1 year later: Reflections on building our very own CSM headcount calculator

Seth Dovev
September 8, 2022
min to read

1 year later: Reflections on building our very own CSM headcount calculator

Seth Dovev
September 8, 2022
min to read

The end of June ‘22 saw inflation reach an alarming 9.1% — its highest level since 1981. To make matters worse, global supply constraints stemming from the Russian invasion and war in Ukraine have driven some of the largest companies like Apple, Google, and Amazon begin to slow down their hiring.

This is why it’s even more important than ever to have a streamlined process and defined metrics to accurately plan for capacity. Capacity planning is a constant exercise that ebbs and flows with how your business and sales organization is performing. 

At Chili Piper, we created our very own CSM headcount calculator to accurately plan hiring. We even shared our calcluator template in a previous article (feel free to shamelessly copy it).

During that time, I’ve learned a lot. 

Here are some of my key takeaways:

Keep your data up-to-date 

Forecasts change. That’s why they’re called “forecasts” and not “absolute truths”.

When I first started using our headcount calculator, I planned on reviewing the calculator once a quarter — but I realized that quarterly was way too infrequent for the level of growth we were experiencing at Chili Piper. 

So I started updating our calculator with actual new logos once a month.

If you’re at a company with more predictable growth, quarterly might be fine for you! Or if you’re somewhere with even more unpredictable growth, you might want to update your calculator bi-weekly or even weekly. 

Do whatever it takes to keep YOUR data up-to-date. Because a sudden increase in net new business can drastically impact your team’s utilization and can lead to rapid burnout and poor customer experience. 

When you do identify issues, surface them to leadership as soon as possible. The sooner hiring plans can reflect actual new logos, the better.

Listen to what your data has to say 

Collecting data without taking action on it is a waste of time. You need to be prepared to understand and speak to what the data tells you — the good, the bad, and the ugly.

If the data says you need to adjust your book of business for each CSM, do it. 

If it tells you to make a change to meet customer expectations, do it.

A single new hire can have a ripple effect across the entire CS organization — not just how we service a set group but the entire framework across the journey. So you need to be prepared. 

Here are some of the areas I try to focus on when looking at the data: 

Scaling challenges 

When looking at your data, you need to be able to understand if there are particular touchpoints that are taking up the majority of your CSMs’ time. 

Because, as every CS leader knows, time = value.
Here are some questions I like to ask myself: 

  • What’s the biggest hurdle to reducing time to onboard or adoption?
  • Where are CSMs spending the most time with customers? 
  • Are there areas of our product that can offset capacity needs? 

Knowledge challenges 

If your CSMs are spending more time than expected with each customer, you might be able to solve it with better enablement. 

Ask yourself: 

  • Do we need to arm our CSMs with product training, so they can solve problems more quickly? 
  • Can we enable our customers to self-serve with more educational materials?

Scope challenges

If your CSMs are stretched thin, even when their assigned customer count is within reason, it’s possible that their spending time away from prescribed responsibilities. 

As a CS leader, you need to understand:

  • What are team members spending time on? Why are they spending time on that? 

Plan for the unexpected

Leading a department is not a straight line. Things will crop up that you don’t expect. 

As you’re planning, you need to think about how to scale as efficiently as possible so you can continue to meet your goal — even in the face of unexpected changes. 

Here are questions I always make I’m able to answer:

  • If we had to stop hiring (for whatever the reason), do we have a fallback plan? 
  • Can we find solutions to address capacity in-house with other teams or resources?
  • Can we find other tech to solve our issue vs. throwing more resources at the issue?
  • Could a specialized role help address capacity issues for a particular task or phase of the customer journey?

Make sure your customers have a seat at the table

It costs 5x more to attract new customers than it does to retain them. 

You need senior leadership in the decision-making room, speaking to and rationalizing capacity needs. 

Note the use of “needs” not “wants”. 

Your customer success department needs to scale with your customer count if you want to keep your customers happy. 

Basically… if you have 30,000 customers, you can’t support them with 24 people. 

At Chili Piper, we’ve maintained 90% gross logo retention for five quarters straight — partly because we prioritize matching customer success headcount with actual customers. 

That’s why it’s so essential for your C-Level executives to understand why your headcount calculator is an accurate predictor of future headcount needs.

Because whenever you need to adjust headcount, you’ll be able to point to a particular datapoint to confirm any need or adjustment.

Stay true to your mission

You need a clear mission that’s agreed on from the top down. And one that your team lives and breathes by. 

At Chili Piper, our Customer Success organization’s mission is to “Create and Retain Happy Active Users.”

Retention and Adoption are our major areas of focus. 

What’s next?

If you’re still trying to figure out how to set up your Customer Success headcount calculator, check out our article: How to accurately plan CSM headcount (+template). It includes a fancy headcount calculator template that you can copy and adjust for your own use! 

Here are some other resources that might be helpful for CS leaders: 

The end of June ‘22 saw inflation reach an alarming 9.1% — its highest level since 1981. To make matters worse, global supply constraints stemming from the Russian invasion and war in Ukraine have driven some of the largest companies like Apple, Google, and Amazon begin to slow down their hiring.

This is why it’s even more important than ever to have a streamlined process and defined metrics to accurately plan for capacity. Capacity planning is a constant exercise that ebbs and flows with how your business and sales organization is performing. 

At Chili Piper, we created our very own CSM headcount calculator to accurately plan hiring. We even shared our calcluator template in a previous article (feel free to shamelessly copy it).

During that time, I’ve learned a lot. 

Here are some of my key takeaways:

Keep your data up-to-date 

Forecasts change. That’s why they’re called “forecasts” and not “absolute truths”.

When I first started using our headcount calculator, I planned on reviewing the calculator once a quarter — but I realized that quarterly was way too infrequent for the level of growth we were experiencing at Chili Piper. 

So I started updating our calculator with actual new logos once a month.

If you’re at a company with more predictable growth, quarterly might be fine for you! Or if you’re somewhere with even more unpredictable growth, you might want to update your calculator bi-weekly or even weekly. 

Do whatever it takes to keep YOUR data up-to-date. Because a sudden increase in net new business can drastically impact your team’s utilization and can lead to rapid burnout and poor customer experience. 

When you do identify issues, surface them to leadership as soon as possible. The sooner hiring plans can reflect actual new logos, the better.

Listen to what your data has to say 

Collecting data without taking action on it is a waste of time. You need to be prepared to understand and speak to what the data tells you — the good, the bad, and the ugly.

If the data says you need to adjust your book of business for each CSM, do it. 

If it tells you to make a change to meet customer expectations, do it.

A single new hire can have a ripple effect across the entire CS organization — not just how we service a set group but the entire framework across the journey. So you need to be prepared. 

Here are some of the areas I try to focus on when looking at the data: 

Scaling challenges 

When looking at your data, you need to be able to understand if there are particular touchpoints that are taking up the majority of your CSMs’ time. 

Because, as every CS leader knows, time = value.
Here are some questions I like to ask myself: 

  • What’s the biggest hurdle to reducing time to onboard or adoption?
  • Where are CSMs spending the most time with customers? 
  • Are there areas of our product that can offset capacity needs? 

Knowledge challenges 

If your CSMs are spending more time than expected with each customer, you might be able to solve it with better enablement. 

Ask yourself: 

  • Do we need to arm our CSMs with product training, so they can solve problems more quickly? 
  • Can we enable our customers to self-serve with more educational materials?

Scope challenges

If your CSMs are stretched thin, even when their assigned customer count is within reason, it’s possible that their spending time away from prescribed responsibilities. 

As a CS leader, you need to understand:

  • What are team members spending time on? Why are they spending time on that? 

Plan for the unexpected

Leading a department is not a straight line. Things will crop up that you don’t expect. 

As you’re planning, you need to think about how to scale as efficiently as possible so you can continue to meet your goal — even in the face of unexpected changes. 

Here are questions I always make I’m able to answer:

  • If we had to stop hiring (for whatever the reason), do we have a fallback plan? 
  • Can we find solutions to address capacity in-house with other teams or resources?
  • Can we find other tech to solve our issue vs. throwing more resources at the issue?
  • Could a specialized role help address capacity issues for a particular task or phase of the customer journey?

Make sure your customers have a seat at the table

It costs 5x more to attract new customers than it does to retain them. 

You need senior leadership in the decision-making room, speaking to and rationalizing capacity needs. 

Note the use of “needs” not “wants”. 

Your customer success department needs to scale with your customer count if you want to keep your customers happy. 

Basically… if you have 30,000 customers, you can’t support them with 24 people. 

At Chili Piper, we’ve maintained 90% gross logo retention for five quarters straight — partly because we prioritize matching customer success headcount with actual customers. 

That’s why it’s so essential for your C-Level executives to understand why your headcount calculator is an accurate predictor of future headcount needs.

Because whenever you need to adjust headcount, you’ll be able to point to a particular datapoint to confirm any need or adjustment.

Stay true to your mission

You need a clear mission that’s agreed on from the top down. And one that your team lives and breathes by. 

At Chili Piper, our Customer Success organization’s mission is to “Create and Retain Happy Active Users.”

Retention and Adoption are our major areas of focus. 

What’s next?

If you’re still trying to figure out how to set up your Customer Success headcount calculator, check out our article: How to accurately plan CSM headcount (+template). It includes a fancy headcount calculator template that you can copy and adjust for your own use! 

Here are some other resources that might be helpful for CS leaders: 

Seth Dovev

Seth Dovev is the Sr. Director of Customer Success at Chili Piper. He's passionate about managing our wonderful and growing Customer Success team, focused on providing all of our customers the best experience using Chili Piper. Connect with Seth on LinkedIn.

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