This report outlines three key challenges companies face when designing compensation strategies for customer success teams. First, many organizations over-incentivize expansion and renewal outcomes while neglecting adoption—the foundational element that drives both, leading to misaligned behaviors and higher churn. Second, lack of clarity around CSM, TAM, and renewal specialist roles results in compensation overlap and internal confusion, weakening accountability and execution. Third, subjective or poorly defined adoption metrics make it difficult to measure success accurately and tie compensation to meaningful outcomes, undermining the overall effectiveness of the bonus structure.

The framework outlines the critical alignment issues between customer success manager (CSM) compensation and the essential charters of adoption, expansion, and retention. By emphasizing the shortcomings of current bonus strategies, it highlights the need for more balanced compensation structures that prioritize customer adoption. This encourages lasting customer relationships, reduces churn, and drives sustainable growth in technology and service companies.