CODITECT Customer Success Economics
Overview
This document models the customer success function economics, including support costs, success team scaling, and the relationship between customer health and revenue outcomes.
1. SUPPORT COST MODEL
1.1 Support Cost by Tier
| Tier | Monthly Support Cost | As % of Revenue | Tickets/Month | Cost/Ticket |
|---|---|---|---|---|
| Individual | $0.50 | 3.3% | 0.2 | $2.50 |
| Team | $15.00 | 6.0% | 2.0 | $7.50 |
| Enterprise | $150.00 | 11.5% | 10.0 | $15.00 |
1.2 Support Volume Projection
| Month | Individual Customers | Team Customers | Enterprise Customers | Total Tickets | Support Cost |
|---|---|---|---|---|---|
| 6 | 635 | 27 | 3 | 211 | $808 |
| 12 | 15,831 | 317 | 40 | 4,200 | $14,566 |
| 18 | 51,990 | 1,208 | 151 | 14,326 | $49,715 |
| 24 | 115,991 | 3,093 | 387 | 33,228 | $114,756 |
| 36 | 250,000 | 8,000 | 1,000 | 78,000 | $267,500 |
| 48 | 450,000 | 15,000 | 2,000 | 143,000 | $487,500 |
| 60 | 636,000 | 22,000 | 3,000 | 202,200 | $690,200 |
1.3 Support Channel Mix
| Channel | % of Volume | Cost/Contact | Target Resolution |
|---|---|---|---|
| Self-Service (Docs/FAQ) | 60% | $0.10 | Instant |
| Chatbot/AI | 20% | $0.50 | <2 min |
| Email/Ticket | 15% | $8.00 | <4 hours |
| Live Chat | 4% | $12.00 | <15 min |
| Phone (Enterprise) | 1% | $25.00 | Immediate |
2. CUSTOMER SUCCESS TEAM SCALING
2.1 CSM Coverage Model
| Customer Tier | Customers per CSM | Touch Model | Annual Activities |
|---|---|---|---|
| Enterprise | 30 | High-touch | QBRs, Monthly check-ins |
| Team | 150 | Tech-touch | Automated + quarterly |
| Individual | 5,000 | Digital-only | In-product only |
2.2 CSM Headcount Projection
| Month | Enterprise | Team | Individual | CSMs Needed | Cost/Month |
|---|---|---|---|---|---|
| 12 | 40 | 317 | 15,831 | 2 | $25,000 |
| 18 | 151 | 1,208 | 51,990 | 5 | $62,500 |
| 24 | 387 | 3,093 | 115,991 | 10 | $125,000 |
| 36 | 1,000 | 8,000 | 250,000 | 20 | $250,000 |
| 48 | 2,000 | 15,000 | 450,000 | 35 | $437,500 |
| 60 | 3,000 | 22,000 | 636,000 | 50 | $625,000 |
2.3 Success Team Composition
| Role | Ratio | Salary | Loaded Cost |
|---|---|---|---|
| CSM (Enterprise) | 1:30 enterprise | $90,000 | $117,000 |
| CSM (Tech-touch) | 1:150 team | $75,000 | $97,500 |
| Support Engineer | 1:5000 tickets/mo | $85,000 | $110,500 |
| CS Ops/Systems | 1:10 CSMs | $95,000 | $123,500 |
| CS Manager | 1:8 CSMs | $120,000 | $156,000 |
| VP Customer Success | 1 (at scale) | $180,000 | $234,000 |
3. HEALTH SCORE FRAMEWORK
3.1 Health Score Components
| Component | Weight | Data Source | Measurement |
|---|---|---|---|
| Product Usage | 30% | Analytics | DAU/MAU ratio |
| Feature Adoption | 20% | Analytics | % features used |
| Support Sentiment | 15% | Tickets | CSAT, resolution time |
| Engagement | 15% | Product | Session depth, frequency |
| NPS/Survey | 10% | Surveys | Net Promoter Score |
| Payment Health | 10% | Billing | On-time, no issues |
3.2 Health Score Calculation
Health Score = Σ(Component Score × Weight)
Where Component Score = 0-100 normalized
Health Categories:
- Healthy (Green): 80-100
- At Risk (Yellow): 50-79
- Critical (Red): 0-49
3.3 Health Score Distribution Targets
| Category | Target % | Actual Churn Risk | CSM Action |
|---|---|---|---|
| Healthy | 70% | <5% monthly | Monitor |
| At Risk | 20% | 15-25% monthly | Proactive outreach |
| Critical | 10% | 40%+ monthly | Immediate intervention |
4. HEALTH SCORE → REVENUE CORRELATION
4.1 Churn Prediction by Health Score
| Health Score | Monthly Churn Rate | 12-Month Retention | LTV Multiplier |
|---|---|---|---|
| 90-100 | 5% | 54% | 1.5x |
| 80-89 | 10% | 28% | 1.0x |
| 70-79 | 20% | 7% | 0.6x |
| 60-69 | 30% | 1% | 0.4x |
| <60 | 50% | <1% | 0.2x |
4.2 Expansion Revenue by Health
| Health Category | Expansion Rate | Upsell Likelihood | Referral Likelihood |
|---|---|---|---|
| Healthy | 15%/quarter | 40% | 25% |
| At Risk | 2%/quarter | 10% | 5% |
| Critical | 0% | 0% | 0% |
4.3 Revenue Impact Model
Expected Revenue = Σ(Customers × Health Category × Revenue Multiplier)
Example at Month 24 (115,991 Individual customers):
- Healthy (70%): 81,194 × $15 × 1.5 = $1,826,865/mo
- At Risk (20%): 23,198 × $15 × 0.6 = $208,782/mo
- Critical (10%): 11,599 × $15 × 0.2 = $34,797/mo
Total Expected MRR from Individual: $2,070,444/mo
vs. Flat Model: 115,991 × $15 = $1,739,865/mo
Health-optimized uplift: +19%
5. EXPANSION REVENUE ATTRIBUTION
5.1 Expansion Sources
| Source | % of Expansion | Driver | CSM Influence |
|---|---|---|---|
| Seat Expansion | 50% | Team growth | Medium |
| Tier Upgrade | 30% | Value realization | High |
| Add-on Features | 15% | Product discovery | High |
| Price Increase | 5% | Contract renewal | Low |
5.2 Expansion by Tier
| Upgrade Path | Monthly Rate | Avg Increase | CSM Triggered |
|---|---|---|---|
| Individual → Team | 2% | +$235/mo | 40% |
| Team → Enterprise | 3% | +$1,050/mo | 75% |
| Enterprise Seat Add | 5% | +$65/seat | 50% |
5.3 Net Revenue Retention Projection
| Month | Starting MRR | Expansion | Churn | Ending MRR | NRR |
|---|---|---|---|---|---|
| 12 | $300,000 | $45,000 | $(60,000) | $285,000 | 95% |
| 18 | $1,000,000 | $180,000 | $(150,000) | $1,030,000 | 103% |
| 24 | $2,500,000 | $500,000 | $(350,000) | $2,650,000 | 106% |
| 36 | $6,000,000 | $1,320,000 | $(720,000) | $6,600,000 | 110% |
| 48 | $11,000,000 | $2,750,000 | $(1,100,000) | $12,650,000 | 115% |
Target NRR: >110% (indicates expansion > churn)
6. CS INVESTMENT ROI
6.1 CS Team Cost vs. Revenue Impact
| Month | CS Team Cost | Churn Prevented | Expansion Driven | Net Impact | ROI |
|---|---|---|---|---|---|
| 12 | $50,000 | $30,000 | $45,000 | +$25,000 | 1.5x |
| 24 | $150,000 | $150,000 | $200,000 | +$200,000 | 2.3x |
| 36 | $350,000 | $400,000 | $500,000 | +$550,000 | 2.6x |
| 48 | $600,000 | $800,000 | $1,000,000 | +$1,200,000 | 3.0x |
6.2 Churn Prevention Value
Value of Prevented Churn = At-Risk Customers × Save Rate × LTV
Month 24 Example:
- At-Risk Enterprise: 77 customers
- CSM Save Rate: 40%
- LTV: $13,000
- Value Saved: 77 × 0.4 × $13,000 = $400,400
6.3 Key CS Metrics
| Metric | Month 12 | Month 24 | Month 36 | Target |
|---|---|---|---|---|
| Gross Churn | 25% | 20% | 15% | <10% |
| Net Churn | 15% | 5% | -5% | <0% |
| NRR | 95% | 106% | 115% | >115% |
| CSAT | 4.0 | 4.3 | 4.5 | >4.5 |
| NPS | 30 | 45 | 55 | >50 |
| Time to Value | 7 days | 3 days | 1 day | <24 hrs |
| Support Resolution | 8 hrs | 4 hrs | 2 hrs | <1 hr |
7. IMPLEMENTATION ROADMAP
Phase 1: Foundation (Month 1-6)
- Implement health score tracking
- Set up support ticketing system
- Hire first 2 CSMs (enterprise focus)
- Create onboarding playbook
Phase 2: Scale (Month 7-12)
- Automate health score alerts
- Build tech-touch email sequences
- Expand to 5 CSMs
- Launch in-product NPS
Phase 3: Optimize (Month 13-24)
- Predictive churn modeling
- Expansion playbooks by trigger
- CS Ops hire for automation
- QBR templates and cadence
Phase 4: Mature (Month 25+)
- AI-powered health scoring
- Self-service expansion portal
- Customer community launch
- Partner success program
8. KEY FORMULAS
LTV with Health Adjustment
Adjusted LTV = Base LTV × Health Multiplier × Expansion Factor
Where:
- Base LTV = Price / Churn Rate
- Health Multiplier = 0.2 to 1.5 based on score
- Expansion Factor = 1.0 + Expected Expansion Rate
CS Capacity Planning
CSMs Needed = (Enterprise / 30) + (Team / 150) + Overhead
Overhead = 10% for management, ops, training
Support Staffing
Support FTEs = Total Monthly Tickets / Tickets per FTE / Working Days
Tickets per FTE = 50/day (blended across channels)
NRR Calculation
NRR = (Starting MRR + Expansion - Contraction - Churn) / Starting MRR × 100
Where:
- Expansion = Upgrades + Seat adds + Price increases
- Contraction = Downgrades + Seat removals
- Churn = Cancelled customers × their MRR
Document Version: 1.0
Created: February 5, 2026
Author: Hal Casteel with assistance from Claude 4.5
For: CODITECT Customer Success Planning