Close this search box.
Close this search box.

Capacity Planning For Customer Success

How do you approach capacity planning for customer success? There are a lot of moving parts to building a profitable model.

When you ask a COO or CFO about capacity planning for customer success, it can get dicey. They may be completely on board with investing in a customer success team, but they really don’t want to add to their COGS dramatically. They are sold on the premise that a well-chartered and instantiated CS team can be cost neutral or even a profit center, but they need to validate the numbers. They wonder what the real cost of each Customer Success Manager (CSM) is and how to build a model that’s sustainable, delivers value to the customer, and doesn’t dilute profits.

In the trenches, VPs of customer success are trying to get a handle on the real costs and ideal CSM: Account Ratios. But, even that is not a straightforward or simple calculation. While we all wish there were a magic number of CSMs/account or ARR, Lincoln Murphy is right to say that any suggested coverage ratio is a myth.

So, how do you approach capacity planning for customer success? There are a lot of moving parts to building a profitable model, but there are some foundational considerations you should start with:

  • A realistic and marketable menu of offerings
  • Role definitions
  • Data-supported understanding of designed and actual efforts and capacity

Menu of Offerings

How do your customers reap the full benefits of your solution? What prevents them from reaping the full benefits? Addressing these questions will help you begin to define a menu of services your team must provide to help your customers attain full value. Once you’ve determined your menu of offerings, determine which services you will provide within your sales (a subscription for certain services or a retainer of time) and which you will charge for above and beyond the original sale. Capacity planning (and monetizing your Customer Success) relies heavily upon the accuracy of this menu.

“Conducting an assessment of which customers will need which services and then assigning and defining roles and responsibilities is crucial.”

Define Roles Skills Inventory

Once you have determined your menu of services, you need to identify who on your team will provide them. Conducting an assessment of which customers will need which services and then assigning and defining roles and responsibilities is crucial. This involves knowing your customers, your services, and your teams’ skills. Strong leadership is extremely important in defining roles and clarifying expectations for all team members. Accurate capacity planning relies upon team members knowing and fulfilling their responsibilities.

Understanding Effort and Capacity

While menus and role definitions are key pieces in capacity management, there’s some deeper understanding of effort that will foster greater accuracy in your planning. Understanding your real efforts will produce a more realistic calculation of capacity to use in building your model.

In building an accurate capacity model for Customer Success, we rely upon clear insights into:

Designed Effort, Effective Availability, Designed Capacity, and Productive Capacity

  • Designed Effort is the amount of effort we have suggested (through our best practices analyses) an account SHOULD require. For ultimate accuracy, Designed Effort should incorporate customer facing meetings, prep, internal meetings, communications, and other efforts .
  • Effective Availability is the amount of time a CSM is ACTUALLY available to work with an account. This calculation reflects (total Availability) MINUS [Indirect Effort (required work done behind the scenes, such as internal meetings) + Unplanned Effort (all the rest of the time, inclusive of wasted time and distractions that are not core to the account)]

For instance, if a CSM has 160 hours of total availability, they may actually only have 120 hours of Effective Availability because 40 hours of their allotted hours are consumed by internal meetings and/or distractions.

(Note: This value is an important one in understanding your actual capacity for a CSM. If your model ends up being difficult to defend, you may need to address Unplanned (unproductive) time spent to establish greater effective availability.)

  • Designed Capacity is that amount of time we would ideally like to allocate to each CSM per account. This calculation is based upon ideal conditions where no time is unplanned and all indirect efforts are fully incorporated into the capacity model. It is always inaccurate.

When building a capacity model, Designed Capacity can be misleading.

  • Productive Capacity (sometimes referred to as Effective Capacity) is a more realistic calculation and will result in a more manageable process. Productive Capacity is the output per cycle that we can realistically expect when we factor in indirect and unplanned efforts.

The difference in Designed Capacity and Productive Capacity is a reality check.

Designed Capacity = Total Availability/Designed Effort (Total number of Accounts you think a CSM can handle)

To gain a realistic view of your CSMs capacity, you SHOULD calculate

Productive Capacity = Effective Availability/Designed Effort (Total number of Accounts a CSM can actually handle).

Now that you have a handle on Productive Capacity, you can begin to do more accurate capacity planning for your CS team. Actual costs are best determined when you can glean real data on the time that each CS spends performing their duties for each account. Using a Customer Success Management platform that tracks time is incredibly helpful in consolidating this data.

Another important note about capacity modeling is that it’s not uncommon to identify that some areas of a Customer Lifecycle require more effort and different skill sets. For instance, does core enablement require more advanced technical skillsets, while conducting QBRs best conducted by CSMs who understand the business model better? Capacity modeling and resource allocation should take into consideration the effort and scope of Customer Success tasks and assign responsibilities accordingly.

One final point about capacity planning for customer success…if you build the model right and staff it optimally, you’ll find that just when you have managed to a break-even state, your customers will begin expanding their relationships with you, (and paying you for additional services). This means your coverage costs should go down, and your model will need to be redesigned for a profitable state, rather than just a break-even state.


  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events


    Strategic Planning Workshop

    1:00 - 5:00 pm

    Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process

    Executives expressed frustration with their current strategic planning process. Issues include:

    1. Lack of systematic approach (70%)
    2. Laundry lists without prioritization (68%)
    3. Decisions based on personalities rather than facts and information (65%)


    Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns.  They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning.  Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process.  This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented.  If you are ready for a Strategic Planning tune-up, select this workshop in your registration form.  The additional fee of $695 will be added to your total.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.