time role with big-time responsibility.  I'd be ecstatic if someone would pay me to be a CSM, CSE, or TAM.  

The other challenge in the marketplace as the CSM profession grows, the evolution of lower-paying CSM roles will creep into averages.  By this, you have very low-cost services promoting CSM's, an example might be something like Angi/Home Advisor. When I remodeled my house in 2009, they offered us what equated to a CSM to help procure service quotes.  I don't know what they made from it as it didn't cost us. But, my understanding from a vendor's standpoint it was a better use of Customer Acquisition Effort.  Better leads more with customers that were more willing to get work done. 

What I would say is the job is more difficult in a very early-stage company than a mature one and should be rewarded with like combat pay.  As most likely there aren't enough hours in a year on Mars to do all the things that need to get done.

Jeff Heckler

We'd be hard-pressed to find a profession with a wider range of base salaries, comp structures, and OTE ranges than Customer Success.
And rightfully so.
Depending on the model, the product(s), the maturity, the ARPA, the LTV, PLG/SLG/VLG, the list is endless...
I do agree, that on the grand scale, CS professionals are not compensated relative to their value to their organizations, but again, this has to be evaluated on a case-by-case basis.
CS is an underappreciated business function.

Steffany Winkelmann

It's important that your leaders in Customer Success are positioning the value of CS across the company; that means that there needs to be a CS representative (Director or VP depending on your org structure) that has a seat at the leadership table, not reporting to someone who sits at that table. If there is not one, it's clear that Customer Success is seen as a 'cost center' rather than a 'profit center' -- it is this mindset that needs shifting. 

When leadership understands that Customer Success generates profit in the form of long-term ARR, NRR, (GRR) Gross Revenue Retention, referrals, and overall lifetime value, the CSMs will absolutely be compensated fairly. It is when they are seen as 'glorified support reps' that you see unfair compensation.

Scott Hopper

Jeff, 

Agree, it is very much a case-by-case basis and Customer Success means such different things to different organizations. Certainly, it is near the tops in over-worked groups within companies. 

David Ellin

@Steffany Winkelmann, this is so true but there are factors that drive or suppress the value CS is deemed to deliver. One of the biggest factors I've seen in my work across many companies (as a CS leader and CS consultant) is that many CS teams do not own a number. They are "responsible" for many things - onboarding, adoption, engagement, etc. But, they don't own a number that helps to define their value. One example is retention (renewals).

Oftentimes, AEs are responsible for renewals and expansion and the Account Management team "owns" those numbers. Sure, CS contributes to the effort but without ownership, they're stifled and fall into the shadows of the team that owns the number.

If CS leaders want to step out from behind the curtain (from under the CRO), which they absolutely should, they need to take ownership of at least one critical number.

Scott Hopper

@David Ellin should experienced CSM's seek opportunities where the CS Team owns the number to get paid better?

Steffany Winkelmann

You are absolutely right - ownership of a number is exactly what CS needs to be positioned as a 'profit center' instead of a 'cost center' (unfortunately many CS functions get lumped into Support).

As a CS leader I have pushed to own a metric that wasn't yet held by any other team: NRR. While the Sales team has been responsible for ARR/MRR, CS only contributes to it through our various 'responsibilities' as you've listed. But flipping this narrative into a hard number, we can now prove the long-term value with a hard number/metric. The important part of this formula is owning the expansion & renewal, but even if Sales works those deals to secure the expansion, it now means that onboarding, adoption, engagement, etc. can be tied to a number. They won't expand or grow if they don't find value. CS's efforts contribute to that growth, and that number (NRR) is CS's to own.

David Ellin

@Scott Hopper, I don't think CSMs should seek those opportunities just for the sake of increasing their pay. I think they should seek those opportunities if they have an interest in being part of a team that performs that type of work (renewals). Some folks don't want to deal with commercially-related tasks and just want to onboard or drive adoption. That's fine. They should seek the work that interests them (and potentially furthers their career, if that's their goal) - and then get paid fairly for the value they provide and the impact they make.

I'll add one more thing. I always find it interesting that when AE's (sales) handles renewals, they get a commission for the renewal. But when CSMs handle renewals, companies don't often pay a commission. That's inequitable treatment in my opinion. I believe they should get paid on NRR and have the opportunity to earn more when they exceed their goals.

Marci Scott

I agree with you, David!

Plenty of people get paid more than CSM without having a direct tie to revenue; so I don't think it's fair to say when CSM gets tied to revenue they will get paid more. Also, adding commissions on top of a low base still means you are getting paid less then everyone else. 

Stewart Stokes

I agree strongly with the idea of owning a number.  At my prior job, CSMs had full ownership of net expansion (defined as the net sum of churn, contraction, and expansion) for their book of business.  This ownership lead to higher CSM salaries than I'd seen at previous employers and it also gave us an important seat at the table for internal discussions.