Free Customer Success Tool - Customer Success Metric Metric: Churn-to-CSM Ratio

Formula for Churn-to-CSM Ratio

Basic Formula

Churn-to-CSM Ratio (%) = (Number of Accounts Churned ÷ Total Accounts Managed by CSM) × 100

Revenue-Based Churn-to-CSM Formula

Churn-to-CSM Ratio (%) = (Revenue Lost from Churn ÷ Total Revenue Managed by CSM) × 100

What Churn-to-CSM Ratio Includes

Customer Churn

• Number of customers lost during a specific period.

Revenue Churn

• The monetary impact of churn, reflecting the value of lost accounts.

CSM Account Portfolio

• The number of accounts or revenue responsibility managed by an individual CSM.

Account Characteristics

• Factors like customer health, segment size, or complexity that influence churn.

Why Churn-to-CSM Ratio Matters

Retention Indicator

• Highlights how effectively a CSM is retaining their accounts.

Workload Balance

• Indicates if a CSM’s portfolio size or complexity is impacting retention.

Team Performance Benchmarking

• Helps compare performance across CSMs to identify training or support needs.

Operational Insights

• Pinpoints systemic issues in customer management or churn mitigation strategies.

Key Drivers of Churn-to-CSM Ratio

Account Health Management

• The ability to proactively identify and address at-risk accounts.

CSM Workload

• A high number of accounts may limit the ability to provide adequate attention to each customer.

Onboarding Success

• Incomplete or ineffective onboarding can lead to early churn.

Customer Fit

• Mismatched customers are more likely to churn regardless of CSM efforts.

Engagement Quality

• Regular and meaningful touchpoints improve retention and reduce churn risk.

How to Improve Churn-to-CSM Ratio

Segment Accounts Effectively

• Prioritize high-value accounts and distribute workloads based on account complexity.

Monitor Health Metrics

• Use tools to track customer health scores and intervene early with at-risk accounts.

Strengthen Onboarding

• Ensure customers reach their Time to First Value (TTFV) quickly and effectively.

Use Playbooks for Churn Mitigation

• Equip CSMs with proven strategies to address common churn scenarios.

Provide CSM Training

• Focus on skills like relationship management, product knowledge, and problem-solving.

Optimize Portfolio Size

• Reassess the number of accounts assigned to each CSM to ensure quality engagement.

Tools to Measure and Improve Churn-to-CSM Ratio

Customer Success Platforms

• Gainsight, Totango, ChurnZero to track churn metrics and health scores.

CRM Systems

• Salesforce, HubSpot to monitor account activity and identify patterns in churn.

Analytics Platforms

• Tableau, Looker for comparing churn ratios across CSMs and identifying trends.

Conclusion

The Churn-to-CSM Ratio provides valuable insights into the effectiveness of individual CSMs in managing and retaining their accounts. By tracking this metric and addressing its drivers, teams can optimize account distribution, improve retention strategies, and support CSMs in achieving better outcomes. A balanced workload and proactive engagement are critical to maintaining a low churn-to-CSM ratio.