The One Number Leaders Forget When Building Out Customer Success Models

When you are building your customer success team, you probably spend a lot of time trying to figure out how to segment accounts - do you want to divide up accounts by vertical?  By region?  By MRR?  Or by however sales does it?  And once you come up with the perfect division, you will probably spend a lot of time trying to figure out the right number of accounts per CSM, probably by the amount of ARR each CSM is carrying.  You are also coming up with a plan and strategy about how to use that time:  quarterly business reviews, product updates, adoption reporting, and so on.  

While you are making these choices, the most important thing to consider is how many hours your ratio will allow you to dedicate per client per month. 

In professional services, you assume that there are 120-140 billable hours per month, meaning your team's utilization is somewhere around 75 - 88%.  I like to go with 130, right in the middle of that range, around 81% utilization.  Assuming there is not vacation or time off, this means that they are spending time with clients for about 6.5 hours each day.

Based on that and assuming you treat every client equally, you can assume each month this amount of time:

Number of Accounts	Monthly Hours Per Account
5	26
10	13
20	6.5
30	4.3
50	2.6
100	1.3
200	0.65
500	0.26

As you are building our your account treatment model, you need to think about what you are asking your customer success managers to do and whether or not there is enough time to do those things.  For example, I was meeting with a company recently and they were discussing adding a quarterly business review (QBR) process.  Their CSMs have between 5 - 30 accounts per person.  

Assuming the following:

• A quarterly business review takes about 2 hours to prepare (pulling data, formatting slides, etc.)
• An hour to perform
• An hour to schedule and perform any follow up

We can assume a QBR takes about 4 hours per session.  If you have 5 accounts, that's 20 hours per quarter, or about 5% of your time in a quarter.  But, if you have 30 accounts, that's 120 hours per quarter, or about a third of your time in a quarter.  I have to ask if a quarterly business review is going to return enough value to justify your CSM team spending a third of your time on it.

As you build out your account plan, it's imperative to create a list of activities you intend to do per month and quarter and making sure your team has time to complete those activities.