SaaS Customer Success COGS vs. OPEX

You’ve heard this debate in SaaS finance 10,000 times:

“Is Customer Success COGS or OpEx?”

And to be clear, it’s a great question.

But it’s also a very nuanced question.

What do I mean?

Well, on the one hand, Customer Success (CSM) plays a crucial role in delivering value, so you’d think it should always be COGS.

But it’s not that simple.

See, the distinction between COGS and OpEx comes down to:

→ Role of the CSM

→ Revenue structure

→ Stage of the company

→ How CSMs influence margins

→ Service delivery vs. expansion

…and countless other “little” factors that impact the gross margin and profitability of your business.

You absolutely need to categorize CSM expenses properly…

…but you also need to understand how CSM activities, like support vs. driving expansion, impact whether they belong in COGS or OpEx.

People love boiling this down to a simple rule —

• COGS for customer retention
• OpEx for revenue expansion

—but it’s not quite that easy.

First, figure out the function of your CSM team…

…then decide if they are truly part of your cost of delivering the product or more focused on growth and expansion.

That’s what financial clarity looks like.