Businesses are focusing more and more on the relationship with their clients, as they are beginning to understand the importance of this matter. Because it has become clear that in order to grow a profitable firm you need to ensure your consumers remain satisfied and receive value from your products and/or services.
As a consequence, SaaS managers and leaders are now relying on customer metrics as a way of measuring consumer progress. This will allow customer success managers to better understand the impact of their interaction with the clients.
A way to measure this, if by creating and using a customer success health score. When doing so, you are faced with various metrics you can include.
In this guide, we have gathered a list of the 15 most important metrics for you to focus on.
First, it seems logical to answer the question of why we even need to calculate a customer health score for our businesses.
The answer to that question lies in the fact that all customers for a given SaaS business will go through a consumer journey. This journey will typically include the following steps: acquisition, onboarding, retention, and cross-sell/upsell.
At each stage of the consumer journey, it is very helpful to apply some kind of health score. This will give you and your team the opportunity to evaluate each customer account’s health. Based on the evaluation of each account, you are then able to determine how to engage with every single client. You can then continuously guide every customer forward in the consumer journey.
Let’s take a closer look at each of the four steps in the journey:
At the acquisition stage, you need to deliver value during the trial/demo period for new prospects. This will provide you with the chance to convert the prospect into an actual customer.
Once a prospect has become a buying consumer, you have to focus on delivering successful events during the onboarding process. This is highly important as the biggest churn occurs in the first 90 days through a consumer journey.
The next step in the journey focus on the retention of your consumers. Therefore, you need to deliver constant value to the client to prevent churn.
Finally, you have to try to create upsells and/or cross-sells by recognizing unmet needs and wants among your users. This will help grow your business and create long-term profits.
If you looking for more information about what a customer health score actually is and what you should consider when creating a health score for your company you can read our article “Customer Health Score in 2020: The Definitive Guide”.
In today’s digital world, businesses have access to much information about their consumer and their touchpoints. This data can be used when identifying metrics for your company’s customer health score.
Some of the various sources of data, which include metrics that can inform you about the health of your customer relationship are outlined below.
Once you have found the potential data sources in your company, the next step is to determine which metrics you will include in your customer health score.
There are numerous SaaS products and services on the market. Therefore, people will logically use the products and/or services which they find helpful and relevant. On the contrary, they will just ignore the products and services, which they do not like.
Consequently, it can be especially helpful to measure product usage among your customers. By doing so, your team can be alerted if there are problems with any consumer accounts that they need to deal with. This can include everything from informative and instructional resources, training, to product improvements.
When analyzing the overall customer health score it should be of high interest to understand and decide on customers’ sentiment.
While we do recognize that it can be hard to quantify something as vague as happiness and/or satisfaction, we still think it is likely.
Be aware that measuring customer sentiment might be more of a ‘gut feeling’ metric among your customer success teams. Moreover, it may also be a metric that is constantly updated and improved based on the provided feedback.
In fact, it is likely that customer sentiment metrics will be changed from day to day after each customer touchpoint. You need to look at some important factors such as:
The above-mentioned factors are all important when measuring customer sentiment. So you see why this metric can change at any given moment just like real human emotions. One of the most used customer sentiment metrics is the Net Promoter Score (NPS®). Another option could be to try the TeamSupport IBM Watson Sentiment Analysis for all B2B customer support teams.
If your customers are talking about and recommending your products and/or services to others, it is a powerful sign of a healthy customer account.
No matter if they are talking to peers or discussing your company in casual conversations, the value remains the same. If your customers are willing to talk with others about your products/services, it is a clear sign of their satisfaction and happiness with your offerings.
Advocates are essential for both your overall marketing and customer success. Hence, you should make it a goal for your team to work towards turning consumers into advocates.
The customer engagement metric is used to determine how often you communicate with a specific customer account. The communication can be everything from face to face meetings, phone calls to email correspondences.
Usually, you would define the level of engagement based on the number of days since the last communication with a buyer.
The customer relationship metric focuses on how strong your relationship is with your different consumer accounts.
A popular customer success management strategy is one called going high and wide. This strategy outlines the importance of building the right relationships with the right people. Because having the right interaction with the right clients can help, you expand your products and services.
Customer duration address how long a consumer has been with your firm. Most often, you will see a correlation between longer customer duration and a higher chance of retention.
Understanding who the main decision-maker is in every customer relationship is also important. Because knowing about that person, can tell you a great deal, about how the relationship might evolve.
For example, if the point of contact is a CEO, you will know it can be tough for them to be overruled when it is renewal time.
Furthermore, you should find out how long a person has been in a specific role. If you have a new employee as your point of contact, it might be of concern in regards to customer health as they may favor a competitor.
The actual number of users or orders for each account can usually be linked to your business revenue. This data point is therefore important to focus on.
You want to prioritize the health of a software solution with 200 seats over a firm with only 5 seats. The high number of seats will probably result in more demanding and complex needs but they are also more essential to your overall success.
Hence, always make sure you monitor when and how many orders or seats are added to an account.
As mentioned above, a lager customer account normally equals more requests. However, that is not the only important factor when focusing on actual consumer requests.
When analyzing customer health you should monitor both the hardness of the requests and the tone in which these requests are being made.
If you incorporate a customer health solution that includes sentiment analysis elements you can quickly tell if a consumer is feeling extremely sad or frustrated, allowing you to address the problem.
It is likely that many of your consumers don’t like to tell you directly just how they feel about your business.
So in order to gain useful and honest feedback you need to include additional sources into the overall customer health score. This can be everything from customer reviews on third-party listing sites to NPS (Net Promoter Score) ratings and more.
By using one or more of these data sources, you can monitor and understand how a customer truly feels about your firm.
It can be a useful metric in your health score, to look at how frequent a consumer purchases one of your products or logs into your online platform. However, as with all the metrics, you need to look at everything within a context.
Just because a person is logged into your platform every day does not necessarily mean he is using your software correct or receiving maximum value. On the other hand, if a person does not log in every day doesn’t fundamentally mean he is at risk of churning. He could be out of town or just busy with something else.
So you see how it is always smart to look at the context around the consumer behaviors before jumping to conclusions.
When you start to monitor the health of your accounts, you will also start to create
closer relationships with your consumers. As an outcome, you will begin to understand how your clients work and might also hear of any struggles they are facing at a macro level. All of this will also be important information, and in some cases, it could even be more essential than the other metrics you are using.
For example, if the metrics are proven bad outcomes for a consumer account, but you know that the customer is in the middle of a big change, you may not need to be concerned if his behavior changes for a while. There is a simple explanation.
Common sense is therefore always vital when monitoring and using a customer health score.
You should pay attention if a consumer suddenly starts to change the way he pays you. Some of the changes could, for example, be if a buyer starts to ask for more detailed invoices before they pay or if a client credit card is declined
Depending on your company, this could be an essential metric to track.
If it is possible for you to track when consumer are engaging with your marketing activities that can be useful information as well. Because whenever a client is interacting with your marketing projects such as attending events or reading newsletters, it clearly indicates that they are happy with your company.
Loyalty can be a hard metric to track and once again, this metric need to be evaluated in a context.
Because for some companies a customer who make regular purchases presents a happy and healthy customer that is enjoying your products. Yet, in other industries like tech companies, repeated purchases could show a customer is at risk as it signals inertia.
So when looking at customer health it is all about utilizing your existing data to make knowledgeable and good decisions. Once you start using a customer health score, you will be able to tailor how you track key customer health metrics. This will help your team to improve consumer communication and retention.
Using all the available technology is a great help to simplify the entire process to improve your business relationships with your consumers.