Startup CXO

Chapter 93Five Eternal Questions

There are a handful of questions that I see repeated in customer service newsletters and forums for CCOs and VPs of Customer Success. I've dealt with these questions my entire career. I call them the “eternal questions” and I can tell you right now that the answer to every question is, “it depends.” If you are a Chief Customer Officer, you will need to be prepared to address these issues, because they will come up.

1 How Should I Structure Variable Compensation for the Customer Success Team?

It depends.

What percentage of an employee's total compensation should be fixed (base salary) and how much should be variable, and what is the variable based on?

My short answer is, all things being equal, I prefer more in the base salary and less variable. But everything is not always equal and in many cases—where upsell is a major part of the CSM role—having more variable compensation might make sense.

My general philosophy is to only use variable compensation if you are tying success directly to something that is in the employee's control, and where the additional money is a motivator to do something that otherwise they won't be motivated for. If there's any sense of unfairness in variable compensation—i.e., “the customer left because of the product, not because of anything I did”—then you'll spend a lot of your time navigating these conversations. Instead, I prefer to clearly focus on metrics, and hold people accountable to those metrics. It's a performance ...