#76: 3 Incentives To Drive Growth in 2025

Let me tell you a story about incentives gone wrong...

Early in my career, I worked with a CS team that was compensated purely on the churn rate.

These CSMs became really good at keeping customers.

How?

• by never challenging them
• by giving them whatever they wanted for free
• by offering insane discounts to retain their contract 

The customers stayed, but the business plateaued. Eventually, those "stable" customers started leaving anyway because they weren't getting enough value.

A classic case of "you get what you measure".

This got me thinking about something Fred Kofman wrote about in "Conscious Business" (if you haven't read it, add it to your list!). He talks about how optimizing individual parts of a system doesn't always make the whole system better.

It's a pretty eye-opening concept.

For example: If you try to make a car go faster by only focusing on the engine while ignoring the transmission, brakes, and steering. Sure, you might get more horsepower, but good luck making it around the first corner! 

So how do we create CS incentives that work? That drive growth without sacrificing long-term success?

Last year I wrote a guide on how to Build The Ultimate CSM Incentive Program but as we're all knees deep in 2025 prep, I thought it would be great to share three incentive ideas that can help you achieve your business goals next year.

1. "Make It Stick" Bonus

Here's the thing about feature adoption — it's not just about getting customers to click buttons. It's about making your product indispensable to their daily work.

While adoption on its own doesn't drive value, without adoption customers can't unlock value.

I wrote about the sequencing of success in the 5 Laws To Drive Exceptional Results, and adoption is step #2!

Here's an incentive idea to drive adoption...

Define an incentive amount and split it into 2 buckets:

• 50% for getting customers to that "aha moment" quickly (Measured by Activation)
• 50% for getting customers to adopt core features of their use case (Measured by Usage)

The secret sauce?

Add a 1.5x multiplier if you hit both.

Because when these two things come together, magic happens! ✨

Watch out for CSMs just asking customers to hit specific buttons to "activate".

2. "Retention Focus" Bonus

You know what's worse than not growing? Shrinking.

But here's the catch — by the time a customer tells you they're leaving, it's usually too late.

My best CSMs are brilliant at spotting troubled customers months before they show any obvious signs of churning. How? Obsessively tracking their usage, value and engagement patterns and always having their ear to the ground.

Why not build an incentive program around this superpower?

For this one, you'll need to have an alert system to identify risks. Learn how to build one here. 

Define a bonus amount or % and split into 2 buckets:

• 25% of the bonus is paid on having a low % of their portfolio with risk alerts
• 75% of the bonus is paid on timely risk alert resolution

This way CSMs are incentivised to proactively work on risk signs, and your most proactive CSMs get money in their pockets! ✨

Watch out for CSMs marking issues as resolved when they are still in progress.

3. "Growth Accelerator" Variable

Hot take: CSMs are actually better positioned to drive expansion revenue than AEs. 

Hundreds of CS professionals agree with me.

Why?

Because they know exactly how and when customers could benefit from additional features or capacity. They just need the right motivation to act on this knowledge.

Here's how you can incentivise growth:

• Pay a % of all closed CSQLs to CSMs
• Pay a variable incentive on the expansion rate of a CSM's BOB

And we made it progressive — the more you expand, the higher your commission rate.

Kind of like a video game where you level up! 🎮

Watch out for CSMs creating CSQLs for deals other teams have sourced.

But Wait... There's a Catch

No incentive system is perfect (thanks Kofman for the maths on this!)

You need to watch out for:

• Short-term thinking crushing long-term success
• CSMs gaming the metrics (we've all seen it happen)
• Teams working against each other (Sales vs CS turf wars, anyone?) 

That's why you should review these incentives quarterly and ask yourself:

• Is this driving the intended value?
• Are teams working together or fighting over it?
• Are we building sustainable growth or just sugar-rush metrics?

The Bottom Line

Creating the right CS incentives is like cooking a great meal — you need the right ingredients in the right proportions. Too much of anything throws off the whole dish.

Steal these three ideas, but don't be afraid to adjust the seasoning for your team's taste.

And always remember: what gets measured gets done, but not everything that matters can be measured.

See you next Friday! ✌️