Six key Customer Success Metrics and how to track them for your business
It is imperative for every business to track customer success metrics and I’d tell you why. One thing every business owner has learned is that there is hardly any downtime. As a result of continuous exchanges, it can quickly become a hassle to track your business and how well it is doing with customers. Hence the need for clearly defined customer success metrics and how you can track them for your business.
In this article, we will highlight 6 of these key customer success metrics that you can use to monitor all your business, to cut down on losses or customer churn, and most importantly, grow your revenue. Let’s get into it.
In business, investing ₦100 in a customer success manager should produce ₦500 of new revenue if you manage and monitor the right metrics. To achieve this, you require regular accountability from your Customer Success Manager (CSM) for these seven metrics. Also, to make sure they are constantly improving.
Customer Churn Rate (CCR)
Your Customer Churn Rate is a periodic review of how many customers went through your system. This period may be weekly, monthly or quarterly. This is a crucial customer success metric to track because it gives insight into the effectiveness or ineffectiveness of your product or your operations process.
It gives insight into the customer accounts that have been lost, especially for SaaS businesses. Hence, prompting process reviews where and when necessary.
Customer Churn Rate may also be referred to as your Customer Attrition Rate. And it is calculated by dividing the number of customers that the total remaining customers leave. It is vital to understand the stickiness and health of your business.
Monthly Recurring Revenue
This is the amount of money coming into your business within a set period. Most businesses prefer to track this monthly, but you can either shorten it to weekly or extend it to a quarterly review of your revenue.
This metric works best for measuring the performance of your sales team. But for SaaS businesses, it can also serve to track the ability of your customer success team to leverage customer relations to upsell and cross-sell your products and services.
To stay on top of things, you want to make sure that you measure the total revenue, MRR-wise, at the end of the previous period, and then you can use that in comparison for the end of the next period to know how much revenue you have gained or lost. This is best represented on an MRR line chart.
Expansion MRR percentage
Expansion revenue is a new concept for a lot of first-time SaaS founders. It is the idea that if somebody starts on a base plan, say ₦500 plan or ₦5000, over the lifetime of that account, tracking what additional revenue they add on.
For a lot of SaaS companies, they have to figure out a lot. Including their pricing, packaging, and plans, making sure that they have a ‘value metric’ and some ‘add-on metrics.’
Therefore, understanding your expansion revenue on a month-to-month basis is essential. Especially from your customer success manager, because they’re responsible for upsells, cross-sells, and really, revenue retention. That’s why we want to measure these metrics.
Net Promoter Score
Sometimes called ‘NPS’ or ‘growth score.’ Net Promoter Score is owned and licensed by Bain and the company that guides its usage and attrition. Many people use it, and it’s a good way for you to measure and understand how many of your customers would be willing promoters of your business.
NPS is a crucial customer success metric because it gives you one number from your customer, that number would tell you so much about your business. Not only the product experience but the customer support, the sales process, everything. It involves getting your customer to answer a simple question – “How likely are you to recommend our business to a friend or colleague, on a score of 1 to 10?”.
Note that; 9 and 10 are your promoters. One to six are your detractors. Seven to eights are your neutral. And there’s a simple math equation that I’m going to link to below in the description that tells you how to get your NPS score. Just to give you some context.
This is an incredible metric for monitoring quarterly to make sure your customer feels good about your business. But it also primes them towards recommending you to others in their network.
Customer Satisfaction Score (CSAT)
The Customer Satisfaction Score is a quick question of one to five that you ask the customer after interacting with your company. The easiest one is the service rating and reviews that are built into most customer support tools. You may decide to ask this intermittently or after every service.
Think of it like five stars and ask – “On a five-star level, how satisfied are you with your customer support experience?” One star, two stars, three-star, four-star, five-star.
As the leader in the organization, this will give you a view of the effectiveness of your support team. To allow you to monitor and improve that goal.
Customer experience score (CES)
Customer Experience Score is not very much talked about, but it’s one that I think is incredibly important. Suppose you think of a customer’s journey having multiple steps. Then you want all those to be as seamless as possible.
Your Customer Experience Score is better targeted at specific processes on your service pipeline. If you think about onboarding, activation, adding a module, adding an integration, et cetera, individual processes make a whole system. You want to monitor the experience score for those specific processes so that your customers can give you feedback on their ease of use. On a 1 to 5 rating for effort. One is a lot of effort, and five would be little effort.
Asking questions to get this feedback on effort level will let you know how to prioritize your customer success activities and, potentially, product development roadmap.
I hope that this write-up on six key customer success metrics and how to track them for your business has been insightful? Please leave a comment letting me know if there are any other metrics that I have missed. Or, if you have used any above, share your experience.
