Is your CS team growing as fast as your sales team?
If not, are you sure your have this right?
— Jason ✨2022 SaaStr Annual Sep 13-15 ✨ Lemkin (@jasonlk) November 29, 2021
What should be growing faster — your sales team or your customer successteam? The answer can vary, but if you’re well enough funded, it may well make sense to grow the success team even faster than sales.
Let’s look at some raw math:
- Let’s say you want to grow from $10m ARR to $20m ARR next year, just to keep it simple.
- To add $10m in new ARR with a $500k average attainment, you need 20 sales reps.
- And to retain and grow than $20m ARR … you need how many? Well, if you push it to $1m ARR per CSM … that’s 20 CSMs, too.
- So in this case, you’d want the same number of CSMs and AEs — 20.
(in the example above, I’m simplifying and leaving out managers, ops, etc. — but that won’t lead to a different conclusion)
But what I often see instead is sales reps hired in advance, but CS hired in arrears. I.e., the VP of Sales knows they have to hire all the reps they need now to hit the plan 12 months out, but CS just doesn’t get budget or encouragement to do the same.
If you think about it, it’s almost backwards. If your NRR is 100%+, then your customers are your growth engine.
The last thing you want is those hard-earned customers not to get the help they deserve. At least, do the planning exercise holistically. If you can afford it, go with $1m ARR per CSM coverage. Invest in happiness. And maybe hire them a few months ahead of plan, so they have time to scale.
And more often than not, that may lead to a surprising conclusion. You may end up with as many or more CSMs than AEs.
And that’s often just fine. Even great.