Customer Success Management (CSM) is crucial in SaaS and service-based industries, but the question of how many CSMs a company needs is often complex, depending on business objectives, product maturity, and customer requirements. In this video titled The Definitive Guide to How Many CSMs You Need, experts Jeff Kushmerek, Kristine Vallila, Kate Mazzini, and Renee Murphy shared insights on determining optimal CSM ratios, the evolving role of CSMs, and strategies for segmentation and headcount.

Understanding CSM Ratios and Headcount Distribution

One of the core themes discussed is the balance between the number of CSMs and the number of customer accounts they manage. Typically, CSM ratios depend on several factors:

• Account Size and Value: A single CSM might manage fewer accounts if those accounts represent high-value, complex relationships. For example, in enterprise-level accounts, it’s common to have a 1:10 CSM-to-customer ratio.

• Digital Touch Models for Scaling: In contrast, lower-value accounts might be better suited for a high-touch digital model, allowing a single CSM to manage hundreds or even thousands of customers through automated touchpoints.

• Product Complexity and Maturity: If the product is mature and streamlined, fewer CSMs may be needed, especially if customers require minimal support. For newer products or those requiring significant implementation assistance, a higher CSM ratio may be essential to manage each customer’s journey effectively.

CSM Role Evolution: From Generalists to Specialists

As companies grow, the demands on CSMs expand, and specialization becomes crucial. Many CSMs start as generalists handling onboarding, support, and account management. However, with increasing complexity, the need for specialists in technical support, implementation, and customer value realization grows.

"When are we asking too much from our CSMs?" is a frequently asked question. The answer often lies in defining each CSM's primary objectives based on the customer journey phase and tailoring roles accordingly.

How to Calculate the Number of CSMs

Determining the optimal number of CSMs is not a one-size-fits-all formula. However, benchmarks can be helpful. A common starting point is the $2 million annual recurring revenue (ARR) per CSM rule, which works well for high-ARR enterprise accounts. For mid-market and SMB segments, customer needs, churn rates, and service level expectations should all factor into the equation.

For instance:

• High-touch accounts (like enterprise) typically maintain a 1:10 to 1:20 CSM-to-customer ratio.

• Mid-market and digital-first customers can benefit from lower-touch, automated engagement models, allowing one CSM to oversee up to 100 accounts.

Strategies for Effective Segmentation

Segmentation is essential to distribute CSMs effectively:

• Enterprise customers generally require personalized engagement with dedicated CSMs.

• SMB clients, on the other hand, often benefit from digital-first interactions where a single CSM may support many accounts through standardized touchpoints.

In cases where CSMs manage both digital and human touchpoints, time management becomes critical. It’s essential for CSMs to prioritize high-impact activities and leverage technology to automate routine interactions.

Best Practices in Customer Success Scaling

As discussed in the video, companies that invest in a robust digital model and segment their customer base by ARR or usage patterns often achieve optimal efficiency. This not only helps to scale but also ensures that each customer receives the right level of support based on their account’s value and needs.

By focusing on these principles and tailoring them to specific business goals, companies can create a scalable customer success model that balances CSM workload, customer satisfaction, and growth objectives.

Want to dive deeper? Watch the full discussion on YouTube and join us at Infinite Renewals for more insights on Customer Success and strategies for scaling effectively.