how to plan, fund and account for your customer success ... fun accoun… · accounting for...

©2015 Gainsight. All Rights Reserved.

How to plan, fund and account for your Customer Success Operation

JEFF EPSTEIN Bessemer Venture Partners


Welcome Panelists

PHIL LOZANO CFO - Virtual Sales &

Customer Success - Cisco

JANET LAWSON CFO - Gild

RUSSELL NICHOLLS VP Finance - ServiceTitan


What are your key customer success metrics?


Key Customer Success Metrics

Renewal Conversion Rate

& Expired Renewals

On Time Renewals Attach Rate

Customer Health Score & Net

Promoter Score Churn

Up-sell

Cross Sell

Land Adopt Expand Renew


Key Customer Success Metrics

•  Health •  Customer Health Score

•  Relationship Score (Verbal, subjective) •  Net Promotor Score (Quarterly) •  Onboarding Health Score (Handoff from OB to Success)

•  Headcount •  ARR per CSM •  Pipeline of New Accounts

•  Expansion •  MRR Expansion •  Product Adoption & Usage

•  Retention •  Net Revenue Retention •  Logo Churn


How do you measure the ROI of your investment in Customer Success?


Customer Success ROI

Present value of Incremental revenues -less investments

Baseline Renewals

Incremental Renewals

Adopt & Expand

Digital Mkt


Customer Success ROI - Gild


Resource Allocation For Customer Success


The Resource Allocation Process At Gild


Where does your Customer Success department report in your Organization Structure?


Customer Success Reporting Structure @ Cisco

WW Sales

Global Virtual Sales & Customer Success Geo Sales

OPEX – Sales & Marketing Expense


Customer Success Reporting Structure @ Gild


Customer Success Reporting Structure @ ServiceTitan

CEO

CX

Implementation

Success

Support

Sales Marketing BusDev CTO/ Product G&A


How do you account for customer success costs?


Accounting across the Customer Lifecycle

Onboarding Implementation

Setup Training

Feature Adoption

Maximize Value Cross Sell

Upsell Retention

Transition from COGS è Sales & Marketing as customer matures

COGS > > > S&M


Accounting for Customer Success Costs

Allocate costs based on the different tasks that a Customer Success Manager drives everyday (training, usage, renewals, etc.)

Allocate costs based on which department the Customer Success Team sits within the larger organization

By Responsibility

By Department

The Y Axis are the two most common accounting cost types of Customer Success •  Sales & Marketing Expense – the costs associated with

selling to a prospect or customer •  Cost of Goods Sold (COGS) – the costs associated with

maintaining, customizing, implementing or training a customer

Source: Scott Golden; http://www.gainsight.com/2016/01/29/how-do-you-account-for-the-costs-customer-success-team/


How do you optimize your resources among Sales, Marketing and Customer Success teams?


Customer Success Resource Allocation

60% 15%

10%

10% 5%

Renewal Sales Adop3on Marke3ng Automa3on Mgt

52%

30%

18%

Sales Marke3ng Customer Success

60% 20%

20%

Sales Marke3ng Customer Success


Customer Success Resource Mix

Digitizing Customer Success

75%

15%

10%

40%

30%

30%

•  Improve sales productivity •  Lower cost of sales •  Increase operating leverage


What’s one key action-item members of the audience can do Monday morning to help improve their company’s Customer Success performance?


Questions

how to plan, fund and account for your customer success ... fun accoun… · accounting for...

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