How are CSM measured?

5 min read

When it comes to measuring customer success manager (CSM) performance, there are a few approaches companies can take. And while certain factors and benchmarks will vary from one company to the next—based on their industry, mission and vision, and the promises they make to their customers—that’s not to say there aren’t some widely-applicable best practices. That’s what we hope to uncover for you by the time you finish reading this post.

In this blog, we want to introduce you to some of those best practices, so you can better understand how to measure a customer success team’s (and manager’s) performance. In this blog, we’re going to explore the following areas:

  • Understanding what makes a CSM successful.

  • Measuring CSM performance through customer success KPIs and outcomes.

  • Conducting CSM performance reviews.

What Makes a CSM Successful?

While there’s plenty of room for variation,there are a few key competencies that generally describe successful CSMs.

  • They’re flexible, adaptable, and resilient.

  • They’re adept at communicating with various stakeholders, team members, and collaborators.

  • They understand how to effectively cultivate and manage productive relationships.

  • They have previous experience/success.

  • They’re empathetic and emotionally-intelligent.

Beyond these characteristics, there are two additional opportunities to really quantify CSM performance—through their team’s numbers, and their own progress and development as a manager. Next, let’s take a closer look at each of these methods, and how adding these perspectives to your understanding of customer success works to round out a three-dimensional view of everything CS.

Measuring CSM Performance Through Customer Success Metrics

A great starting point for evaluating a CSM’s performance is the evaluation of their team’s performance and outcomes. When the CS team is consistently efficient and effective in handling customer issues, it’s usually indicative of an effective CSM.

Common SaaS customer success KPIs include the following:

  • Customer Satisfaction (CSAT): It doesn’t get much simpler than this metric, which measures how well a product or service is meeting customers’ expectations.

  • Net Promoter Score (NPS): By asking customers one question—”On a 0 to 10 scale, how likely are you to recommend [X] to a friend or colleague?”—CS teams gain invaluable insight into how loyal a customer is likely to be.

  • Customer Churn Rate and Customer Retention Rate (CRR): An effective CS team is the motor that helps companies build lucrative, long-term customer relationships and reduce costly customer churn. Learn more about how Planhat can prevent churn.

  • Net Retention Rate (NRR): A crucial metric for subscription-based businesses, NRR measures how well the organization retains and grows its customer base. Learn more about this essential performance indicator and how Planhat’s customer platform can help companies actively drive NRR initiatives.

  • Customer Retention Cost (CRC): How much, on average, does it cost to hold on to a valuable customer? Calculating CRC gives CSMs insight into the ROI of their teams’ initiatives as they relate to attracting and retaining customers.

  • Customer Lifetime Value (CLV): How much can the company expect to earn over the lifetime of individual customer accounts? The key variables in quantifying CLV are the average length of customer relationships and the average annual revenue expected per customer.

  • Monthly Recurring Revenue (MRR): Especially important for SaaS companies that operate with a subscription model, MRR measures how much a company’s customer base and/or spending have grown over the course of their relationship.

  • First Contact Resolution (FCR): FCR essentially calculates the percentage of customer contacts that are successfully resolved—meaning the CS team has fully understood their situation and provides a complete resolution (the first time, no callback or other follow-up needed).

What Goes Into Customer Success Manager Performance Review?

As mentioned earlier, measuring a CSM’s effectiveness will largely center around their team’s performance. The specific elements of a performance review will vary from one company or industry to another, but some general areas a CSM’s performance review should touch on include:

  • Team dynamic, management and coaching methods, and effectiveness, etc.

  • General discussion of the CSM’s perceived strengths and weaknesses.

  • Discussion of areas in which the CSM could benefit from coaching or mentoring, to grow their leadership skills.

How Planhat Empowers CSMs to Unleash Team Success

Planhat’s modern customer platform empowers CSMs with a solid data foundation and range of analytical tools to help them better understand, manage, and optimize CS performance. The must-have features for forward-thinking CSMs include:

  • Intelligent Playbooks for developing effective, repeatable processes for CS teams to optimize and maintain their success.

Are you ready to unleash unlimited success? In this brief blog, we’ve only just scratched the surface of our innovative capabilities…but hopefully we’ve at least gotten your wheels turning a little bit. When you’re ready to learn more—or to schedule a demo—you can easily do just that at!

Planhat is a G2 Leader along the entire customer journey

In G2 Summer Report 2022 Planhat has been named a leader in five categories: Customer Data Platform, Client Onboarding Software, Customer Success Software, Client Portal and Customer Revenue Optimization.

Meet The Customer Success Manager of the year

Gurprem Sagoo, Planhat, has been awarded The Customer Success Manager of the year

What is the customer analytics process?

Behind every loyal and growing customer base is a solid analytics process, which has 6 key steps.

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