Customer Success: CSM Capacity Planning Guide & Calculator

How many Customer Success Managers (CSMs) do we need to give our customers their Appropriate Experience (AX)?

What happens if we ramp sales?

What happens if a bunch of customers upgrade? Downgrade?

How much excess capacity do our current CSMs have?

When will we need to hire more CSMs?

Is our Customer Success Management team too big?

Those are just some of the questions I get from Customer Success leaders all the time.

How to solve this? Let’s dig in.

I put together a Customer Success Capacity Planning calculator using Rock Content’s interactive content platform Ion (Rock has been a client off-and-on for about 4 years and you should 100% use them for your content marketing needs. They’re awesome).

Play around with the CSM Capacity Planning calculator, and just so you can see how cool it is to use Interactive Content for lead gen (seriously, I’m a legit fan of their stuff), fill out the form on the calculator result page to get the full CSM Capacity Planning Google Sheet.

Now, let me explain what all goes into the calculations behind the scenes (of the Rock Content calculator and the more advanced Google Sheet).

CSM Capacity Planning Calculator Inputs

CSM capacity isn’t an incredibly difficult thing to calculate.

The most challenging parts are 1) knowing you need to do it this way and 2) knowing how much CSM time a customer requires for their Appropriate Experience (AX).

Let’s go over the inputs.

CSM Customer-facing Hours

The first question you’ll see on the calculator is:

“How many hours a month does a CSM devote to customer-focused work?””

As I state on there, 120 hours is best practice. But where do we get 120 hours?

9-hour workday.

1-hour lunch.

8-hours available for all work.

No more than 80% of that work should be customer-facing. A CSM that has 110% of their day filled with back-to-back-to-back meetings is NOT going to be effective.

They need time to prepare for meetings, follow-up on meetings, to think, breathe, and to do all of the other stuff a regular human employee must do. So don’t go over 80% of their time being focused on customer-facing activities.

So 40 hours per week, multiplied by 4 weeks, is 160 hours, of which 80% is… 120 hours.

CSM Hours per Customer per Month

The next question you’ll be asked is, “On average how many overall hours per month are spent on one client?”

So there are two inputs you could have here; what you’re doing now (actual) and what’s required to give the customer their AX.

I’d start with the actual for now, even if that’s not what’s required for your customer’s AX.

Eventually – sooner rather than later – you’ll want to figure out what your customer’s AX is so you can create a coverage model that delivers that AX – but for now, just figure out how much time your CSMs spend with your customer and use that.

You’ll need to do this for each customer type.

The Rock calculator only works on one customer type or segment at a time. So if you have Small, Medium, and Large customers, you’ll need to do it three times unless you spend the EXACT same amount of time, every month, with each of those types of customers.

I doubt that’s the case, though.

So pick a customer type, figure out how many hours you spend with each customer, every month, and that’s what you’ll use here.

Think of the average number of hours that are spent on each client per month. This includes time spent on projects, emails, and overall communication time.

This is very likely an exercise you’ve never done – determining how many hours your CSMs spend every month with a customer.

Or if you have, it’s likely you haven’t revisited this or worked to make the time they spend more efficient.

If nothing else, perhaps this might be a forcing function to make you do this… or do it again.

One thing to consider here is that the “average time per month, per customer” is likely a post-onboarding customer. Onboarding may require more hours, dedicated resources, or both.

Likely both.

And you can use this same process to figure out how many onboarders you need, too.

Also note that any movement from one customer segment to another – let’s say a customer is a “Small” and something happens like they acquire a competitor or simply upgrade and now they’re a “Medium” customer – the number of hours a CSM will spend with that customer also changes.

Number of Customers

The third question is, “How many customers do you currently have?”

That’s a fairly self-explanatory question, but as I said above, if you’re doing this on a per-segment basis, that number would be within that segment, not a total, overall customer count.

And it is a moment in time.

The Capacity Planning worksheet on the other side of the calculator’s lead-gen form, allows you to forecast new customers, upgrades, etc. across as many customer segments as you have.

Number of CSMs

The final question is, “How many Customer Success Managers (CSMs) do you currently have?”

Again, this is a simple moment-in-time count. If you have CSMs dedicated to this segment, just use those. If you have CSMs that straddle multiple segments, just put in your total CSM count each time you run this calculator.

Again, the more advanced Google Sheet on the other side of the lead gen form on the result page of the calculator allows for a more advanced segmentation process for both customers and CSMS.

Okay, so now let’s go over the Output of this calculator.

CSM Capacity Planning Calculator Output

Let’s say my CSMs have 120 hours per month of customer-facing activity, they spend 4 hours per customer (in this segment) per month, I have 201 customers in this segment (right now), and I currently have 6 CSMs.

The result will be:

You need 7 CSMs to handle the 201 existing customers you have.

With this in mind, you will need 1 additional CSMs to meet your current customers’ needs. This will allow 30 customers per CSM.

How did we get there?

201 customers at 4 hours per month = 804 CSM hours total required hours to give customers their AX.

I have 6 CSMs that have 120 hours per month available for a total of 720 hours, meaning some CSMs are being forced past the 80% customer-facing-time threshold. This will lead to burnout, mistakes, and in failure to deliver the customer’s AX.

So 804 hours needed, minus 720 available CSM hours, leaves 84 hours still needed to be covered.

That means we need to add one more CSM to be able to provide suitable coverage for our customers without causing CSMs to exceed 80% of their at-work time.

When we add a CSM, we can actually spread the load out a bit more evenly, too, rather than keeping existing CSMs at 100% capacity while having one CSM with only 70% capacity. Or you can do that… up to you.

Either way, you’ll want to start thinking about adding additional capacity when your CSMs are running at about 80% of their available capacity.

If you have a hard time finding or attracting talent, if your vetting or onboarding process takes a long time, you may wish to start this process earlier… 60 or 70%, depending upon your sales / upgrade ramp.

Where do you go from here? Well, here are your…

Next Steps in CSM Capacity Planning

Aside from running the calculator for each segment based on how many hours you spend with a customer today, here are your next steps:

  1. Determine the customer’s Appropriate Experience (AX). I have some trainings on this process this in my Customer Growth Lab.
  2. Figure out how much time you’ll need to deliver the customer’s AX
  3. Run the calculator with those updated numbers (or use the Google Sheet to go even deeper)
  4. Adjust your current operation accordingly
  5. Contact Rock Content (just fill out the lead gen form on the Calculator) and get started with interactive content on their Ion platform for lead gen (or even upsells!).

But wait, there’s more. Want to go deeper into how this really works? Let’s dive deeper…

Behind-the-scenes CSM Capacity Planning Calculator Logic

The logic behind the Rock Content CSM Capacity Planning calculator – if you want to be able to create interactive content like this for your own lead gen, you should reach out to them – is as follows:

Question1: How many hours a month does a CSM devote to customer work? = {{Answer01}}

Question2: On average how many overall hours per month are spent on one client? = {{Answer02}}

(lightbox info: Think of the average number of hours that are spent on each client per month. This includes time spent on projects, emails, and overall communication time.)

Question3: How many customers do you currently have? = {{Answer03}}

Question4: How many Customer Success Managers (CSMs) do you currently have? = {{Answer04}}

The result screen logic is:

Based on your answers, here’s what you need:

You need {{CSMsNeeded}} CSMs to handle the {{Answer03}} existing customers you have.

(+) If a user has a surplus of CSM’s: With this in mind, you will need {{CSMResult}} additional CSMs to meet your current customers’ needs. This will allow {{CustomerRatio1}} customers per CSM.

(-) If a user has a negative amount of CSM’s: With this in mind, you will need {{CustomerResult}} additional customers for your current CSMs to meet their full capacity. This will allow {{CustomerRatio2}} customers per CSM.

The logic behind the result display:

CSMsNeeded = Answer03/(Answer01/Answer02)

CSMResult = CSMsNeeded-Answer04

CustomerResult = (CSMResult*-1)*Answer01

CustomerRatio1 = Answer03/CSMsNeeded

CustomerRatio2 = (Answer03+CustomerResult)/Answer04

**result numbers are round up**

I hope this helps you!

About Lincoln Murphy

I invented Customer Success. I focus primarily on Customer Engagement. Learn more about me here.