Customer Success Compensation Plan — final, for CXO (Pete) sign-off.
Two engines, split by what best practice says each is for.
Retention is a team reward — the CS team shares a pool funded on collective GRR (this is ~75% of variable).
Expansion is individual — a flat
4% on the net-new ACV each CSM drives (~25% of variable), with a matching
4% hardware spiff. A 12-month Sales-led land window, then CS owns the account. Benchmark-tested (Jul 2026 research pass): Gainsight, Primary VC and Custify all put retention at team level and expansion at individual —
full model in the playbook.
The plan in detail
1 · Account ownership
Every account has a single primary owner. CS owns the account once the land window closes; the originating AE owns it before then (see 4). A named backup CSM covers absence but is never separately commissioned on the same renewal — we do not pay two people for one renewal. CS takes renewal ownership for straightforward accounts on handoff; complex / large-enterprise renewals move to CS only once a dedicated Renewal Manager function exists.
2 · Two engines — team retention, individual expansion
Retention is a team reward. A churn is rarely one CSM's fault, so the whole CS team is measured on collective GRR and shares a retention pool — this is the majority (~75%) of CS variable. The pool funds on team GRR:
• Team GRR ≥ 95% → pool funds in full • 90–95% → 50% (partial) • < 90% → no pool
Expansion is individual. Each CSM earns a flat 4% on the net-new ACV they personally drive — the minority (~25%) of variable. No premium over renewal (research refutes it). GRR and NRR are tracked separately so a big upsell can't mask churn.
Pool = 0.3% of safeguarded enterprise ARR, split equally across the CS team, trued-up annually. Gate bands proposed — confirm at sign-off.
3 · Sales ↔ CS split on expansion
CS keeps 100% of any renewal or expansion under $50K. On expansion deals $50K and above, CS earns its 4% on 50% of the deal value; the other half is credited to Sales. No hard cliff — both sides are paid above the threshold, so nobody is incentivised to suppress an enterprise expansion.
4 · Land window — 12 months
The originating AE leads and retains commission credit for the first 12 months of a new account. After 12 months the account, its renewal, and its expansion commission move to CS. Internal policy, not a benchmarked figure — chosen to get CS owning and growing accounts sooner.
5 · Variable design & payout
Base-heavy: 70–80% base / 20–30% variable, weighted ~75% team retention / 25% individual expansion — retention is the bigger lever, consistent with best practice (Everstage, ClientSuccess, Custify converge on 75/25). Individual expansion is paid monthly, ~75–80% at booking with ~20–25% held to collection/renewal (a hybrid trigger, given our contract-roll rate). The team retention pool is trued-up annually. The earlier $1.5M team expansion bonus is dropped — the team dollar now sits on retention, and a team expansion bonus would double up on the individual 25%.
6 · Hardware spiff — 4%, one number
Hardware carries a 4% spiff matching the software rate, so the plan runs on one number. Paid on net hardware invoiced (after any discount the CSM gives), kept separate from software commission. Because it's net-after-discount, every device given away comes out of the CSM's own reward. Guardrails: discount up to 10–15% at discretion; beyond that or free bundles need CXO / Sales sign-off; all give-aways logged.
Paid on revenue, not margin, for simplicity. Switch to hardware gross margin at the next review if thin margins bite.
Still to finalise at sign-off
• GRR gate bands (95 / 90 breakpoints and rates). • $50K split threshold: flat dollar vs % of initial ACV. • Timing to stand up the Renewal Manager function.
Basis: 22 verified claims from a research pass; rate structure, land window and hardware confirmed by the CEO. Single-owner, the $50K split and the NRR variable design are benchmark-backed; the 12-month window and hardware treatment are internal policy calls.