How would you design the targets and incentives for a team of CSMs?
What the interviewer wants to hear
- Tie targets to retention and customer outcomes
- Balance GRR, NRR and leading indicators
- Adjust for segment and book differences
- Avoid incentives that encourage bad behaviour
- Review and refine with data
Model answer
I would start with what the business needs from CS: keeping revenue, growing it responsibly and delivering real outcomes. So the core targets would be gross revenue retention for the CSM's book and a share of NRR or expansion, weighted differently by segment. Enterprise CSMs might have more expansion weight, while pooled SMB CSMs focus on retention and adoption. I would add one or two leading indicators, such as onboarding completed on time or success plans in place, but not too many, to keep it simple. I would watch for bad incentives: pure expansion targets can push upsells on unhappy customers, and pure activity targets reward busy work. I would set targets using historical data for each book, review them each half-year, and compare results with customer health to make sure the plan drives the right behaviour.
Can you answer it under time pressure?
Take a timed hard round and get scored on every answer.
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