Economic subjects | Finance » Customer Success Salary Survey and State of the Profession Report

Source: http://www.doksinet 2018 - Customer Success Salary Survey & State of the Profession Report Source: http://www.doksinet Executive Summary Over the last few years, Customer Success has gone from a novel idea to one of the most promising roles in organizations. Totango has been chronicling this growth by surveying Customer Success practitioners since the beginning. Our goal has been to help the Customer Success community understand trends and how to evolve their own teams. In this 2018 report, based on surveys of hundreds of Customer Success professionals, we provide benchmarks that you can use to gauge your team against others in the industry. Some of the most significant findings include: • Customer Success teams are growing and increasingly moving into larger enterprises • As the Customer Success profession expands, salaries remain high • Customer Success compensation is increasingly tied to business outcomes • Purpose-built Customer Success technology

solutions see growing adoption TOTANGO | 2018 - CUSTOMER SUCCESS SALARY SURVEY & STATE OF THE PROFESSION REPORT 2 Source: http://www.doksinet Customer Success Continues to Gain Traction The success of your business is inherently intertwined with that of your customers. If customers flourish by using your product or service, they’ll continue to use it and your business will thrive. Thus, your ability to help customers prosper will literally make or break your business. The Customer Success role is all about ensuring that companies proactively work to achieve their customer success goals. The idea is clearly catching on. LinkedIn shows that Customer Success Manager is the number three most promising job in 2018. But while forward thinking organizations may have always understood that their growth depends on their customers’ prosperity, Customer Success is a new profession. The industry is hungry for data to benchmark overall Customer Success efforts and allow organizations

to compare their own efforts to others. The Totango Customer Success Survey Since 2013, Totango has been surveying Customer Success organizations to provide valuable insights into trends in the Customer Success profession to customers and the Customer Success community at large. These surveys established industry benchmarks for Customer Success professionals regarding compensation trends, the growth and maturity of the role, and the unique challenges and goals of our industry. TOTANGO | 2018 - CUSTOMER SUCCESS SALARY SURVEY & STATE OF THE PROFESSION REPORT 3 Source: http://www.doksinet Customer Success Continues to Gain Traction Survey Participants In 2018, we surveyed thousands of Customer Success professionals, and received 524 responses. The number of respondents includes representatives from all types of companies, with 62% from the United States and 38% from abroad. Of the participants in the United States, 30.6% came from California and 128% were from New York Meet the

Survey Participants 38% 13% International New York 62% United States 31% 56% Other States California TOTANGO | 2018 - CUSTOMER SUCCESS SALARY SURVEY & STATE OF THE PROFESSION REPORT 4 Source: http://www.doksinet Summary of Key Findings We asked respondents questions about their perceptions of the state of the industry and about their salary and compensation structures. The following summarizes our findings: State of the Industry • Customer Success is gaining traction in large enterprises. More than 10% of survey respondents came from large enterprises, compared to just a handful in 2016. • Customer Success teams are maturing. The number of teams in operation for less than a year fell by roughly 40% between 2014 and 2018. Conversely, teams in operation for more than three years increased from 25% in 2016 to 42% in 2018. At the same time, we see more types of organizations adopting Customer Success--from startups to B2C to ITSM--so expect the field to continue

to grow significantly. • Customer Success teams are getting larger and their growth shows no signs of slowing down: 83% of the CS team saw growth in team size within the last year; 64% of survey respondents said that they have a team larger than five. • Customer Success is strategic, but reporting structures remain in flux. With roughly 50% of Customer Success teams reporting to the C-suite, it’s clear that Customer Success is strategic. Still, reporting structures remain in flux as Customer Success means different things to different companies. These realities are seen in significant differences in year-to-year survey results regarding reporting structures. • Customer Success Priorities Remains the Same Reducing churn, onboarding, and product adoption have remained the trifecta of top priorities since 2015. But minimizing churn is by far the biggest concern (held by more than 80% of respondents in each of the past three surveys). • Customer Success is increasingly

responsible for revenue: 52% of respondents are charged with meeting revenue targets. • Customer Success technology platforms are gaining momentum. Customer Success teams increasingly acknowledge the need to trade general purpose, siloed business tools for purpose-built platforms that enable them proactively ensure customer success. Usage of Customer Success platforms rose from 25% in 2015 to 43% in 2018 TOTANGO | 2018 - CUSTOMER SUCCESS SALARY SURVEY & STATE OF THE PROFESSION REPORT 5 Source: http://www.doksinet Customer Success Salaries Bonuses are a critical component of Customer Success compensation. Companies are shifting more revenue responsibility to Customer Successand that is reflected in compensation structure. Nearly 70% of customer success professionals receive some type of bonus on top of their base salaries in 2018, up from 56% in 2016. As Customer Success expands beyond California and New York, overall average salaries are slipping. For every job title, we

saw an increase in the number of people with salaries at the lower ends of the spectrum and a decrease in those making the highest salary levels. We attribute this decline to overall growth, which means less experienced people are joining the Customer Success ranks as well as to an increase in Customer Success professionals located outside of California and New York, where salaries remain high. TOTANGO | 2018 - CUSTOMER SUCCESS SALARY SURVEY & STATE OF THE PROFESSION REPORT 6 Source: http://www.doksinet Detail of Survey Results State of the Industry Overall, our survey found that Customer Success teams continue to grow and mature, even as the top priority of reducing churn remains the same. But as a young profession, some things continue to evolve. Reporting structures have been in a state of flux over the past five years as companies adjust their priorities to their ever-changing goals and requirements. At the same time, organizations increasingly acknowledge the need for

specialized technology to simplify and improve Customer Success operations. Customer Success Gains Traction in Large Enterprises The Customer Success profession is gaining traction across organization types. While the profession originated in Software as a Service (SaaS) companies, today more than 10% of survey respondents come from large enterprises, compared to just a handful in 2016. At the same time, startups also understand the need to consider customer success initiatives as they build out their organization and establish their culture. We’re also seeing Customer Success expand into ITSM, B2C and many other types of organizations. As a result, we expect to see Customer Success adoption increase dramatically in the coming years. Customer Success Teams are Maturing The number of success teams in operation for less than a year has fallen by more than 40% over the past two years. In 2014-2016, 22% of CS teams had been in operation for less than a year. By 2018, that number had

fallen to just 134% The number of teams in operation for more than 3 years increased, from 25% in 2016 to 42 % in 2018. Customer Success Maturity 13.4% Less than 1 year 42% More than 1 Year but less than 3 Not sure 0 months, just starting out 42% More than 3 years TOTANGO | 2018 - CUSTOMER SUCCESS SALARY SURVEY & STATE OF THE PROFESSION REPORT 7 Source: http://www.doksinet Customer Success Teams Grow Larger and Show No Signs of Slowing Down Growth in the CS profession shows no sign of abating. In each of the last three surveys, 80% or more teams saw growth in team size. Today, more than 64% have more than five members on their Customer Success team compared with 59% in 2016. As more companies recognize the importance of Customer Success and the profession becomes increasingly mainstream, we can expect this growth rate to continue. At the same time, the distribution of the team roles is evolving. In 2014, 92% of CS professionals had the title of either CS Vice President,

Director or Manager. By 2018, these three roles made up 80.3 % of CS titles This result mirrors our own observations regarding our customers’ CS departments. As companies scale, we see increasing specialization, with CS teams expanding to include field engineers, account managers, onboarding roles, renewals experts, and so on. Growth 83% of CS teams saw growth in team size within the last year. 16% 25% 17% 22% 26-50% growth in team size No growth 100%+ growth in team size 51-100% growth in team size 20% 0-25% growth in team size TOTANGO | 2018 - CUSTOMER SUCCESS SALARY SURVEY & STATE OF THE PROFESSION REPORT 8 Source: http://www.doksinet Titles and Team Size Distribution of titles didn’t change much from 2016. 64% have more than 5 people on the team, compared to 59% in 2016. 11.8% Account Manager Customer Success Engineer Chief Customer Officer/ Vp of Customer Success 13.4% 48.7% Customer Success Manager 19.8% Other Director of Customer Success 16%

25+ 36% 48% 6–25 1–5 TOTANGO | 2018 - CUSTOMER SUCCESS SALARY SURVEY & STATE OF THE PROFESSION REPORT 9 Source: http://www.doksinet Customer Success is Strategic, but Reporting Structures Fluctuate When looked at from a macro level, reporting structures tell us that Customer Success is very strategic to companies. Roughly 50% of teams report to the C-Suite--either the CEO, COO, CRO or CCO. However, overall reporting structures differ significantly from one company to the next. In some companies, Customer Success is its own department entirely reporting directly to the CEO. In others it may be part of sales In still others, Customer Success also provides support and professional services. The reason for these differences in reporting structures is that Customer Success means different things to every company. For example, the Customer Success team at a large company may be responsible for all upsells and expansion while a startup might concentrate solely on renewing

contracts. Moreover, the role of Customer Success can change over a company’s lifecycle. In keeping with these first-hand observations of our customers in the field, our survey results find that the reporting structure has remained unstable since we began performing these surveys. This reflects the myriad of definitions of what an ideal reporting structure should look like. Organizations continue to adjust their model to find what works best for them. Anecdotally, we also see that more organizations are rolling Customer Support and Professional Services into Customer Success teams. Because all of these areas are so critical for supporting customers, putting them into one larger team facilitates coordination. Where Does CS Reside? 33% 16% 14% 14% 3% CEO COO Sales Service/ Support Marketing TOTANGO | 2018 - CUSTOMER SUCCESS SALARY SURVEY & STATE OF THE PROFESSION REPORT 2% CCO 3% VP of CS 2% CRO 10 Source: http://www.doksinet Priorities Stay Stable It is generally

assumed that the main objective for Customer Success is to reduce churn, which is defined as when a customer cancels their account, resigns from their subscription or chooses a subscription plan of a lower value. Our results show that churn reduction remains by far the primary driver for customer success to this day: 79% of participants in our survey rated churn reduction as their Number 1 priority in 2014, and that same number say churn reduction is their top goal to today. Onboarding and product adoption have also retained their place in the trifecta of top priorities: both are cited as a top concern by more than 60% of survey participants. However, in our interactions with customers, we’ve seen that while onboarding, product adoption, customer support and customer advocacy--the building blocks of any CS program-are critical for all, the degree of importance for each of these varies dramatically according to the company’s business model, degree of maturity, available resources

and so on. Highest Priorities of Customer Success Teams Customer Success Teams have the same set of priorities 79% 65% 63% 47% 43% 33% Churn Reduction Product Adoption Onboarding Customer Advocacy Customer Support TOTANGO | 2018 - CUSTOMER SUCCESS SALARY SURVEY & STATE OF THE PROFESSION REPORT Upsells 11 Source: http://www.doksinet Technology Used by Customer Success Teams is Becoming More Sophisticated Our survey results indicate that Customer Success teams are beginning to recognize the value of having specialized technology solutions, rather than general CRM solutions or email. While CRM solutions continue to be the top technology used by customer success teams, their usage over the part four years has drifted down from 84% in 2014 to 77% in 2018. At the same time, usage of Customer Success platforms has risen from 25% in 2015 to 43% in 2018. Customer Success platforms are designed specifically to help businesses proactively ensure customer success. These software

applications collect and leverage as much data as possible to help Customer Success professionals understand the customer experience so they can pinpoint and address problems and opportunities. The use of Help desk support tools also increased from 45% in 2014 to 65 % in 2018. In many cases, this represents the fact that smaller companies are adding Customer Success to their mix. Customer Success teams in these smaller organizations often have dual responsibility for proactive customer success and reactive customer support. As companies scale, they typically separate the Customer Support and Customer Success functions. Technology Used by Customer Success Team Use of a Customer Success Platform increased from 36% in 2016 to 43% this year 77% CRM Help Desk Support Tools 65% 59% Microsoft Excel 43% Customer Success Platform 33% Survey Tools 34% In-House Built Tools BI Tools 22% TOTANGO | 2018 - CUSTOMER SUCCESS SALARY SURVEY & STATE OF THE PROFESSION REPORT 12 Source:

http://www.doksinet Salary Survey Results In our salary survey, we learned that CS departments are increasingly focused on generating revenuewith compensation structures supporting that role by offering commissions. Overall salaries have declined slightly as newer workers are added to support growth and Customer Success moves into the mainstreamand into areas with lower salaries outside the largest metropolises. Compensation Structure Companies are continuing to shift more revenue responsibility to Customer Successand compensating professionals directly based on these efforts. A significant majority (677%) of Customer Success Managers received some type of bonus on top of their base salary in 2018. Of those receiving bonuses, 183% received commission on renewal and another 183 % received commission on upsell. In contrast, in 2016, 56% of Customer Success Managers received bonuses or commissions. Compensation Structure 67.7% have a bonus on top of base salary 18.3% have commission on

renewal/upsell <5% have options TOTANGO | 2018 - CUSTOMER SUCCESS SALARY SURVEY & STATE OF THE PROFESSION REPORT 13 Source: http://www.doksinet Customer Success Manager Compensation 2018 Average $78,000 29% 18% 27% 17% 6% 2% $0-50K $50K-75K $75K-$100K $100K-$125K $125K-$150K $150K-$175K Customer Success Manager continues to be one of the hottest jobs, ranking #3 in LinkedIn’s most promising jobs in 2018. (Source: https://bloglinkedincom/2018/january/11/linkedindata-reveals-the-most-promising-jobs-and-in-demand-skills-2018) However, between 2016 and 2018, we’ve seen more Customer Success Managers make $100,00 and less annually and fewer make more than $100,000 annually. We attribute these overall salary declines to the expansion of the Customer Success profession into secondary markets (outside of New York and California) that tend to pay less for salaries overall, and higher growth levels of the role, which bring more inexperienced Customer Success Managers into

the field. Nonetheless, salaries overall remain relatively high: 58% of Customer Success Managers make more than $75,000 per year and 31 % make more than $100,000 per year. The overall 2018 average salary for Customer Success Managers is around $78,000 with some geographic variations. Most notably, Customer Success Managers in California averaged $96,000 while those in New York averaged $88,000. TOTANGO | 2018 - CUSTOMER SUCCESS SALARY SURVEY & STATE OF THE PROFESSION REPORT 14 Source: http://www.doksinet Director of Customer Success Compensation 2018 Average $113,000 17% 18% 17% 14% 13% 11% $0-50K 10% $50K-75K $75K-$100K $100K-$125K $125K-$150K $150K-$175K $175K+ An overall salary decrease is also seen at the director level. The number of Directors of Customer Success making $0-$50,000 per year increased from 1% in 2016 to 11% in 2018. Those making $50-75,000 rose from 6% to 10% over the same period; and those making $75100,000 rose to 17% from 13% over that period.

At the same time, the percentage of Customer Success Directors making $125-175,000 declined from 20% to 17% between 2016 and 1018; and those making $175+ fell from 20% to 13 % over the same period. A growing workforce with slightly less experienced professionals moving into Customer Success roles, as well as increasing geographic distribution into areas offering lower salaries can account for the differences here as well. Still, salaries remain high: 62% of directors make more than $100,000 per year. The average salary for Directors of Customer Success is $113,000 while in California the average is a significantly higher $147,500 and in New York it’s $134,000. TOTANGO | 2018 - CUSTOMER SUCCESS SALARY SURVEY & STATE OF THE PROFESSION REPORT 15 Source: http://www.doksinet VP of Customer Success Compensation 2018 Average $150,000 3% $0-50K 48% 3% $50K-75K 3% 11% 15% $75K-$100K $100K-$125K $125K-$150K 16% $150K-$175K $175K+ The number of CS Vice Presidents making

$175,000 or more declined from 64% in 2016 to 48% in 2018. Still, salaries remain high: the overall average is $150,000, 48% of Customer Success VPs making more than $175,000. In both California and New York, the average salary for Customer Success VPs is roughly $164,000. TOTANGO | 2018 - CUSTOMER SUCCESS SALARY SURVEY & STATE OF THE PROFESSION REPORT 16 Source: http://www.doksinet Conclusion As we can see from the survey results, Customer Success is, well, a success. Customer Success teams are not only growing, they’re moving into large enterprises--and organizations of all types. As the profession expands, salaries remain high while compensation is increasingly tied to business outcomes. And things are only looking up As more teams adopt purpose-built Customer Success Platforms, they increasingly have the data and automated processes at their fingertips that will better enable them to continue to drive their successand that of their customers. TOTANGO | 2018 - CUSTOMER

SUCCESS SALARY SURVEY & STATE OF THE PROFESSION REPORT 17 Source: http://www.doksinet Totango is a leading enterprise Customer Success solution that enables companies to align around their customers to increase loyalty and customer lifetime value. Our solution connects all customer information so companies can proactively and intelligently engage with their customers to drive adoption, retention, expansion and referrals. Totango enables companies to get results quickly and accelerate the impact of Customer Success. Learn more online: totango.com Request a demo: totango.com/request-demo/ Email us: hi@totango.com Speak to us: 1-800-634-1990