A messy or missing cap table might not just slow you down, it could cost you your next fundraising round.

VCs get flooded with pitches, and if your equity is confusing or missing, they’ll move on fast.

Fidelity Private Shares is an all-in-one equity management platform that helps you maintain a clean cap table, an organized data room, and a clear equity story.

If you’re a finance leader in the SF area, I’d love to buy you a Miller Lite or three on Thursday February 12th. I’m hosting it at an undisclosed Bay Area location, guarded by a squad of ferocious miniature Bernedoodles.

Seriously though, let’s all have a fun night of “networking” (ugh I hate that word).

RSVP below to meet fellow nerds.

The #1 question I got from people during annual planning season was:

“How the hell do I plan for customer success?”

So I figured screw it, let’s solve it together.

And you answered the call!

Below are the results…

But before we dig in… I’d like to thank the following legends for helping me ask the right questions:

A special thank you to John for distributing the survey to his readers via his newsletter Success VP.

Customer Success lives in a weird place (both philosophically in our minds, and geographically on the P&L). Everyone agrees it matters (or we wouldn’t keep staffing it). Fewer people agree on what it actually owns. And almost no one feels great about how it’s paid.

Let’s explore what companies are currently doing, and if incentives (as murky as they be) are driving any better of outcomes.

I surveyed 132 tech companies about how they staff, structure, and pay their Customer Success teams.

And almost nobody believes they've got it right.

In other words:

Yikes.

You might expect this from early-stage startups still figuring things out. But this was a battle tested squad.

The required n equalz slide.

Nearly a quarter are north of $100M in revenue. These are legit companies with real renewal cycles, an actual expansion motion, and incentive plans someone actually had to defend before they went to print.

Yeah. Mostly.

Most respondents report annual renewal rates in the high-80s to mid-90s.

When you look at how companies actually structure CS, you see the same pattern over and over: No consensus.

Could be you, depends on the day.

Which is also why we see a variation in incentive structures, which we’ll get into below. Incentives tend to rhyme with org structure.

Three-way split. CS rolls up to the Chief Customer Officer, the Chief Revenue Officer, or the COO…. probably depends on who the CEO thinks is the strongest leader… or just based on where the last CS leader came from.

Another three-way split. Some companies treat CS as a cost of delivering the product. Others split it across functions. Others drop it into Sales and try to play it off as a revenue team.

When you look at CS headcount as a percentage of the company, a pattern jumps out.

Then it starts to come down.

At most companies:

Early on, you hire CS because things feel wicked busy. Later, you hire CS when the CFO says the math works.

Even as companies scale, most CS teams are still staffed by customer count, not revenue.

That tells you CS is being treated as more of a coverage problem, and less a revenue optimization exercise.

So just to recap where we are so far…

The org charts don't agree, the P&L doesn't agree, and the staffing models don't agree.

Which brings us to the real issue: how CS gets paid.

As you’d assume, if the org structure is fragmented, and the P&L is a choose your own adventure type of deal, the comp plans are inevitably chaos.

But within the madness, a fact emerges:

Say it with me: CS is not paid like sales.

The VAST majority of CSMs are on plans where 20% or less of their comp is variable. Almost no one pushes beyond that. For comparison, most sales reps are on a 50/50 plan.

Any position with less than 40% variable is not how you pay a revenue owner.

Our THIRD three-way split. This is getting tiring.

While light, companies are torn between:

CS incentives feature a long list of proxy metrics.

Those include:

Which brings us to the real problem.

In most companies, expansion is owned by Account Managers, even when CS is measured on renewal rate or net dollar retention.

That creates incentive exposure without control.

It's like holding a defensive coordinator accountable for points scored on offense. They don't have the rock.

That's the big time mismatch. CS does the work to keep customers alive and healthy. AMs show up to close the upsell. And then everyone argues about who deserves credit at comp review time.

That's another data point. If CS were a revenue product, you'd price it like one. Most companies don't. They treat it as included; a cost of doing business, not a line of business.

The existential angst started to set in as I realized:

But here's what the data does suggest:

Renewals are driven by product quality and customer fit, much more than by how you pay your CS team.

Because paying 100% base doesn't feel right. Leadership wants skin in the game. We want CS leaning into outcomes, not just punching the clock.

So we add a little variable. We sex it up a little.

We tie it to something… NDR, usage, QBRs, continued employment. We manifest it into creating alignment.

And then, a year later, we’re still in the 93% who aren't confident we have it right (rise and repeat each annual planning cycle).

CS clearly influences revenue. But it doesn't control it. And the data doesn't show that cranking up variable pay moves the needle on retention.

That's not satisfying. But it's consistent. And logical if the team in question doesn’t own revenue.

So what should we actually do?

If incentives don't drive retention, what's the point of this whole exercise?

The point is alignment, rather than motivation. You're not going to comp your way to better renewal rates based on how CS teams are set up and tasked with today. But you can design a structure that's honest about what CS actually controls, and stop creating frustration with misaligned incentives.

Here's what I'd recommend:

If CS doesn't own expansion, stop pretending it's a revenue role. Pay it like an operational function: mostly base, maybe a small MBO tied to onboarding velocity or adoption milestones. Things in their control.

If CS does own expansion (and you're willing to give them the keys), then pay them like it. Commission on expansion revenue. Real variable. Actual upside (and downside).

The worst outcome is the middle: treating CS like sales in the org chart but like support in the comp plan. Pick a lane, my G.

Kind of addressed in my first point, but it’s so important that it merits repeating. If expansion sits with Account Managers, don't backdoor NDR into CS comp. That creates frustration without a realistic path to changing outcomes.

Incentives should map to levers the team actually pulls. If CSMs control onboarding, usage, and risk identification, pay them on those. If they don't control the commercial conversation, don't pretend they do.

The data is pretty clear: incentives don't magically fix churn. Product quality and customer fit do.

So use comp to reinforce the activities that lead to healthy customers: onboarding speed, time to value, adoption milestones, early risk flags.

Those are input metrics and leading indicators that show up before churn ever does. Have Customer Success linked to the upstream metrics within the customer journey.

The median CS variable is 20% whether you stick the team in Sales or split it across functions. The only time it drops is when you book CS in COGS, where median variable is 10%. But still… we aren’t talking a difference of 50% based on P&L geography. These figures are in the same ball park.

TBH the comp plans already know what CS is. The P&L should match. And many of us are being dishonest with the sales classification because it makes us look better.

If CS is booked as support, own it. Align headcount planning, coverage models, and expectations with that reality, instead of quietly hoping CS behaves like sales when you're not looking.

Customer Success doesn't need to be paid like sales to be valuable. We all agree on CS importance… after all, we keep staffing these teams, in some cases to the tune of +10% of our total headcount at scale.

But CS does need incentives that reflect what the role actually controls. Clarity is kindness and we’ve been wishy washy for too long.

Oh, and yea, it should show up in the right place on the P&L. T’s and P’s to gross margins everywhere.

TL;DR: Medan Multiples are FLAT week over week.

The overall tech median is 4.0x (FLAT 0.0x w/w).

What Great Looks Like - Top 10 Medians:

Wishing you a CS team with appropriate incentives,

CJ