The Journey: #25 $2M, Ain't It

For years, we’ve been haunted by a number.

Not a retention target.

Not a CSAT score.

Not even NRR.

I’m talking about the mythical $2 million book of business per CSM.

That’s the number that’s been thrown around boardrooms and budget decks like it’s law.

VCs say it. Boards ask for it. Executives repeat it.

And suddenly every Head of CS is getting measured against it.

I remember the first time this number was handed to me.

It was my first CS leadership role, and I was told each CSM should carry $2M in ARR.

I stared at it like a Sudoku puzzle written in French.

Because I’m no math girlie, but even I could tell…

The math wasn’t mathing.

Not with the size of our team.

Not with the type of customers we had.

Not with the scope of work we were responsible for.

And certainly not with the budget I had.

So I did what many of us have had to do at some point:

I built my first CSM Capacity Model.

It wasn’t pretty. It wasn’t perfect. But it was rooted in reality.

And I’ve been fine-tuning that approach ever since, because here’s the truth:

$2M is not a strategy.

It’s not based on customer complexity, renewal motion, or account engagement needs.

It’s just a number. And most of the time, it’s the wrong one.

If you're being asked to justify team size or prove efficiency, you need a better framework.

So let me walk you through how to build a CSM Leverage Ratio & Capacity Model that actually works.

How to Build an Effective CSM Capacity Model

Here are 7 steps to build a model that won’t break your team or your budget.

1. Define the CSM Scope of Work

What does a CSM actually do in your org?

Onboarding? Renewals? Expansion? Adoption?

The model only works if you know what’s in scope.

2. Segment Your Customers

Not all customers are created equal.

Segment by firmographics, use case, ARR, complexity, product usage, or strategic value.

This helps you apply realistic time and support expectations.

3. Assign Time Estimates by Task & Segment

Break the CSM role into activities (e.g. QBRs, onboarding, support coordination)

Estimate the time each activity takes per segment per month or quarter.

4. Build the Weekly or Monthly Time Budget

Start with the average available time per CSM (subtract meetings, PTO, admin work).

What’s really left to support customers? That’s your capacity ceiling.

5. Model the Ratio

Divide available time by the estimated effort required to support each customer in each segment. This gives you a clear view of how many customers, or how much revenue, a CSM can manage.

6. Factor in Risk, Coverage, and Buffers

Leave room for escalations, churn risks, or unplanned change.

Your model should allow for cushion, not burnout.

7. Stress Test and Evolve

Run scenarios: What happens if your average deal size changes?

What if you shift onboarding to a specialist team?

Your model isn’t a one-and-done, it’s a living tool.

So No, $2M Ain’t It

Maybe your number is $1.4M.

Maybe it’s $800K.

Maybe you don’t assign books by ARR at all and instead use customer count, workload intensity, or lifecycle stage.

The right number is the one that helps your team be effective, sustainable, and scalable.

Not just… convenient for the board.

And if you're looking for a little help, I built a capacity calculator you can use to get started.