Ratio of Customer Success Managers to Accounts: What do the Experts Recommend?
After proposing a Customer Success Manager (CSM) structure to a team of leaders at a previous company, the very next question was, "But what are other companies doing?"
I ran across the research I pulled to answer this question the other day, and thought it might be helpful to others to share it, lest they find themselves in a similar position in the future. In a future blog post, I'll share another ratio lens to consider, as well as the one metric I have found that companies forget when setting up customer success programs.
EXPERT: Jason Lemkin (SaaStr)
Jason Lemkin founded EchoSign and NanoGram Devices and is a VC. He has an excellent blog on SaaS philosophy and metrics. His recommendation is one CSM for every $2 million in ARR (annual recurring revenue). He also provides a helpful chart in how that ratio breaks out with deal size:
expert: Totango
Totango is a Customer Success SaaS product. They recommend that you set up your ratio based on product complexity:
Source: http://www.totango.com/customer-retention-cost-report.pdf
expert: Gainsight
Gainsight is also a customer success solution. Like Jason Lemkin, they recommend a 1 CSM for every $2M in ARR, but in a 2014 blog post acknowledge that their ratio was more like 1 CSM for $1M ARR.
In the same blog post, Dan Steinman reveals that while VP of Customer Success at Marketo, their ratio was 1 CSM for every $8M in ARR, and focused on at risk accounts.
expert: Bluenose
Bluenose is also a csutomer success tool, and has had a fairly significant pivot since I did this initial research. As a result, the link that this graphic came from is no longer active. They did not recommend a specific dollar to CSM ratio, but like Totango, recommended a ratio based on complexity:
Catherine Blackmore, Chief Customer Officer, Bluenose, https://community.bluenose.com/bluenose/topics/what_is_the_best_way_to_structure_a_csm_team
expert: Lincoln Murphy
Lincoln Murphy is a customer success consultant, and co-author of Customer Success: How Innovative Companies are Reducing Churn and Growing Recurring Revenue. Lincoln Murphy is not a proponent of CSM to account ratios , stating:
“1 CSM per $2M/ARR.”
That’s not accurate, it never was, and it needs to stop being propagated.”
(My apologies to Mr. Murphy for my further propagation here today.)