What are the benefits of having clear measurement of CS performance?

Performance measurement keeps companies on track to achieve strategic goals – CS performance measurement should inform and track progress that aligns with board level and company-wide objectives, regarding revenue and other strategic initiatives.

Transparency helps team members understand their impact – performance metrics help CS team members understand why their work matters and how their daily activities directly connect to the company’s broader goals. This clarity gives purpose to their work and demonstrates the value they bring to the organization.  

How should CS performance measurement align with key company objectives? 

Performance alignment relies on trickle-down goal-setting that starts with clarity at the strategic level – objectives and performance measurement should start company-wide and inform every level of the organization. 

The trickle-down process has 3 steps:

• Step 1: Establish clear goals at the C-level – executive alignment is crucial to establish strategic pillars or OKRs that will guide each department in the right direction. Once these goals are identified, they should be clearly communicated, shared at the board level and used to aligned across the organization
• Step 2: Map company-level goals to department-level activities – functional leaders then translate strategic goals to their teams’ day-to-day goals and activities. This ensures that the department’s priorities support company-level goals while driving shared purpose across the organization.  Every goal at the team level should be easily mapped to a company-wide objective.
• Step 3: Connect operational goals to individuals – this final step enables team members to trace how their individual contributions connect to both the success of their department and company-wide priorities.  Day to day should be traceable to where the overall company is going.

Adapt this framework based on team size – the goal of this process is to drive clear communication and alignment across all levels of the organization, not to produce a specific quantity of goals. Early-stage companies might only need 2 levels of goals, while larger companies might require additional layers.

How do you divide responsibilities between Customer Success (CS) and Account Management (AM)? How do you define the boundary between CS’s and AM’s key activities? 

While their activities overlap throughout the customer lifecycle, the boundary between AM and CS is defined by accountability:

• AM → accountable for generating revenue and delivering on revenue forecasts.
• CS → accountable for protecting revenue, retaining logos, and providing customer success.

Note: customer “support or care” can be distinct from “success” – this distinction typically becomes more pronounced as an organization scales. 

Map their activities across a Venn diagram, not a RACI – rigidly dividing areas of shared responsibility creates gaps and/or unrealistic expectations about who does which activities and how. Instead, use a Venn diagram to identify and define the overlapping activities that drive the greatest impact for company value and customer experience.

How shared AM and CS responsibilities manifest differently
Example 1: Cultivate strong customer relationships
AM responsibility	Align with economic buyer
CS responsibility	Work closely with day-to-day users and operational stakeholders
Example 2: Stakeholder expansion and growth
AM responsibility	Own the vision for the stakeholder map and drive its evolution
CS responsibility	Provide insights from day-to-day relationships to help AM realize that vision

Measuring Performance

How should CS’s approach to performance management vary based on sales motion or size?  

Customer relationship maturity drives CS metrics – what you measure depends on the maturity of the relationships to date:

• Less mature relationships – primarily email-based relationships based on digital interactions and solving tactical problems with historically small and narrow deals.
• More mature relationships – regular face-to-face interactions (virtual and/or in-person) and strategic conversations that involve you as a thought partner in developing longer term business strategies and selling more complex deal structures.

Size doesn’t determine the metrics you should be tracking – bigger companies don’t necessarily have more sophisticated sales motions and performance tracking needs. For example, a large company might still have relatively immature customer relationships (albeit a larger volume), while an early-stage company might already have 1 or 2 mature relationships, but less market penetration.  

What are the most important metrics for CS to track performance at the team level?

Baseline CS metrics are relevant for all levels of customer relationship maturity – all CS teams should track the metrics in the chart below, and layer in additional metrics depending on the nature of their customer relationships. 

Baseline CS Metrics
Metrics	Definition	Benchmark	Notes
Net Revenue Retention (NRR)	Total recurring revenue (including expansion revenue) minus revenue churn	Min: 80% Target: 100-110%	NRR is a good hybrid metric for evaluating CS and AM together.
Gross Revenue Retention	Recurring revenue (excluding expansion revenue) minus revenue churn	Min: 85% Target: 90+ %	GRR can help isolate CS performance.
Retention	The rate at which clients renew	Target: as close to 100% as possible	Retention benchmarks depend on the state of your business and your position in the industry.
End User Utilization	The extent to which end users use the product	Varies based on internal usage benchmarks.  This can also be tied to revenue targets depending on the pricing model used.
Customer Engagemen	How often your day-to-day contact engages with a CSM	Engagement targets depend on the customer’s needs, maturity, and Segmentation plan. For example, if you are working through an issue with a customer, you might aim to speak with them for 5-10 minutes per day instead of holding weekly calls. Targets can also depend on maturity and/or upside potential: • Mature w/ high upside: monthly cadence (includes reporting and tracking) + QBRs + more regular “touches” • Less maturity and low touch Segment: Regular reporting and messaging with some automation and invitation to connect as needed
Health scorecard	The risk that an individual customer will churn	A basic Green, Yellow, Red scoring is most effective. Simple is best here.	Different variations can be used across the maturity spectrum. The contents of a scorecard evolve as relationships grow and mature.

Maturity-Driven CS Metrics
Immature relationships – focus on specific interactions		• Stakeholder introductions • Stakeholder evolution (turning a stakeholder from someone you meet once online into someone you have a regular cadence with) • Stakeholder expansion (getting stakeholders to introduce you to others and strengthen the foundation of your relationship) • Onboarding time-to-value • Onboarding completion rate • Usage of existing products • Logo Retention – churn can be very educational at this stage • Initial sense of value (are we delivering on why the customer bought our product/service?)
More mature relationships – focus on continuity		• Renewal rates • Multi-year contract commitments or recurring contracts • “Enterprise level” deals, include multiple or all products • Strategic planning meetings  • Business case discussions on value   These metrics indicate CS’s ability to demonstrate product value (and therefore facilitate renewal), make customers comfortable with the price point, discuss business cases with the customer, and work with sales on messaging and stories to support price increases.

Remember that maturity-driven metrics exist on a spectrum – for some businesses, booking 1 strategic planning meeting or getting the customer to attend 1 Zoom meeting is a huge win.

Some critical CS metrics are shared by AM – don’t forget to ensure alignment between the metrics that you use to measure the success of CS and AM. The teams’ overlapping responsibilities lend themselves to a similar Venn diagram of key metrics. 

How should you balance leading vs. lagging indicators in your performance framework?

Focusing on value should prevent lagging indicator problems – lagging indicators such as churn are important to measure, especially from a company goal-setting perspective. However, the majority of CS performance evaluation should prioritize identifying and resolving upstream issues before they become serious downstream problems.

Customer health scorecards are the crucial leading indicator – each account’s scorecard should be either red, yellow, or green depending on 4 criteria:

(Note: both criteria and targets should be adjusted based on maturity)

• Stakeholder Engagement – number of and types of conversations, number of engaged stakeholders, stakeholder mix (economic buyer, influencer, champion, detractor, etc)
• Product / Service breadth – do they use only 1 of our products/services, more than 1, or all?
• Product / Service usage – this should be measured and reported across products
• Qualitative relationship feedback – always leave room for the CSM to share what they’ve learned from their relationship
• Surveys data if needed (see below)

How do you gather sufficient feedback from customers to understand CS’s performance?

Collect organic feedback through regular interactions – CSMs should consistently check in with clients during touchpoints (1:1s, regular cadences, QBRs or surveys for CSAT). I don’t recommend forcing these questions, but where you are able to organically check in on customer health and satisfaction, possible questions include:

• Are you getting what you need from me/us?
• Is the value of our product / services clear to you and your team?
• Do you feel that we’re helping you or your team do your job more effectively?
• Do you feel we are reliable and reachable as needed?

Use occasional surveys – periodic surveys (2 times per year) can help gather structured feedback, but be light touch to avoid overwhelming customers with too many requests.

Monitor feedback trends over time – measure whether the customer’s experience improves and their product set usage expands as they progress through the customer lifecycle. 

Always circle back to clients after fire drill situations – for example, if a client calls you because an alarm or serious issue went off in the middle of the night, simply resolving the issue is not enough. CSMs should have at least 1 follow up conversation in which they acknowledge the problems this caused for the customer, take ownership of the situation, and confirm that the client is seeing improvements.

How do you measure the effectiveness of CS feedback loops?

​​Use quantitative issue tracking to evaluate CS-Product feedback loops – systems like JIRA let you log issues and feature requests and track whether those issues are open or closed.

Close the loop with customers to evaluate the impact of feedback on the customer experience – if a customer raises an issue that Product marks as “resolved”, it is CS’s responsibility to touch base with the customer and determine whether Product’s solution solved the customer’s problem, or just a technical problem.

Managing Performance 

What are the most effective meetings and rituals to help organizations measure performance across the CS team? 

Establish weekly team review meetings – use standardized dashboards to review team performance metrics. These meetings should focus on identifying trends, broad challenges, and successes.  This should build the sense of being a team and marching toward a shared team goal.

Use dashboards to drive dialogue and questions – dashboards reviews shouldn’t be performance conversations. They should evolve over time as customer relationships mature and encourage attendees to think more strategically about their roles.

Maintain separate 1:1 performance discussions – CS managers should use private meetings to discuss individual performance metrics (in contrast, sales teams often call out individual performance in group settings due to the importance of hitting individual and team-wide quotas).

What tools do you need to track and measure CS performance? How do you improve data management? 

Leverage your existing CRM – continue to use your existing system until it no longer works for you. The simpler your systems, the more transparent your reporting.

Prioritize data hygiene before investing in more sophisticated CS-specific tools – ensure that your CRM is being used consistently across teams. Establish clear rules for data entry, field ownership, and reporting to create a reliable foundation for performance measurement. Use AI to auto populate as much information as possible.

Define who owns what information – once multiple team members are involved with each account, data entry and system use become more complex. Clarify who is responsible for what information and where that source of truth should live.

How do you adjust performance expectations if you miss a forecast?

Involving CS and Sales leadership in revenue forecasting creates more accurate performance expectations – relevant leaders should be closely involved in forecasting expected revenue from existing and new customers. Leaders should maintain a pulse on their clients and industry, which allows them to contribute to realistic 12-month rolling forecasts.

Significant deviations from CS- and Sales-approved forecasts may indicate performance issues – use realistic forecasts as benchmarks. If you miss your benchmark by a meaningful amount, consider whether the team is correctly aligned to customers or if something broke down in your forecasting and Sales processes.

Account for extraordinary circumstances – some events (e.g., Legislative changes, natural disasters, overall industry changes, etc.) create unexpected disruptions that impact KPIs but aren’t reflective of CS performance.  This could be an opportunity to change the overall GTM approach, and existing customer relationships are incredibly valuable during these times.

How should customer accounts be mapped to CS team members? 

Segmentation type	How to approach
Account segmentation	Segment based on existing maturity and growth potential – low maturity accounts with limited growth potential typically require a more tactical CS approach, whereas high potential accounts benefit from a more strategic approach.
Staff segmentation	Match team experience and career goals to customer segments – individual skill sets, experience, and personal priorities should all contribute to mapping. Some CS professionals prefer more tactical relationships, while others enjoy being involved with more “sales” type activities and excel at strategic enterprise accounts.   Consider personality mix – working styles and even personal interests can determine the effectiveness of your mapping strategy. Sometimes, putting the right personalities together is more important than choosing each team member based solely on experience.

Adjust ratios based on segment value and automation capabilities – in general, higher value accounts require more attention, but there can be significant variation in how many accounts an individual is assigned to:

• Top tier accounts – 1 CSM might own 4 large, strategic relationships (7-8 figure contracts).
• Lower tier accounts – 1 CSM could own up to 50-70 tactical, lower value accounts depending on automation.

Structuring Compensation

How should compensation for a CSM be structured? 

Balance base and variable compensation – CS roles typically have lower variable components than AM roles. CS variable compensation should be performance based (not commission based) and is more likely to contribute to a bonus than a base salary. The specific split depends on the role:

• CS individual contributors – 80-90% base, 10-20% variable
• CS leaders – 70-85% base, 15-30% variable

Variable compensation should be linked to specific performance targets for KPIs such as:

• Retention rates
• Customer health scores
• Renewal rates or multi-year contracts
• Time-to-value/onboarding efficiency
• Customer referrals

Option: use 6-month spiffs to incentivize performance around a maximum of 3 KPIs – since early-stage companies have rapidly evolving goals, bonuses or spiffs can incentivize short term behaviors, especially with a customer base defined by less mature relationships. CS teams can spiff things like:

• Stakeholder introductions
• Cross-sell/upsell opportunities (when CS and AM roles have meaningful fluidity/overlap)
• Other time-limited strategic initiatives

Note: if you plan to spiff for 12 months or longer, the behavior you’re incentivizing should become part of your regular compensation plan.

Overall

What are the most important things to get right?

Create space for qualitative feedback – leave space in meetings and reporting for customer facing team members to tell stories about customer interactions and share qualitative insights. Quantitative metrics are critical, but equally critical information comes from conversations that don’t show up in metrics (e.g., your main contact is looking for a new job, a client organization is shifting priorities, budget cuts are on the way).

Remember that your customers are human beings – balancing information exchange with having natural and organic conversations that foster authentic relationships is the art of this role. Balancing is hard to do and extremely valuable when done well.