Cost of Goods Sold (COGS) – the costs associated with maintaining, customizing, implementing or training a customer.Sales & Marketing Expense – the costs associated with selling to a prospect or customer.The Y Axis are the two most common accounting cost types of Customer Success.By Department – allocating based on where Customer Success Team sits within the larger organization.By Responsibility – allocating based on the different tasks that a Customer Success Manager drives everyday (training, usage, renewals, etc.).The X Axis shows the two approaches to allocating Customer Success Costs.The above matrix will serve as the framework to understand how Customer Success is being accounted for across the industry.With that said, I was able to capture some interesting results that will be explored below As for accounting for the costs of Customer Success, Finance Departments are doing it a lot of different ways and we are still very far from aligning as an industry around standard accounting practices for Customer Success. First and foremost, the eggs were excellent. Just to let you know, I am not writing this blog post from Switzerland and thankfully, I’m not writing it from my parent’s basement either. I fall into a deep depression, lose my job and end up living back in my parents basement.We can’t come to any true consensus and I leave the room even more confused than when I started.We have a combative conversation about accounting for Customer Success Costs over bad eggs and cold coffee.One year later, I am on stage at Davos taking praise from our world leaders for making every Controller’s life easier and directly impacting GWP.I march off to the Financial Accounting Standards Board where I am welcomed with open arms and I make valuable US GAAP additions to the eXtensible Business Reporting Language (XBRL).We all come to consensus on the best method, ending with a group high-five.
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