When times change, customer success changes with them. Most customer success myths stem from the early days when our industry was in its infancy. Many of the practices that used to work no longer do—in fact, they could even be hurting your business.
Mythbuster Monthly is a ChurnZero series dedicated to laying those common customer success misconceptions to rest. This installment’s myth is brought to you by ChurnZero Customer Success Manager (CSM) Allison Mortens and covers the widely held but false belief that there’s a universal standard for the number of accounts or amount of annual recurring revenue (ARR) that each CSM can manage. After reading that sentence, I bet a figure popped into your head. Does it have any merit? Let’s find out.
Myth: One CSM to $1M ARR is the ideal ratio in CSM portfolio allocation
If you’ve been in customer success for some time, you’ve likely worked on a team where the measure of one CSM for every $1 million ARR was a defining metric to build a CSM’s book.
The exact dollar figure isn’t what’s problematic about this rule. You could debate whether it should be $1 million, $2 million, or $5 million until you’re blue in the face and still not have addressed the real issue.
The ubiquitous million-dollar rule is troublesome for two reasons:
- It doesn’t factor in your customer journey. What customer touchpoints (interactions) occur within your journey? How often does each touchpoint occur? How much time does it take to facilitate each touchpoint? The answers to these questions will be different for every company, as will the amount of effort it takes their CSMs to deliver value along the journey.
- It assumes all customers are of equal value to the business. They’re not. You need to know the makeup of your customer base to determine appropriate engagement levels for different cohorts. Without segmenting customers to understand where the revenue or value thresholds exist, you can’t effectively build engagement programs or a manageable book for CSMs.
Why does the CSM to customer ratio matter?
The CSM to customer ratio directly impacts your team’s ability to deliver proactive, high-quality service. If CSMs are stretched too thin, they’re forced to operate reactively, which weakens customer relationships and increases churn risk. A healthy ratio ensures that each customer receives the level of attention needed to reach their goals and renew with confidence.
When managed well, the ratio becomes a strategic tool, not just a staffing number. It helps you balance workloads, set performance expectations, and plan for scale without sacrificing experience.
It’s the simplicity of benchmarks that makes them so appealing, but it’s also the very thing that can lead some astray when they are not applied within a proper context. Always consider your company’s size, industry, maturity, mission, customer base, and workplace culture when deciding if a benchmark is fit for use.
What factors impact the CSM to customer ratio?
Many factors influence your ideal ratio, including customer segment complexity, product maturity, support model, and CS engagement strategy. For example, an enterprise customer using a robust, customizable platform will need more frequent, strategic touchpoints than a self-serve customer on a streamlined product.
Internal elements like the skills of your CSMs, availability of CS operations support, digital CS tools, and team efficiency—also play a critical role. A team with strong tech-touch programs and automation can handle larger books without compromising service quality.
Use a bottom-up approach to establish CSM book size and coverage ratio
Finding your magic number for CSM book size ultimately comes down to CSM capacity. We recommend conducting a bottom-up analysis that looks at the expected workload of your CSMs to determine the number of customers per CSM. Your customer journey, which dictates capacity, will form the basis of the analysis. We walk through a step-by-step process on how to do this—with working examples—in “Customer success capacity planning and budget guide.” But if you’re looking for the Cliff Notes, here’s the gist.
Start by adding the time required to deliver monthly customer touchpoints, such as success plan reviews, business reviews, and product announcements. Factor in their frequency and duration.
Then, add the time required to deliver one-time customer touchpoints like kick-off meetings. The math gets trickier here because you need to smooth the time out across the customer base (more on that in the Customer success capacity planning guide).
Next, add the time required to complete inbound activities each month, and total all the above.
Then, subtract the time spent on monthly internal activities such as company meetings, email catchup, and one-on-ones. A rule of thumb is to reserve two-thirds of a CSM’s time for customer-related tasks and one-third for company work.
Take the available hours per CSM per month and divide it by your adjusted workload total to arrive at the number of customers each CSM can realistically support. Voilà. You have a made-to-order CSM coverage ratio.
How do I determine the right CSM to customer ratio for my business?
The most accurate way is to analyze your customer journey and calculate how much time it takes to deliver the right experience. This bottom-up approach ensures your ratios are based on actual workload, not arbitrary benchmarks. It starts with mapping recurring and one-off touchpoints, estimating time spent, and factoring in inbound volume and internal obligations.
From there, you can calculate how many customers each CSM can reasonably manage. This method not only builds internal confidence in your CS model, it also provides solid footing for headcount conversations with finance and leadership.
After performing this analysis, you’ll have the leverage you need to talk with your CFO and leadership about the resources it takes to deliver the desired customer experience.
Build a CSM coverage ratio for every customer segment
By now you know, there’s no standard number of customers per CSM. It’s unique to every company—but also to every customer segment.
Don’t stop short of applying the bottom-up analysis to each of your individual segments. Customers’ profiles and needs can widely vary within a single company based on their strategic value, spend (ARR), product use case, and more. Engagement practices and programs that correlate with these cohorts require distinct levels of CSM resources. Consider the level of effort required to deliver every version of your customer experience and ensure that’s reflected in your CSM book size.
Segments form the basis for your bottom-up analysis, but they also serve as the foundation for effective Customer Success. Differentiating customers is the first step of any Customer Success strategy.
Get our “Smart segmentation guide” to learn how to build segmentation models based on influential factors such as customer attributes, lifecycle stage, customer behavior, potential value, and customer needs. It outlines questions to ask when creating your customer lists and example segment criteria.
