XaaS Customer Success Managers Part I: CSM Job Definition

The Customer Success team is critical to helping customers realize value from their solutions.

Happy customers that realize business value will continue to renew (not churn or downgrade) and buy more.

Conceived over 20 years ago, the customer success manager (CSM) job is now a mainstream XaaS job that supports their recurring revenue business. Recognizing its importance, companies have boosted their investments in this team over the past five years. However, there are many questions about this job: How is it defined? How is it deployed and assigned to customers? How is it compensated? We will cover these three questions in a three-part series.

Part I: CSM Job Definition

There are actually multiple types of CSM roles. In fact, Alexander Group participants at a recent event indicated that they had 1-5 types of CSMs, with half having 2-3 versions. The graphic below outlines four CSM architypes and their ownership of Adopt, Expand (Cross-sell and Upsell) and Renewal responsibilities.

Adopt CSM: This is the most common CSM type. As the name suggests, the Adopt CSM focuses on driving solution adoption/usage and monitoring customer health to ensure the customer is realizing value from the solution. Responsibilities can also include building and managing a customer success plan as well as overseeing solution activation, implementation and/or deployment. The strategy for this role is “take care of the customer and allow other sales resources to own the commercial activities.”

Adopt & Renew CSM: This CSM performs similar tasks as the Adopt CSM with the added responsibility of overseeing the renewal contract. This role is commonly used when renewals are auto-renews and/or more administrative reorders as opposed to a resells. In theory, the role’s good work focused on adoption will results in successful renewals. Be careful what you ask for. One Alexander Group client shared, “We gave the CSMs renewal responsibility and it was detrimental…many CSMs left and others focused on the renewal over their customer success activities.”

Adopt, Renew & Upsell CSM: This CSM role is a slight derivation of the Adopt & Renewal role. When overseeing the renewal event includes adding more users or capacity resulting from normal customer growth and/or high adoption and usage driven by the CSM, then it makes sense for the CSM to own the upsell along with the renewal.

Adopt, Renew, & Expand CSM: This completely different CSM role owns both the adoption and customer health as well as ongoing account sales. Sales responsibility includes renewals, upsells and cross-selling new solutions to current and potentially new buyers. This role is basically a traditional account manager.

LAER Ownership vs. Support

It is critical to note that while most CSMs don’t own upsell, cross-sell, or even renewal, they often support those motions. In addition, many CSMs will co-own a motion with another sales job. For example, a CSM may co-own the renewal alongside their assigned seller. The chart below highlights typical ownership vs. support across the LAER motions.

Defining Rules of Engagement

Since most CSMs interface with other sales jobs including account executives, account managers and/or renewal reps, it is critical to lay out each job’s role and responsibility across the customer engagement model and by key stakeholders. Multiple jobs typically have roles in each stage, however their responsibility and who they interface with will be different. One recent consumption client used a pod model (paired AE and CSM). The graphic below highlights the level of responsibility each job played across the LAER motions and their stakeholder alignment.

Talent Profile

Talent for CSMs vary. They can include technical skills for sophisticated IT solutions (similar to a sales engineer), business experience for lines of business solutions (considering hiring your customer), and/or sales skills to close contracts. However, they all require strong relationship management, communication, problem solving and data management skills.

Stay tuned for Part II: Deploying Customer Success Managers and Part III: Compensating Customer Success Managers.

The Alexander Group provides consulting services to companies building out their Customer Success organizations. For more information, visit Alexander Group’s Technology practice, or contact a Technology practice leader to schedule an executive readout of our latest XaaS research.