Top Metrics and Benchmarks for Customer Success - with special guest Nick Mehta, CEO Gainsight

Live from Schenectady, New York, it's SaaS Talk with the Metrics Brothers, Growth and CAC.

And I'm Growth, better known as Ray Reich, founder and CEO of Benchmarkit.

And I'm CAC, better known as Dave Kellogg, independent consultant, EIR at Balderson Capital, and the author of CalBlog.

And together we are the Metrics Brothers.

And quite the dyad at that. But today, Ray, we seem to have somebody third-wheeling on the show. Who's your friend?

Well, it's your friend too, Dave. It's Nick Mehta.

Hey, Dave, it's me, Nick from Gainsight.

Oh, Nick, I didn't recognize you. I guess because you're not in a Steelers jersey or singing some Taylor Swift song.

Well, lucky you're not. I'm not singing. Lucky for all of you. Okay.

It's very apparent I'm going to need to be the adult in the room here. So I thought we'd do something that we've never done before on SAS Talk, and that is invite a guest.

Who's fired up? Who's fired up?

Dave, look, I did not choose the hip-hop life. That life chose me.

Guys, I think I may be regretting the decision already, but let's plow ahead. And who is better to talk about customer success and product experience metrics than Nick Mehta, the CEO of Gainsight?

Who's better? I'll give you a minute, right? Like, I don't know, Esteban Kulski, Paul Greenberg, Marc Benioff, Frank Sloopen.

Hey, wait, wait, Dave, I thought we're friends. You You don't say the S-word around me.

Oh, I'm sorry. I know that's probably sensitive.

Nick, Dave, can we dive into the meat of today's conversation as I'm held to a very tight episode length mandate by Kat here? So I am honored to have Nick Mehta, the CEO of Gainsight, as our first guest on SaaS Talk. And we have a special episode focused on customer success and product experience metrics. But before we now have Nick and Dave share their insights, let's hear a special word from our presenting sponsor. The Metrics Brothers is proudly sponsored by Benchmarkit, the B2B AI and software industry's largest, broadest, and most contextualized benchmarking index. Dave Kellogg and Ray Groth Wright have put the Metrics Brothers podcast on hiatus for the remainder of 2026. All episodes we have ever recorded are still available on your favorite podcasting app. You can reach Dave @kellogg and Ray on LinkedIn @rayreich. Thank you so much for listening to the Metrics Brothers podcast.

Okay, so, uh, we have 4 parts of today's episode. We're going to do a rapid fire with Nick on metrics, then we'll allow him to kind of elaborate on what he said. Then we're going to go to a section that Ray will lead, discussion of the business value of customer success. We're going to talk about the S-word, the Slootman word, with Nick briefly. And then we're going to talk about product experience, something Gainsight got into, I don't know, probably 5 years ago at this point, maybe around that, and what metrics and why they did that. So let's jump into the rapid-fire round, if we may. Nick, I'd like to— I'm just going to spout out about 7 questions, and I'd love your hot take answer.

Okay.

In some cases, I'm looking for a number. And if you're not comfortable with a single number, just give me a range. But these are the things people ask me when it comes to CS. So we'll see. I'd love to ask you. Here we go. ARR per CSM.

Well, you said there's a hypothetical company. Well, let's say $30,000 ASP. And our data benchmarking shows $2 million per CSM at that size. If you have a very high ASP, like let's say it's $1 million per customer, you're talking $10 million per CSM. So, the range varies largely based on the size of the customer.

Got it. Accounts per CSM.

So, it's very similar. You know, it's more efficient the more— the bigger your ASP. For a company with $30,000 per customer, you're about 53 accounts per CSM, plus or minus, which kind of works out to that roughly $2 million. If you're, you know, over $1 million per customer, you're at 5. If you're in this like $5,000 to $10,000, you're a couple hundred per customer.

Got it. Reporting relationship. Who does customer success report to? Who should it report to?

So, there's 2 doors and it depends on what you want to optimize for. Door one is I've got to improve my customer experience. I got to focus more on customers. Have the CCO report to the CEO. Some people, as they get more mature, they want the CCO and the CRO to both report into like a president. to tie it all together. I find that to be something that's done later stage. So if you're an early-stage startup, $20 million of ARR, you probably want it reporting directly to the CEO.

But in both cases, it's not reporting to sales, notably. Yeah.

See, I think that's a misnomer is reporting to sales is the wrong approach. Reporting to an overall customer leader, like HubSpot has somebody who has sales, marketing, and CS, that's great. But it shouldn't be like shoved in under a sales leader as like an afterthought.

Renewals responsibility or not?

At a young company, no, I would make that the response, have a separate kind of sales account management function. As you get more mature, try to optimize CSMs owning renewals, especially for the more transactional products, is quite popular.

NPS or not?

NPS is great for acting on individual customers. They gave you an attractor, they gave you a promoter. As an overall metric, it's a vanity metric. You can look at it to make yourself feel good, or you can hide it if the numbers aren't good. It's a vanity metric.

Do you use another metric for tracking customer satisfaction then?

Well, I think the key thing is not about NPS. It's about what's the business value driving for a customer. So, one of the things some of our customers do and we do is measure a survey of what business outcomes you're achieving. What's the ROI compared to what you bought? That's a much more tangible question than would you recommend this to a friend?

Got it. Last question in rapid-fire mode. What other supporting resources are typically on the CSM? team like CS ops or customer success architects or TAMs and in what ratios? Yep.

So CS ops for sure. The ratio is anywhere from 8 CSMs per ops person to 12 in these earlier stage companies. So you definitely want to invest in that. If you have a technical product, definitely CS architects kind of back-ending or TAMs back-ending the CSM. The ratio there just varies on the technical nature, but You'll often see kind of like a sales engineer, you'll see like 3 CSMs for 1, you know, CS architect, et cetera. And then beyond that, don't forget you need to invest in enablement. It doesn't have to be a full-time person, but who's enabling the CS team? Marketing needs to be working them to give them content. So there's really a lot of other functions, but ops and CS architects, the 2 core.

And out of curiosity, TAMs?

TAM is a CS architect in a different name. And it's just about whether you charge or not. And what we find is companies that, as they become more mission critical, you can totally charge for TAM. Gainsight has TAMs. Our customers buy 'em all the time. If you're a young company, the customer's not gonna be willing to spend that money. So you kind of have to invest on your dime.

Super. Well, thanks for indulging me in the rapid-fire mode there. Ray, do you have any questions or comments on that? Or Nick, is there anything you wanted to elaborate on?

The only thing I'd add, Dave, is I appreciate you asking me to give answers versus it depends, 'cause it depends is just a weak answer. And the truth is, There's a bit of a decision tree. You know, it's basically what's your average selling price and how big are you? And based on that, you can get to actual answers.

So when I was in business school, this was literally in a marketing class. The professor said the answer to every marketing question is it depends. And the brain says, knowing depends on what? So it's true at one level, but it's not fun.

Also, when you hire a consulting firm, that's what you're paying for is getting it depends as the answer.

So, okay, so now we're going to turn it on to the person who had to be a chief revenue officer for many years. When the CEO said, is that deal going to close? It depends was never an option.

Good way to get fired. Okay, so—

What's the forecast, Ray? It depends.

Depends if customer success can help me get more CSQLs. But besides that, outcome metrics. We always talk about how do you justify the investment in CS? And depending on the size of the company, you know, I mean, it's anywhere from 40% up to 10%, 11% of revenue can be consumed by CS. Nick, what are the top 3-level outcome metrics you would recommend to measure a CS team's business impact by?

Yes. So number one clearly is gross retention because part of CS is making sure that we have this foundation of successful customers that are staying with us, growing, we're maintaining the price point. I say gross, not just net, Because sometimes net can hide the churn, right? So net includes expansion, as everyone, most people listening know, and gross doesn't include expansion. And so you gotta look at that floor of gross. Now you should also look at net, but some people look at, you know, I'm not just, I'm not CSM driving the sale on my own for the expansion. So this is where customer success qualified leads come in. What's my ability to drive business for the sales team and help them? And then third is really efficiency at this point in this world of, You know, getting higher rule of forty scores and all that. It's basically what percentage of AR you're spending on CSM. So gross retention, net you know net retention in the form of CSQLs and percentage of AR on CSM.

So Nick, have you ever heard me give my riff on French railroad crossings? Have you heard this one?

I know, but I'm intrigued.

So you'll love this, I hope. There's a sign they put at all French railroad crossings that says "Un train peut en cacher un autre," which is one train can hide another. So they're saying if you're licked to this train, don't start going out because you're going to get hit by the other direction. It's exactly how I feel about GRR and NRR, right? One train can hide another. You've got to look at both.

Look at that French analogies. This is an awesome—

I always love that sign.

That's why he always buys the French champagne when we get together.

Yeah, I love that. Always, always.

Nick, you didn't mention one and I understand why, but I want to ask you because you hinted at it earlier. Customer verified outcomes. You retain customers today. Don't you almost have to get CS focused on trying to measure that whenever possible?

Well, Ray, that's why I'm glad you asked because what I described are what we call lagging outcomes, which are the things you do to drive the business, but then what drives those? And so, what you find in our view is there's, you know, a set of things. But if you wanted a recommended framework, we call it DEAR, D-E-A-R. Deployment, you know, what percentage of stuff they bought, they deploy. Engagement, are you getting regular engagement with the executive sponsor? Adoption, everyone knows that, are they using it? And then ROI, that's the business verified outcomes. And people can measure that in different ways. If you have a product, like let's say you're a healthcare IT product and you do the billing for the customer, the ROI is really simple. Are you getting the doctor paid more and quickly and stuff like that? In a lot of software though, you don't see that outcome directly. So this is about aligning then with the client on what are their goals And what have you done to achieve them? And kind of verifying with them. We call it a verified outcome that you can then use with procurement later on when you're doing the renewal and procurement's like, we're not getting any value. And you're like, well, your team has said we're doing X, Y, and Z. So it's about really closing that loop on the value sold to the value delivered.

Ray, let me jump in. I wanna switch from French railroad crossings to baseball because you missed one of my favorite metrics, which is saves.

Saves, yeah.

Do you count saves where a customer was kind of on a trouble list And then saved. And I'd love to hear your thoughts.

Yeah. So we have a metric that we use and other customers use called red to green, right? Which is essentially what you're talking about. They were red and then we turned it around. I think that it's an important one and you have to watch out 'cause you're now incentivizing people to wait for the diving catch, right? And like celebrating that, not the CSM who onboarded the customer really well, has been aligned from the beginning, maintains the relationship, and there's no drama at all. Some of our best CSMs never had any saves because they didn't have to, you know? And so that's, I think it's very important, Dave, what you said, and don't get into just a firefighting culture.

That's fantastic. Because, you know, it's actually quite funny in baseball, a save is protecting the win, right? It's not getting it. If you're losing when the relief pitcher comes in and you win, the reliever gets the win, not the save.

Right.

So it's interesting. I got to explore that more because I hear totally what you're saying, which is red to green. Kind of implicitly in a sense red, in a sense a diving catch. And what's, what's better than red to green? Green to green.

Green to green. Yellow to green, like we're doing okay. I guess what we're doing was we're playing baseball across the railroad track in France, right? Is that what's happening?

There we go. That happens a lot. You know, they do that.

Yeah. Nick, welcome to analogy hour. That's what I call this.

I love analogy hour. It's awesome.

Okay. Let's talk about the letter that we aren't supposed to be sharing on this show.

The S-word.

Uh-oh.

The S-word. So, do you hear the story a lot, Nick? You must, in Amp It Up, Slutman's book, his second book. Yeah, yeah. You've never heard that story where he said— I've never heard of that. But Nick, if customer success is someone's job, then it's not everyone's job.

Well, that's what I've heard. You want me to give you my answer?

Yeah, yeah, absolutely.

Okay. Well, first of all, I mean, obviously, Frank Slutman is the CEO of Snowflake. was the CEO of ServiceNow and the CEO of Data Domain, has created hundreds of billions of dollars of value. I mean, so how do you even criticize him? Well, I'm going to anyways.

Let's go for it.

In this one way, right? Amp It Up is a great book if you haven't read it. I read it, but there's this one chapter that's like, customer success is completely overrated and it's everyone's job. You shouldn't have a team on it. I'm like, come on, dude, why do you have to pick a fight with me? Aren't there better people to pick a fight with? And This is clearly, Dave and Ray, going to end in some kind of cage death match with me and Frank, but I'm going to bulk up a little bit to do that.

Yeah, clearly.

But when I read the book and obviously lots of great things about it, he's a super smart guy, but I think the truth is that it's an outlier example that I think doesn't generalize. And the analogy I'm going to use is it's like being like a kid and being like, I want to learn from Michael Jordan. It's like, learn from Michael Jordan. He's this outlier athlete, right? And I think what's happened is Snowflake's an outlier company in that it naturally grows and you just naturally put more data in it. And I'm not saying their job's easy, they've done an incredible job, but it sort of becomes baked into the fabric. There's a lot of products out there that aren't like that. You got to continue to drive the value and you can be engineered out if you don't have that. So that's one thing is their business is really different. Second, which is interesting, is even ServiceNow, where he was there when he left, has hundreds of CSMs now. So I'm just saying things kind of change. But one of his arguments is product is the answer. Make the product better. And the truth is that, yes, make the product better. We all agree with that. But there's a lot of products where change management matters a lot. Like, I know you worked in the enterprise performance management space, right, Dave? And like, you need to make sure people are using it and getting value. It's not just like building an awesome product. And so there's a lot of stuff in there about, you know, let the client do that, you know, figure out the outcome. I'm like, no, the client expects the outcome and the vendor to drive it. You know, let CSMs shouldn't exist. And I'm like, well, they tie to revenue. So I think there's a lot of things that he talks about that are very smart if you have this very specific kind of business that just naturally grows and is super technical, whatever. If you're like the typical SaaS business, my gosh, if you don't do customer success, you are screwed.

Yeah.

And I've seen this firsthand. I'm not just biased. I've seen it firsthand because I've seen a lot of companies where they canned the whole CSM team and 2 years later they're rebuilding it.

That's interesting, Nick. So you're saying no CS doesn't highly correlate to 160% NRR?

No, I mean, their business has incredible metrics which aren't really tied to CS or not. I, I do think that the last thing I'd say is one of the arguments he makes is Everyone's in customer success. You don't need CS people. So my retort is, so yeah, everyone's in sales too. So we don't need salespeople, right? Like, why do we need salespeople if everyone's in sales? And the argument is, in my opinion, very vapid because it's not looking at the nuance of if it's important, somebody's got to own it.

All right. So let's talk about product experience now, right? Because I suspect I can't see the timer today for some reason, but I suspect we're getting close.

For this conversation, I'm going to give you 4 minutes, Dave.

Ooh, okay. There we go. Luxury.

Lucky day.

So Nick, I'll say quite frankly, when you got into product experience, we actually had a chat around the time that you did that. I don't know if you remember it. And I was kind of surprised you did it. And so first, I'd love to know, can you just tell people real quickly, why did you do it? When did you do it? I'll just pack it all into one question. Why'd you do it? When'd you do it? How's it going? And what do people measure? This is the Metrics Brothers. So at the end, we want to know what you're measuring.

So people, the reason we got into it, we talked to like a lot of our clients, chief customer officers, said, what's your biggest challenge? They said, my biggest challenge is product adoption. And it's not just the engineering teams and product teams. It's the challenge for the customer-facing teams, sales, CS, etc. But they said that the challenge that they dealt with is their engineering team was awesome, but they're always building the new feature. So they're never thinking about the adoption of the existing feature in terms of telemetry, like measuring the adoption, in terms of driving adoption in the app, getting feedback in the app. And so we end up building, buying a small company and then building on top of it. to basically put code in your app or in your mobile app and then measure adoption in real time, drive adoption through kind of in-app guides, and then get feedback in the app. And so we did that and our CS customers loved it. Now we had to learn how to connect with the product team and the CS team together because that product team is a different stakeholder. It took a lot of work, but we're seeing tremendous amounts of interest now in those things connecting together.

Yeah, I'm guessing I'm guessing it was a really difficult cross-sell because to a different buyer, and those cross-sells are never easy.

Super.

It's getting easier now, but it was super hard early on for that exact reason.

Okay, we made it through and we're still friends, right?

I think so. I mean, he said the S-word, but I'm gonna put that behind him because he also talked about Taylor Swift. So we kind of— you kind of bound— that's an S-word that's positive.

And then so yeah, broke even.

Exactly. So since we have like a minute and a half left, do you mind if I throw out a question that we didn't even script? We never talked about?

Let's do it.

So, Nick, what are the attributes of a world-class, best-in-class customer success team? What are the 2 or 3 things that everyone should be looking at? Yeah.

So, at an individual contributor level, because the team is a bunch of people too, it, you know, there's lots of different things. But to me, the 3 ones that are critical are curiosity, genuinely being interested in a client and their business and their goals, right? Not just like faking it with the script. Number 2 is grit, powering through every change in your client, every outage, every technical issue. And then number 3 is being a great cross-functional collaborator internally. Because if you're a CSM, you've got to get things done internally on behalf of the client for product or sales or whatever. Now, as a team, it's all of those things. But then on top of that, this willingness to support each other because inherently customer success is All of us working together. This mindset that is not just about firefighting, but it's about preventing the fires altogether. We talked about that. And it's this ability to constantly be learning, the beginner's mind kind of concept, because customer success is evolving, your product is evolving, it should never stop.

So, on that vein, Ray, since you opened it up, I've always liked entry-level CSM being an SDR before. Like, SDR can graduate 2 directions. One is to sales, one is to CS. A lot of people don't think about the second one. I'm curious if you like that path and have seen it.

We've seen it. We've had Gainsight SDRs become CSMs. We've seen a lot of our clients do it. And I think, you know, if the product's super technical, that might be harder, right? Because the CSM may need to be super technical. But otherwise, you know, as I think SDR is like an incredible way to start, you know, you get tons of grit because it's really hard. You have to be curious and learn the customer's needs, right? You have to collaborate. SDR is a hard job. And it's a great way to get into lots of jobs. I love what you said though. Typically it was just the sales career path. Now there's multiple.

Okay, CAC, you wanna wrap it up or can little brother Growth do that?

Little brother can do it. Go ahead, Growth.

Okay, well, I think we made it through our first 3-person co-host with our special guest, Nick Mehta. Nick, we cannot tell you how much we appreciate it. And it went so well, we might even try it again someday.

I love it. And do I get to be like another nickname? Can I be NRR if you're CAC and Growth?

We can give him an honorific. I'm jealous.

NRR. I have one for you, but I don't know if Taylor Swift would appreciate it.

Oh geez.

Okay.

Don't say it then.

I'll call you NRR. All right. Well, thanks everybody. Thanks for joining us. Thanks, Nick. It was great having you on the show. See you next week. The Metrics Brothers AI, SaaS, and More is a production of The Metrics Brothers Growth and CAC and a member of the Benchmarkit Podcast Network. By accessing this podcast, you acknowledge that The Metrics Brothers make no warranty, guarantee, or representation as to the accuracy or sufficiency of the information provided. provided, or the humor content of the jokes told.

Ray.

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Thanks everyone for listening. Bye-bye now.