Across the globe, 2020 has proven to be an incredibly transformative year, with the global pandemic changing how we work and interact with one another on a daily basis. Looking back at the 2020 Customer Success Salary Report, this year has also had a particularly influential effect on the Customer Success (CS) Industry. As compared to 2019, companies are increasingly growing their Customer Success teams to maximize retention and drive growth from existing customers.
This continues a trend of high reliance on CS teams in the past few years, and with it has come an evolution in the compensation structures for these team members. CS professionals now attest that their bonus structures are tied to company performance, renewals, net retention, upsells, and account health.
Why are these bonus structure characteristics becoming the norm across the industry? They are becoming standard because companies are increasingly recognizing how CS technologies can reduce churn and generate revenue by improving the customer experience.
In this article, we will breakdown the factors shaping today’s CS compensation structure and discuss how these elements come to impact a business’s revenue and overall success.
Customer Success Salary Report: Factors Influencing CS Compensation Structure
According to the CS team members surveyed in the salary report, eight elements were specifically cited as influential to overall compensation. Here is a list of these factors and why they matter:
- Team/Company Performance (Cited by 87% of Respondents): Judged by various customer success KPIs, high team/company performance is marked by enterprise-wide collaboration and action.
- Renewals (Cited by 67% of Respondents): Studies have shown time and again that company growth is directly tied to high customer renewal. By maintaining loyal customers, you can increase customer value and put clients on the road toward brand advocacy.
- Net Retention (Cited by 66% of Respondents): For SaaS companies and other subscription based businesses, customer retention is absolutely essential. As such, net retention is a common indicator of a successful CS team.
- Upsells (Cited by 58% of Respondents): In previous Totango studies, it’s been shown that up to 70% of subscription business revenues stem from upsells and renewals, making them critical to overall company success.
- Account Health (Cited by 47% of Respondents): Customer health scores illustrate whether a client is ready for an upsell, at-risk of churning, or anywhere in between. Good CS teams capitalize on the opportunities made by healthy accounts, while addressing the issues present in struggling ones.
- NPS (Cited by 45% of Respondents): Net Promoter Scores help illustrate a customer’s experience by asking them to rank how likely they are to recommend your product on a scale of 1 – 10. This metric helps determine the baseline opinion of both your company and your service.
- Feature Adoption (Cited by 39% of Respondents): This measurement shows how often a customer is using a product feature that you know is beneficial towards reaching their business goals. If a customer is using the features that will bring them value, their satisfaction rate is likely to be high.
- Onboarding / Training (Cited by 30% of Respondents): As the first stage in the customer journey, onboarding revolves around educating the customer on how to proficiently use your product. The more successful onboarding is, the quicker the client will find value in your product.
Given how all of these elements directly relate to increased revenue, it’s unsurprising that the Customer Success Salary Report also reports that CS teams are trending away from reporting to the CEO, and instead, are reporting to a Chief Revenue Office or Head of Sales figure. Following this trend, many companies are researching how to make their CS teams excel in these areas—the solution to which is found through the use of Customer Success platforms.
Use of Customer Success Platforms Increase Revenue
Customer Success platforms provide CS teams with the tools needed to make the most of each step in the customer journey. By integrating this software into your day to day, you will be empowered to document and share customer data, drive personalized customer engagement, and monitor the productivity of your CS team.
Document and Share Customer Data
With a customer success solution, all client-related information can be easily tracked and shared across your organization digitally. Through this increased communication, you can establish customer needs early on, develop or modify action plans over time, and facilitate cross-department collaborations.
More specifically, these capabilities enable you to:
- Optimize the sales to CS handoff by ensuring that all documented client information is readily accessible prior to onboarding. By not subjecting new customers to repeat questions, you can kickstart onboarding and make progress before your CS team ever meets the client.
- Forecast your renewals, upsells, cross-sells, and churn.
- Enhance the product roadmap with real-time customer data—both qualitative and quantitative. Product teams will want to see feature adoption rates and usage barriers to make informed decisions during roadmap planning and to have more productive meetings with CS and Engineering teams.
Scale Customer Engagement
We operate in a customer-centered economy in which consumers have more product choices than ever before. Consequently, it’s essential that customers feel valued if you want them to stay subscribed to your service. With a customer success platform, you can make this value felt by connecting with customers in a way that directly aligns with their goals and individual usage patterns.
These engagements can scale your work and ensure you are providing the right value at the right time. They can take the form of:
- A great onboarding experience, made possible by actively viewing the customer’s progress and usage metrics: by consistently monitoring incoming customer data, you can stay up-to-date with any developments and digitally intervene if the client isn’t meeting the appropriate goals. Your team can then drive the right value at the right time, setting a strong foundation for the customer as they move towards adoption.
- Timely and informed responses to escalations: negative personal interactions and slow problem resolutions are two of the most common reasons for customer churn. Customer success platforms allow you to avoid both by tracking open escalations, responding to early warnings, sharing what issues have occurred, and documenting the resolution.
- Automated playbooks that allow you to do more with less: if a customer’s usage drops, instead of wasting your team’s precious time sending an individual email, automated playbooks allow them to focus their attention on bigger, more meaningful tasks.
Measure CS Team Productivity
Customer success platforms act as a central hub for reporting on all customer success-related activities and help boost team accountability by answering the following questions for CS Managers:
- Are employees focusing on the highest priority tasks?
- Are employees taking the right steps to drive business results?
- Are employees achieving client goals through meaningful engagements and properly documenting their strategies?
- Are employees maintaining consistent touchpoints and carving out time to meet to discuss roadblocks, successes, and future strategies?
- Are team members completing all tasks in one place to ensure anyone involved in a project is up to speed by simply checking on a task?
- Are tasks linked to one another and kept up to date to ensure a consistent customer journey?
Customer Onboarding Best Practices Set Your Clients up for Success
The 2020 Customer Success Salary Report suggests that CS teams will continue to grow in importance when it comes to revenue generation. To ensure your CS team is set up with the tools they need to keep clients satisfied, investing in a CS platform is the best move you can make. With this technology, you can record your clients’ needs, gain a deep understanding of their usage patterns, recognize signs of trouble early, and capitalize on upsell opportunities when they arise.
Totango’s customer success platform enables a comprehensive understanding of your client base, allowing you to deliver a great customer journey from onboarding to renewal. In these challenging times, you can’t afford to buy before you try. Get started for free today.