The ratio every customer success management lead should know

July 24, 2015 Jodi Schechter

The ratio every customer success management lead should know

Customer success management hires—how many do you need?

When building a new Customer Success Management (CSM) team – or scaling your existing department – one of your challenges will be to determine the sweet spot between the number of clients you have and the number of CSMs you need.

This may not be as straightforward as it seems. SaaS customers are often classified into categories like “strategic” or “foundational”, requiring different levels of involvement and support; or tiered into levels of high touch and tech touch. And we all know that those first 90 days onboarding a new customer requires heavy CSM hand-holding that will abate once up and running.

So how best to calculate the magic number?

Jason Lemkin of SaaStr did the math and came up with what is now recognized as the most popular metric, the 2M:1 ratio.

2M = $2 million in Annual Recurring Revenue (ARR) or Annual Contract Value (ACV)

1 = One competent Customer Success practitioner who cares deeply about the customer

“In both rapid growth and early stage, the 2M:1 ratio seems to hold true”, confirms Paul Philp, CEO of Amity, but adds a note of caution: “Do not wait to hire your first Customer Success practitioner. Hire as early as you can afford to. If you’re scaling your CSM teams in arrears, adjust to 1M:1 until you catch up. Investing early in your customer success team will translate directly into your company’s success.”


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