{"id":2312,"date":"2024-09-11T10:00:00","date_gmt":"2024-09-11T10:00:00","guid":{"rendered":"http:\/\/138.197.200.24\/resources\/blog\/how-much-should-saas-providers-spend-on-customer-success\/"},"modified":"2026-07-31T07:06:09","modified_gmt":"2026-07-31T07:06:09","slug":"how-much-should-saas-providers-spend-on-customer-success","status":"publish","type":"blog","link":"https:\/\/www.smartkarrot.com\/resources\/blog\/how-much-should-saas-providers-spend-on-customer-success\/","title":{"rendered":"How Much Should SaaS Providers Spend on Customer Success"},"content":{"rendered":"
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Increasingly, businesses are using customer success initiatives to ensure customer satisfaction, goal attainment, and growth. The benefits of customer success for SaaS companies, in particular, are clear: when companies increase the focus on delivering value to customers, it\u2019s easier to retain subscribers. A well-managed customer success program can reduce churn and add new customers based on the demonstrable results of a SaaS solution<\/a>.<\/p>\n

Businesses know that customer success pays off, but determining how much they should invest in customer success management can be tricky. Customer success undoubtedly delivers results for SaaS companies, but it can also be challenging to implement at scale, which can make the cost of customer success prohibitive.<\/p>\n

The value that customer success brings to a SaaS company<\/h3>\n

The first step in determining how much should be spent on customer success, it\u2019s helpful to understand the value that customer success can deliver. A customer success manager (CSM) orchestrates post-sale customer satisfaction with a focus on enabling optimal use of a SaaS product, resulting in measurable and repeatable wins for the customer. Customer success management is a complex process that requires obtaining detailed insights into customer needs, monitoring use after subscription, and circling back often to ensure that a SaaS solution continues to deliver value as a customer\u2019s needs evolve.<\/p>\n

Customer success
\nmanagement cost<\/h3>\n

When properly executed,
\na customer success program is an indispensable tool for operations. But, like
\nany business activity, customer success can be expensive to manage. If you
\nsearch the internet for appropriate customer success management budgets, you
\nwill find many different answers. Some experts say customer success is so
\ncrucial it warrants a cost of up to 20% of annual revenue. This may be true, or
\nyour business may require less or more of an investment. No one answer applies
\nto all SaaS providers.<\/p>\n

To operate a customer success program, businesses need to employ one or more individuals to maintain relationships and track and monitor usage and value derived from a SaaS product. A customer success team is unique in that its cost<\/a> can be considered a cost of goods sold or a component of sales and marketing because customer success activities straddle operations, sales, and other departments. The goal of customer success is to maintain subscribers, which is an extension of the sales process, but successful customers become brand advocates and built-in marketers. SaaS company growth can threaten customer success if systems are not put into place that enables continued customer success after growth.<\/p>\n

CSM personnel expenses<\/h3>\n

Customer success is a specialized field, requiring a high level of skill and experience in managing customer needs, optimizing<\/a> product usage, and analyzing customer behavior. According to Payscale<\/a> and Glassdoor<\/a>, the average annual base salary for a CSM is around $65,000. Since customer success is often closely tied to revenues from renewals and other performance-based metrics, the personnel expense for customer success can be an additional $10,000 to $20,000 or more. This also doesn\u2019t account for the cost of employee benefits and overhead associated with additional employees.<\/p>\n

As a result, a strategy of adding CSMs to handle growth can be an expensive one. Because of this expense, many companies fail to grow their customer success processes and end up stunting their growth.<\/p>\n

Executing customer
\nsuccess at scale<\/h3>\n

Of course, efficiency is
\nan ever-present goal, so businesses should seek to reap the benefits of
\ncustomer success at the least cost. In today\u2019s business environment, achieving
\nan efficient customer success management program means making customer success
\nscalable.<\/p>\n

Instead of simply hiring
\nmore CSMs, SaaS providers should leverage technology to achieve scale
\nefficiently. A platform for operationalizing customer success can help automate
\ncustomer success activities. Scalability is a key benefit of using a customer
\nsuccess platform, as everything from adoption to goal attainment can be
\nmeasured and optimized without the need for large personnel expenditures.<\/p>\n

The SmartKarrot platform helps CSMs scale operations and bring efficiency to customer success initiatives. SmartKarrot provides end-to-end features to fuel efficient and scalable customer success, such as:<\/p>\n