Should Your Startup Have a Quota Club? (And How Much to Spend on It.)

December is when most SaaS startups are closing out the year, trying to finalize next year’s operating plan (hint:  I know a software company that can help with that), starting to get a clear view on which salespeople are going to make their number, and thus beginning the process of figuring out who to invite to the annual “Quota Club” (a.k.a. President’s Club, Achiever’s Club, or Sales Club).

In this post, I’ll discuss why Quota Clubs are so controversial and how I learned to think about them after, frankly, way too much time spent in meetings discussing a topic that I view nearly as difficult as religion or politics.

Quota Club is always highly controversial:

  • It’s exclusionary.  Consider this quote my friend Lance Walter heard years ago (I think at Siebel): “the last thing I want at Quota Club is to be lying on a chaise lounge by the pool, roll over, and see some effing marketing guy next to me.”  Moreover, the sales personality tends not to blend well with other departments, so a well-intentioned attempt to send the top documentation writer on a trip with 30 sales people is as likely to be perceived as punishment as it is reward.
  • It’s expensive.  The bill can easily run in the hundreds of thousands of dollars for companies in the tens of millions of annual recurring revenue (ARR) and in the millions for those above that.  That doesn’t help your customer acquisition cost (CAC) ratio.
  • Even the basics of qualification are somehow complicated.  Now, on the face of it, you might that “making quota” would be sufficient to qualify for Quota Club, but in some people’s minds it’s not:  “no, at this company we expect people to make quota, so Quota Club should only be for those at 120% of quota.”  (The idea that maybe quotas are set too low doesn’t seem to occur to these people.)  That’s not to mention minimum attainment rules required to avoid accidents with ramped quotas (e.g., a new rep who sells $400K on a $200K quota.)  Or the intractable problem in decentralized organizations where Country A runs large numbers of junior reps at low quotas while Country B runs small numbers of senior reps at high quotas — so someone who sells $1.25M in Country A attends club while someone who sells $1.75M in Country B does not.
  • Invitations beyond quota-carrying reps (QCRs) are always controversial.  Do consultants who hit their utilization target get invited?  (No.)  Do sales development reps (SDRs) who hit their opportunity goals? (No.)  On what basis do sales consultants (SCs) get invited?  (Depends on SC model.)  Do CSMs who hit their renewals goals?  (Maybe, depends on your customer success model and how much selling they do.)  What about the executive staff?  What about a regional VP or CRO when he/she didn’t make their number?  Who presents the awards to their people?  And this isn’t to mention companies that want to inclusionary and invite some hand-picked top performers from other departments.
  • Guest policies can be surprisingly tricky.  Normally this is simple — each qualifier gets to invite a spouse or partner, with the implication that the company wants to reward the chosen guest for the sacrifices they made while the qualifier was working long hours on the big deal and doing extended travel. What if the guest is a friend as opposed to spouse or partner?  (Well, that’s OK if not quite the intent.)  But what if that friend is coworker?  (Hum, less so.)  What if that friend is another quota-carrying rep who failed to make their number?  (Even harder.)  Or, changing angles, what if their spouse is a sales rep at your top competitor?  What if they run competitive intelligence at your top competitor?
  • Opinions diverge on family policy.   Should qualifiers be encouraged to bring their children?  How about Grandpa to watch them?  Are these family members invited to any events or activities?  Can their pay their own way on the snorkeling cruise if they want to?  Is babysitting covered?  Is the reward for spending too much time away from your family a mandatory vacation away from your family?
  • The business meeting can be a religious issue.  Many sales VPs think Club should be a 100% reward — a complete vacation with no work.  If so, the CFO will take an income tax withholding from each qualifier.  Hence most companies have a business meeting that keeps Club a business affair  — and off the W-2s of the attendees.  Some sales VPs thus think:  do the absolute minimum to stave off the tax man.   More enlightened folks think:  what a great opportunity to meet with our top performers to talk about the business.
  • People can’t even agree on the dress code.  Should the awards dinner be California Casual, Summer Soiree, Creative Black Tie, Brooklyn Formal, or just a regular Black Tie Affair.  (And where do they get these names?)
  • Picking the location is difficult.   The Caribbean isn’t exotic for East Coasters and Hawaii isn’t exotic for West Coasters.  Some people think Clubs should always have a beach location, some think European cities are more exotic.  (By the way, try to find a reliably warm beach location in February or April.)  Should you invest your money in flights to a relatively inexpensive place or get cheaper flights to a more popular and presumably expensive place?  And this isn’t to mention any debates about hotel brands and their significance.
  • In-room gifts can jack up the price.  Club planners seem to love to include special gifts each night.  A welcome bottle of champagne the first night, a beach kit the second, a Tumi backpack the third, and a farewell mini-Margarita kit can quickly add up to $500 in extra cost per qualifier.
  • Planning is intrinsically difficult.   It’s inherently hard to plan when you have 30 QCRs and you’re not sure if 10, 20, or 30 are going to qualify — this is particularly difficult when you plan sales-only Clubs because you have less to fudge in terms of non-QCR attendees.  What do you do mid-year when you’ve planned for 20 and forecast that only 10 are going to make it?  Devalue Club by dropping the qualification bar for some reps or (the same act seen through a diametrically opposed lens) preserve the incentive value of Club by making it a realistic goal for the reps who otherwise had no realistic hope?

Holy Cow, just making this list gets my blood pressure up.  Are we sure we want to do this?  My answer remains yes.

Most startups, once you’re beyond $5M to $10M in ARR, should have some sort of Quota Club.  Here is my advice on how to do it:

  • Define it as the CEO’s club.  You can call it Quota Club or President’s Club, but make it clear to everyone that it’s the CEO’s event.  It’s a big expense (with a huge opportunity to waste a lot of money on top) and it’s full of decisions that are both subjective and polarizing.  Listen to what your current sales VP wants, but make those decisions yourself.
  • Start small.  At MarkLogic our first Quota Club was something like 10-15 people for two nights at the Bellagio in Vegas.
  • Leave room to make it incrementally better each year.  This is what I call Narva’s Rule, after my friend Josh Narva who came up with it.  (By the way, had we better applied his rule, we’d have held the first MarkLogic Club at Caesar’s Palace, saving the Bellagio for the following year — but at least we got the two days part right, leaving room to later expand to three.)  Don’t cover every bite or drink that goes in someone’s mouth in the early years:  folks can get a breakfast croissant at Starbucks or a drink by pool on their own nickel. You don’t need a group breakfast and a pool party to cover it.
  • Be inclusive of other functions.  This lets you recognize a few folks outside of non-quota-carrying sales each year.  (It also makes planning a little easier.)  Don’t be so inclusive that QCR/QCM attendance is less than 50%.  But take all your qualifying QCRs and quota-carrying managers (QCMs).  Add your selected SCs.  Add your qualifying CSMs (according to whatever rules you establish).  Then perhaps add a few folks — based on their helpfulness to sales — maybe from consulting, marketing, product, or salesops.  Helpful e-staff are also good candidates and can benefit from the direct feedback they will get.  Think:  I’d rather run a bit less luxurious event and invite a few more folks from across the company than the converse.
  • Do it at a beach in April, alternating East and West coasts.  Or, if you have a strong ski contingent, alternate between a ski resort in February and a beach in April.  Beware the sales VP will gripe about too much first-quarter time in meetings with a January kickoff and February Club.  But who says you can’t still ski in April?
  • Be family-friendly.  Be clear that kids and family are welcome at the event (at the attendee’s cost) and at most, but not all, activities.  If you have two dinners, make one a bring-the-clan affair and make the awards dinner spouse/guest only.  Let family opt-in to an any easily inclusive activities like snorkel trips. Help folks find and/or pool babysitting.
  • Take the business meeting seriously.  Run the meeting on the morning of day 2.  I like doing attendee surveys in advance (e.g,. via SurveyMonkey) and then doing a detailed review of the results to drive discussion.  This sets the tone that the event is for both fun and business and that the company isn’t going to miss the chance to have a great conversation with its top performers.  Discussing business at Club isn’t a party foul.  It’s part of why you have Club.
  • Stay aligned with event planner, particularly in the early days when you are trying to run a discount event as they will, by default, try to run a standard one.  Skip the bells and whistles like custom event logos, fancy signage, custom beach bags and towels, in-room gifts, and all-meals coverage. Define what your program is going to be and deliver against that expectation.  Then make it better next year.
  • Make and hold to a sensible budget.  Know, top of mind, the total event cost and cost/attendee — and remember that cost/qualifier is about double the cost/attendee, since each qualifier invites a guest.  As part of Narva’s Rule, increase that cost every year. Because I like to make things concrete, I think cost/attendee should range from $2.5K to $5.0K as a function of your typical salesperson’s on-target earnings (OTE) and your company’s lifecycle.  This means the “prize value” of the Quota Club invitation is $5K to $10K, equivalent to a roughly 2-4% bonus against typical OTEs.  On this sort of budget, you can offer a very nice, high-quality event, but you won’t be doing the truly unique, memorable, over-the-top stuff that some CROs like.
  • If you want to have an ultra-club do what we did at BusinessObjects.  While during most of my tenure at BusinessObjects we ran in nice-but-not-crazy mode, towards the end of my tenure there was a movement to make Club truly exceptional and unique.  That first led to discussions on how to trim down Club in order to increase the spend/qualifier, including potentially increasing the attainment bar from 100% to 125% and ending our inclusive philosophy.  I’m glad we didn’t do that.  Instead, we ended up creating an intimate ultra-club as a few days tacked on to the end of Quota Club.  It provided some niche cachet when the attendees were whisked off onto their continuation trip.  It allowed “the movement” to do some truly exceptional things for a small number of people.  Most of all, I think we correctly figured out who the “right people” were — not the one-hit wonder reps who had one big year, but instead the consistent reps around which you truly build a company.  I believe we set 5 years of consecutive Quota Club attainment as the criteria for an invitation to the ultra-club.  I’d invest extra in those people any day of the week.

 

The US Navy Posts Ten-Word Tweet of the Year

Once in a while a phrase or photograph just perfectly captures everything about a given moment.  I think the @USNavy account achieved that in a tweet about yesterday’s passing of George H.W. Bush.  People always say when it comes to communications that “less is more.”  Few writers actually chose brevity.  This tweet captures an enormous amount in just ten words.

(And, in my estimation, this is infinitely more powerful than the alternative artsier version of it, which has about 1/10 the likes.)

Highlights from the Fenwick & West 3Q18 Venture Capital Survey

It’s been a few years since I wrote about this survey, which I post about less to communicate recent highlights and more to generate awareness of its existence.  The Fenwick & West Venture Capital Survey is must-read material for any entrepreneur or startup CEO because it not only makes you aware of trends in financing, but also provides an excellent overview of venture capital terminology as well as answering the important question of “what’s normal” in today’s venture funding environment (also known as “what’s market.”)

So if you’re not yet subscribed to it, you can sign up here.

3Q18 F&W Venture Capital Survey Highlights

  • 215 VC financing rounds were closed by companies with headquarters in Silicon Valley
  • Up rounds beat down rounds 78% to 9%
  • The average price increase (from the prior round) was 71%
  • 24% of rounds had a senior liquidation preference
  • 8% of rounds had multiple liquidation preferences
  • 11% of rounds has participation
  • 6% of rounds had cumulative dividends
  • 98% of rounds had weighted-average anti-dilution provisions
  • 2% of rounds had pay-to-play provisions
  • 6% of rounds had redemption rights

In summary, terms remained pretty friendly and valuations high.  Below is Fenwick’s venture capital barometer which focuses on price changes from the prior financing round.  It’s a little tricky to interpret because the amount of time between rounds varies by company, but it does show in any given quarter what the price difference is, on average, across all the financings closed in that quarter.  In 3Q18, it was 71%, slightly down from the prior quarters, but well above the average of 57%.

vc barometer

 

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Lost and Founder: A Painful Yet Valuable Read

Some books are almost too honest.  Some books give you too much information (TMI).  Some books can be hard to read at times.  Lost and Founder is all three.  But it’s one of the best books I’ve seen when it comes to giving the reader a realistic look at the inside of Silicon Valley startups.NeueHouse_Programming_LostandFound

In an industry obsessed with the 1 in 10,000 decacorns and the stories of high-flying startups and their larger-than-life founders, Lost and Founder takes a real look at what it’s like to found, fund, work at, and build a quite successful but not media- and Sand-Hill-Road-worshiped startup.

Rand Fishkin, the founder of Moz, tells the story of his company from its founding as a mother/son website consultancy in 2001 until his handing over the reins, in the midst of battling depression, to a new CEO in February 2014.  But you don’t read Lost and Founder to learn about Moz.  You read it to learn about Rand and the lessons he learned along the way.

Excerpt:

In 2001, I started working with my mom, Gillian, designing websites for small businesses in the shadow of Microsoft’s suburban Seattle-area campus. […] The dot-com bust and my sorely lacking business acumen meant we struggled for years, but eventually, after trial and error, missteps and heartache, tragedy and triumph, I found myself CEO of a burgeoning software company, complete with investors, employees, customers, and write-ups in TechCrunch.

By 2017, my company, Moz, was a $45 million/ year venture-backed B2B software provider, creating products for professionals who help their clients or teams with search engine optimization (SEO). In layman’s terms, we make software for marketers. They use our tools to help websites rank well in Google’s search engine, and as Google became one of the world’s richest, most influential companies, our software rose to high demand.

Moz is neither an overnight, billion-dollar success story nor a tragic tale of failure. The technology and business press tend to cover companies on one side or the other of this pendulum, but it’s my belief that, for the majority of entrepreneurs and teams, there’s a great deal to be learned from the highs and lows of a more middle-of-the-road startup life cycle.

Fishkin’s style is transparent and humble.  While the book tells a personal tale, it is laden with important lessons.  In particular, I love his views on:

  • Pivots (chapter 4).  While it’s a hip word, the reality is that pivoting — while sometimes required and which sometimes results in an amazing second efforts — means that you have failed at your primary strategy.  While I’m a big believer in emergent strategy, few people discuss pivots as honestly as Fishkin.
  • Fund-raising (chapters 6 and 7).  He does a great job explaining venture capital from the VC perspective which then makes his conclusions both logical and clear.  His advice here is invaluable.  Every founder who’s unfamiliar with VC 101 should read this section.
  • Making money (chapter 8) and the economics of founding or working at a startup.
  • His somewhat contrarian thoughts on the Minimum Viable Product (MVP) concept (chapter 12).  I think in brand new markets MVPs are fine — if you’ve never seen a car then you’re not going to look for windows, leather seats, or cup-holders.  But in more established markets, Fishkin has a point — the Exceptional Viable Product (EVP) is probably a better concept.
  • His very honest thoughts on when to sell a startup (chapter 13) which reveal the inherent interest conflicts between founders, VCs, and employees.
  • His cheat codes for next itme (Afterword).

Finally, in a Silicon Valley where failure is supposedly a red badge of courage, but one only worn after your next big success, Fishkin has an unique take on vulnerability (chapter 15) and his battles with depression, detailed in this long, painful blog post which he wrote the night before this story from the book about a Foundry CEO summit:

Near the start of the session, Brad asked all the CEOs in the room to raise their hand if they had experienced severe anxiety, depression, or other emotional or mental disorders during their tenure as CEO. Every hand in the room went up, save two. At that moment, a sense of relief washed over me, so powerful I almost cried in my chair. I thought I was alone, a frail, former CEO who’d lost his job because he couldn’t handle the stress and pressure and caved in to depression. But those hands in the air made me realize I was far from alone— I was, in fact, part of an overwhelming majority, at least among this group. That mental transition from loneliness and shame to a peer among equals forever changed the way I thought about depression and the stigma around mental disorders.

Overall, in a world of business books that are often pretty much the same, Lost and Founder is both quite different and worth reading.  TMI?  At times, yes.  TLDR?  No way.

Thanks, Rand, for sharing.

How To Present a Quarterly Sales Forecast to Your SaaS Company Board

While most companies put real thought into how they present numbers in their post-quarter board decks and other management reports, one area in which you’ll find a lack of discipline is in how they present quarterly sales forecasts to the board.

They’re typically done as a quick update email to the board.  They’ll usually mention the forecast number this quarter (but only usually) and only sometimes include the plan and almost never include the prior-sequential or year-over-year quarter.  Sometimes, they’ll be long, rambling updates about deals with no quarterly number at all — only ARR per deal on an list of deals with no idea which permutations are likely to close.  Sometimes, they’ll confuse “commit” (a forecast category status) with “booked QTD” — a major confusion as “commit” is only “done” in the eyes of an optimistic sales VP — I have little interest in the former (unless it’s part of a general, proven stage-weighted expected value) and a lot of interest in the latter (what actually has been sold thus far).  They’ll often use terms like “forecast,” “commit,” “upside,” “worst case,” and “best case” without defining them (and questions about their definitions are too often met with blank stares or squishy replies).

In this post, I’ll discuss how to present these forecasts better.  If you follow this advice, your board will love you.  Well, they’ll love your communication at least.  (They’ll only love you if the numbers you’re presenting are great to boot.)

The Driving Principles
I think CEOs write these hastily dashed-off forecast emails because they forget some basics.  So always remember:

  • Your board members have day jobs.  They’re not necessarily going to remember your plan number, let alone what you did last year or last quarter.  So help them — provide this context.  (And do the percent math for them.)
  • Your board members care about deals, but only at a summary level and only after they’ve been given the numbers.  They typically care about deals for two reasons:  because they might be able to help if they know an executive at the target company and because they like to see if the deals that close are the same ones management said were “key deals” all quarter.
  • Communication with your board members will be more effective if you have standard definitions for “forecast” or “best case.”  I like to define “forecast” (at the VP of sales level) to be 90% confidence in beating and “best case” to mean 20% confidence in beating.  This means you get to miss your forecast once every 2.5 years and you should beat your best case once every 5 quarters.  See How to Train Your VP of Sales to Think About the Forecast for more.
  • After hearing a forecast the next question most board members will have is about pipeline coverage.  Ergo, why not answer that up front and provide them with the current quarterly pipeline and a to-go coverage ratio to get to plan.  To-go coverage = (current quarterly pipeline) / (new ARR bookings needed to get to plan).

How to Present a SaaS Company Quarterly Forecast
So, now that we’ve covered the logic behind this, let’s show you the spreadsheet that I’d embed or attach in a short email to the board about the current quarter forecast.

how to present forecast 2

Using “Win Themes” to Improve Your Sales Management and Increase Win Rates

At most sales review meetings what do you hear sales management asking the reps?  Questions like these:

  • What stage is this opportunity in?
  • What value do you have it at in the pipeline?
  • Is there upside to that value?
  • What forecast category is it in?
  • In what quarter will it close?
  • What competitors are in the deal?
  • What products will they be buying?
  • Do they have budget for the purchase?
  • How do we meet their primary requirements for a solution?
  • How have we demonstrated that we can meet those requirements?
  • What are the impacts of not solving those problems?
  • How did they attempt to solve those problems before?
  • Who is impacted by the consequences of those impacts?
  • Who is the primary decision maker?
  • What is the decision-making process?
  • Who else is involved in the decision and in what roles?
  • Who have you developed relationships with in the account?
  • What risk is there of a goal-post move?

And on and on.

Some of these questions are about systems and process.  Some are about forecasting.  Ideally, most are about the problem the customer is trying to solve, the impacts of not solving it, how they tried to solve it before, the ideal solution to the problem, and the benefits of solving it.  But in our collective hurry to be process-oriented, methodology-driven, systems-compliant, and solutions-oriented, all too often something critical gets lost:

Why are we going to win?

What?  Oh shoot.  Yep, forgot to ask that one.  And, of course, that’s the most important one.  As I sometimes need to remind sales managers, while the process is great, let’s not forget the purpose of the process is to win.

(I’ve even met a few sales managers so wedded to process and discipline that I’ve wondered if they’d rather crash while flying in perfect formation than win flying out of it.)

Process is great.  I love process.  But let’s not forget the point.  How can we do that?  With win themes — two to three simple, short, plain-English reasons why you are going to win the deal.  Here’s an example.  We are going to win because:

  • Joe the CFO saw first-hand how Adaptive didn’t scale in his last job and is committed to purchasing a system he can grow with.
  • Our partner, CFO Experts, has worked with Joe in the past, has a great relationship with him, and firmly believes that Host is the best fit with the requirements.

Build win themes into your systems and process.  Don’t add win themes to the bottom of your Salesforce opportunity screen; put them right up top so the first conversation about any deal — before you dive into the rabbit hole — is “why are we going to win?”   Two to three win themes should provide a proposed answer and a healthy platform for strategic discussion.

(And, as my friend Kate pointed out, in case it didn’t come up in the win theme conversation, don’t forget to ask “why might we lose?”)

The Three Types of Customer Success Manager

Since we’re now officially in 2019 planning season, I’ve been thinking about — among other things — our Customer Success model for next year and talking with friends in my network about that.  Since Customer Success is (sadly, perhaps) still a relatively new discipline in enterprise software companies, I’d say the whole field is evolving quickly, so it’s important to keep up with the changes.

In this post, I won’t approach things from a Customer Success Model perspective and how Customer Success interfaces to Sales (e.g., hunter/farmer, hunter-in-zoo, farmer-with-shotgun, account manager) [1].  Instead, I’m going to look bottom-up at the three basic types of customer success manager (CSM).  While they may share a common job title, CSMs are often cut from very different cloth.  Regardless of which model you implement, I believe you’ll be working with individuals who fall into one of three basic types to staff it.

  • Product-oriented
  • Process-oriented
  • Sales-oriented

In order to characterize the three types clearly and concretely, I’m going to use a template — first, I’ll show how each type introduces themselves to a customer, then I’ll present fragments of typical conversations they like to have with customers.

Note here that I’m talking about people, not roles.  In defining Customer Success Models you map people to roles and roles to duties [3].  In this post I’m really writing about the nature of the CSMs themselves because — all other complexity aside — I think the people pretty naturally drift to one of three types.

The art of setting up the right Customer Success Model is to clearly map out the sales and CSM roles (who does what), define the appropriate frequencies (how often do they do it), and then put the right people in the right roles — both to maximize job satisfaction as well as performance [4] [5].

The Product-Oriented CSM
Introduction: “Hi, I’m Jane, and my job is to ensure you get best use of our products. I’ll be here to keep an eye on your implementation process and to answer any technical questions that go beyond normal technical support. I’ll also perform periodic, proactive ‘health checks’ to ensure that you are using the system properly and making best use of new features.  I’m an expert in our products and previously worked at a consulting shop helping people implement it.  I’m here if you need me.”

Conversations they like to have:

  • “How’s that report working that I helped you build?”
  • “Yes, there are two ways of solving that problem in the product, let me help you pick the right one.”
  • “So you’re having some issues with performance, let me get in a take a look.”

The Process-Oriented CSM
Introduction: “Hi, I’m Joe, and my job is to make sure you are happy with our service and renewing your contract every year.  I’ll drive the renewal process (which, you should note, starts about 4-6 months before the subscription end date), monitor your adoption of the service, ask you to complete our ongoing customer satisfaction surveys, inform you about local user community events, and proactively call you about once a month to check-in.  Should we hit a rough patch, I’ll also serve as your escalation manager and pull together the right resources across the company to get you successfully through it.  I’m a very organized person — I was a project manager in my prior job — and I can manage 10,000 things at once, so don’t hesitate to call — I’m here if you need me.”

Conversations they like to have:

  • “Have you guys budgeted for next year’s renewal — and by the way don’t forget to leave room for the annual price increase?”
  • “I see you hired a new CFO, do you think that’s going to have an impact on our renewal process and can we setup a time to meet her?”
  • “We’re having a training class on new features in the November release and wanted to make sure you knew about it.”
  • “You’ve got two tickets stuck in technical support?  Let me swing over there and find out what’s going on.”

The Sales-Oriented CSM
Introduction: “Hi, I’m Kelly, and my job is to make sure your company gets maximum benefit from, and makes maximum use of, our software.  I’ll be managing your account from here forward, taking care of the renewal, and working to find other areas of your company that can benefit from our solutions [6].  Of course, I know you won’t be expanding usage if you’re not successful, so a big part of my job is to keep you happy as well — towards that end I’ll be keeping an eye on your implementation and your ongoing satisfaction surveys, and setting up periodic health checks with our ace technical team.  For routine technical or services questions, you should call those departments, but if you find yourself getting stuck do not hesitate to call me.  And, well, not to get ahead of myself, but I was wondering if you could introduce me to the CFO of the XYZ division, because I’d love to see if we could get in there and help them experience the same benefits that you’re going to be getting.  In my prior job, I worked as as sales development rep (SDR) and was promoted into this position 2 years ago.’

Conversations they like to have:

  • “Do you see any reason why you wouldn’t be renewing the subscription in February?”
  • “I’d love to come in next week and demonstrate our new Modeling product; I think it could help you with the inventory problem your CFO told me about.”
  • “I see you hired a new finance VP; can the three of us get together next week to discuss her goals for the team and our history working with you as a supplier?

Conclusion
I’ve exaggerated the types to make them clear.  What kind of CSM are you?  What other types have you seen? I’d love to hear.

In the end, it’s all about getting the right Sales and Customer Success Models working side by side, with the duties clearly mapped, and with the right people in the right roles.  I think the best way to do that is a mix of top-down planning and bottom-up assessment.  How do we want to break up these duties?  And who do we have on our team.

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Notes

[1] The way to define your Customer Success model is to define which duties (e.g., adoption, upsell, renewal) are mapped to which Customer Success and Sales roles in your company.  I won’t dive into Customer Success models in this post (because I can think of 3-5 pretty quickly) and each of those models will have a different duty mapping; so the post would get long fast.  Instead, I’m focusing on people because in many ways it’s simpler — I think CSMs come with different, built-in orientations and its important that you put the right CSM into the right role.

[2] I *love* characterizing jobs in this way.  It’s so much more concrete than long job descriptions or formal mission statements.  Think:  if a customer asks you what your job is, what do you say?

[3] As well as map duties to frequencies — e.g., a tier-one CSM may perform monthly outreach calls and setup quarterly health checks, whereas a tier-three CSM may perform quarterly outreach calls and setup annual health checks.

[4] You can make a product-oriented CSM responsible for renewals, but they probably won’t like it.  You could even make them responsible for upsell — but you won’t get much.

[5] To keep things simple here, I’m omitting the Customer Success Architect (CSA) role from the discussion.  Many companies, particularly as they grow, break product-oriented CSMs out of the CSM team, and move them into more of an advanced technical support and consulting role (CSA).  While I think this is generally a good idea, once broken out, they are no longer technically CSMs and out of scope for this post.

[6] One of my favorite quotes from a sales VP I know:  “I always put ‘sales’ on my business card — and not account executive or such — because I don’t want anyone to be surprised when I ask for money.”  This introduction preserves that spirit.