Why Customer Success Metrics Matter
You can't track what you can't see.
Customer metrics are what give you the ability to see and understand your customers' needs and behaviors. In other words, metrics are what make 'Customer Success' not only possible but effective for the whole organization. Metrics help with three key factors:
- Identify trends
- Spot potential issues early
- Tailor strategies to better serve your clients
Anyone in the CS profession knows that trying to determine which metrics to track is like trying to determine where to start at an all-you-can-eat buffet when you're starving. There are many great metrics to choose from. Customer engagement metrics like NPS, CSAT, and Churn/Upsell Rates are great metrics that give a good window into how the customer is performing.
However, there are some metrics that aren't used as much but have a huge payoff when tracked effectively.
Let's talk about them.
{{master-customer-engagement}}
5 Underrated Customer Metrics
1. Customer Health Score
Customer Health Score (CHS) is a composite metric that takes multiple factors into account to determine the overall 'health' of a customer relationship. It's more than just an NPS or CSAT. The main factors of this metric can include things like:
- Product Usage
- Support Tickets
- Engagement Levels
An at-risk CHS can be an early warning sign of churn, giving you the opportunity to intervene before it’s too late. It also gives you an opportunity to be more proactive in your customer interactions. If you have a holistic view of their overall health, you have data you can use to when you reach out to customers so each outreach has value rather than it just a simple "check in".
2. Time to Value (TTV)
TTV is one of the most important Customer Success metrics.
Time to Value measures the amount of time it takes for a customer to realize the value of your product or service after they’ve made a purchase. The shorter the TTV, the better. Monitoring TTV can help you understand how quickly customers are achieving their goals and identify any obstacles they face along the way.
Salesloft is a great example of a company that not only accelerated time to value but also elevated customer engagement, adoption, and the overall setup experience, driving higher satisfaction and success. By implementing EverAfter's B2B customer interface, they now offer a comprehensive self-served onboarding experience, empowering customers to manage the configuration process independently. As a result, Salesloft has achieved:
- Reduced onboarding time by 10 hours
- Increased customer engagement rate to 85%
- Boosted adoption rates by 13% (and we're just getting started)
- Reduced setup time while improving setup quality
You can dive deeper into their story in this webinar!
3. Customer Effort Score (CES)
Customer Effort Score evaluates the ease with which customers can accomplish a task or resolve an issue. Lower effort scores indicate a smoother experience, which correlates with higher loyalty. By keeping an eye on CES, you can identify friction points in your customer service processes and work to eliminate them.
Companies like Gainsight, Hubspot, and Salesforce are good examples of companies that have complex, robust tools. Companies like this would greatly benefit from tracking a Customer Effort Score so they can see what main pitfalls customers have or what tools/features need extra training material. It also helps the Customer Success teams know what to focus on during client calls so they can ensure all their clients know how to get maximum value from the product.
4. Onboarding Satisfaction
This is right up there with other Customer Satisfaction metrics like CSAT and NPS.
Onboarding is the foundation of the customer journey. It's nearly impossible to have a successful customer journey without some degree of customer onboarding. Having a means by which you gather feedback specific to onboarding is a great way to gauge how your customers get their first exposure to your company as customers.
Fine-tuning the onboarding process is something many software companies find themselves doing continuously. Having an onboarding satisfaction metric makes it easier and the need to reevaluate the whole process less of a frequent occurrence.
5. Contract Renewal Rate
While renewal rate might seem like an obvious CS metric, it’s often overlooked in favor of more immediate measures like monthly recurring revenue (MRR). The Contract Renewal Rate provides the percentage of customers who renew their contracts. High renewal rates indicate strong product value and customer satisfaction.
This is a simple metric but gives any company a good look into how much value their customers experience. If customers don't see the value, they will most likely not renew.
How to Simply Track These Metrics
Tracking these metrics doesn’t have to be complex. Here are some simple ways to keep tabs on these important indicators:
Utilize Customer Success Software
CSP’s offer comprehensive tools to track a variety of customer success metrics, including the ones mentioned above. These tools often integrate with your existing CRM and other systems, providing a holistic view of your customer data.
A few of the main benefits organizations get from using a Customer Success software platform along with their CRM are as follows:
Enhanced Customer Insights
- 360-Degree View: Integrating CS software with a CRM provides a comprehensive view of customer interactions, behaviors, and feedback. This holistic perspective helps teams understand customer needs and preferences better.
- Predictive Analytics: CS platforms often include predictive analytics that can identify potential churn risks and opportunities for upselling or cross-selling, allowing proactive engagement with customers.
Improved Customer Retention
- Proactive Support: Customer Success platforms can automate and streamline support processes, ensuring timely responses to customer issues and reducing the likelihood of churn.
- Health Scores: Many CS tools offer health scoring metrics that help track customer satisfaction and engagement levels, enabling teams to intervene before problems escalate.
Streamlined Processes
- Automation: Automating routine tasks such as onboarding, follow-ups, and renewals frees up time for Customer Success Managers (CSMs) to focus on building relationships and delivering value.
- Workflow Integration: Seamless integration between CS software and CRM ensures that all customer-related activities and data are synchronized, reducing manual data entry and errors.
Recommended reading: Customer Success Platforms Alone Aren’t Enough, Here’s What You’re Missing
Regular Check-ins
Having a CS software platform makes these check-ins and meetings much more effective.
Schedule regular check-ins with your team to review these metrics. This ensures that everyone is aligned and aware of the current state of your customers. It also provides an opportunity to brainstorm solutions for any emerging issues.
These internal check-ins don't need to be lengthy. They can be solely based on specific metrics you are tracking, and the updates provided can focus on key tasks that help move the needle forward.
{{cta-demo2}}
Automate Reports
Set up automated reports to be sent to your inbox at regular intervals. This helps you stay informed without having to manually pull data. Tools like Salesforce, HubSpot, and even Google Analytics can be configured to send these reports.
Automation is a hot topic these days, with AI making its waves through the tech space. Automating customer data should be a priority for all software companies. It will make the lives of everyone involved much easier.
Recommended reading: How Customer Success Metrics Are Evolving in the Age of AI
Customer Feedback Loops
Create feedback loops with your customers to gather qualitative insights that complement your quantitative metrics. Surveys, interviews, and focus groups can provide valuable context to the numbers you’re tracking.
Verbit used EverAfter's B2B Customer Hub to automate their whole customer feedback process. Their main usecase was their RevOps team delivering feature changes for customer-specific pain points.
Read their full case study here.
Dashboard Visualization
Think of these dashboards like your window into how your customer uses and values your product or service. Dashboards are necessary to proactively manager customers. They are also necessary to track key metriocs that have to do with churn and CS retention.
Use dashboard visualization tools like Tableau or Power BI to create real-time dashboards. These visual aids help you and your team quickly interpret data and make informed decisions.
Action Steps
There are a lot of directions you can take with metric tracking. And with all the metrics to choose from, it can seem pretty overwhelming. The reality is, that thanks to all the tools we have at our disposal these days, tracking and monitoring metrics has never been easier.
Here are three action steps to consider based on what we covered in this article:
Determine What Success Looks Like to Your Customers
This should be the foundation of everything that happens within any organization. Before any metrics are determined, knowing what a successful customer looks like is imperative.
Reverse Engineer Their Success With Metrics
Now that you have your foundation in place, it's time to determine your CS metrics. consider the ones mentioned in this article and any others that will help you proactively manage your customers and lead them to success.
Put The Right Tools and Processes in Place
Having tools and internal processes in place that your team is trained and aligned on is how churn mitigation, effective renewals, and successful customers happen. Simple as that!
Conclusion
The importance of tracking CS metrics cannot be overstated. Make every customer relationship count by having a plan in place to track their success. Tracking the success of your customers is a key step to customer expansion and company growth.