Getting To The Real Cost Of Customer Success

The "age of the customer" has had a dramatic effect on organizations.  New positions abound that didn’t exist five or 10 years ago.  One of those positions is the customer success manager.

The concept is to have a team of employees focused on exactly what the position’s title describes – the success of the customer.  However, and ironically, companies have implemented the position to focus on getting additional revenue from the customer instead of ensuring the customer achieves their outcome first and foremost for the lifecycle of the relationship.   The function, as well as the industry of customer enablement and empowerment, remains early despite market rhetoric.

The good news is that things are changing and rapidly.  That is reflected in the challenges the 2015 Customer Success Salary Survey & State of the Profession Report found facing customer success teams. It speaks to the need for companies to rethink and realign the definition of customer success roles:

• Reactive approach to customers
• Time management and focus
• Visibility into customers
• Scaling the team
• Clarity of the role and goals

Totango, a customer success management software platform, released the results from their 2015 Customer Success Salary Survey & State of the Profession Report. The study was based on a sample of 748 participants comprised of Chief Customer Officers (16%), Directors of Customer Success (35%), Customer Success Managers (36%), and other related roles. The respondents were almost evenly split across team sizes of zero to five, six to 25, and greater than 25 team members. "The ranks of Customer Success professionals are growing by leaps and bounds.  It's not surprising that we're also seeing the growing pains of figuring out how to practically translate the ambitious mandate of "customer success" into the nuts-and-bolts of a day-to-day job," shared Kaiser Mulla-Feroze, Chief Marketing Officer, Totango.

2015 compensation levels, compared to 2014, are on the rise with the median annual compensation for:

• Chief Customer Officer / VP of Customer Success between $150,000 and $175,000,
• Director of Customer Success between $125,000 and $150,000,
• Customer Success Manager between $75,000 and $100,000.

The most popular compensation structure is base salary plus bonus (54%) with a small portion of the sample (20%) paid some form of a commission.  The criteria most commonly used to determine bonuses, in my opinion, contributes to the disconnect between the role’s title and customer expectations of the role. Thirty-seven percent of bonuses are based on renewals and upsells and over 55% of bonuses are based on team and/or company performance.  For those customer success managers paid commissions, 57% are based on renewals and upsells, 23% on upsells only, and 20% on renewals only.

Originally published at https://www.forbes.com/sites/christinecrandell/2015/07/09/2015-state-of-the-customer-success-profession/#3aebafc8f3d0