By Jeremy Gillespie
Knowing the health of your customers should be at the top of you priority list. The problem? There are so many metrics, it’s hard to know what really matters. In this post, I’m going to cover the top 10 metrics you should consider as you try to understand health of your customers.
The following metrics will allow you to understand the value customers are getting from your platform, and if they’re likely to renew or churn. An important note: These metrics depend on both product usage, as well as human interactions with CSMs. By using both, you can build a comprehensive health score that is more accurate than simply using product usage data alone.
1. Daily or Monthly Active Users
First, know what portion of your customers are using the product on a daily basis. For a high-level view, consider using Daily Active Users (DAU) divided by Monthly Active users (MAU).
What’s the number you should shoot for? That depends on the type of company you have. It varies greatly depending on the business. Some variables to be aware of are:
It’s important to note, what you define as ‘active’ makes or breaks this metric. If anyone logging in is considered active, this may become a vanity metric with no real value. Make sure you’re measuring a level of activity that produces value for the customer.
2. Feature Adoption
It’s great to understand if people are using your product, but we all know every feature is not created equal. Customers get more value out of some features than others. Because of this we need to define two things:
What are the high-value features?
What percentage of users are using these features?
This will show you if the features are being adopted, and if users are returning to these high-value features.
We’re not going to go into a lot of detail on NPS, since we’ve outlined it here. Just like other metrics, NPS is not THE metric to measure, it’s one of many to give you as 360 degree view of customer health.
It is important to note that adding a layer of context to NPS is a great way to gather more insights from the scores. A popular way to do this is to gather scores at different stages of the customer journey.
4. Customer Communication
This depends on the support model for your product, but knowing how frequently customers are engaging with your team is important. As customers progress across their journey, you need to make sure they’re receiving the proper level of engagement to be successful. To properly measure this, you’ll need to know the frequency of communication across email, phone, meetings or chat.
Note: More is not always better. You’ll need to find the right balance for your customers. In addition, think about implementing a sentiment score to understand if these communications are positive or negative.
5. Feedback from Customer Success
Who knows the customer health better than the people who’ve been talking to them? This is why you need to capture the feedback from your CSMs. Yes, this feedback is subjective, but it’s necessary for a comprehensive score. Typically, this score should be updated monthly or quarterly. For each score level, make sure you have clearly defined what it takes to hit that level across the team.
Note: If CSMs are measured against this score, it may lead to inaccurate scores.
6. Time To Onboard
We don’t want to say onboarding is everything, but…onboarding is everything. You should know how long it takes a typical customer to onboard and measure new customers against this. Improving onboarding is an ongoing process you’re revisiting quarterly to see where you can improve. Many companies strive to reduce the time to onboard, but that is not always a good idea. Since onboarding sets the tone for the relationship, it’s important to get the customer to see value as quickly as you can, but not rush the process.
7. Support Tickets
You should also pay attention to how many support tickets are submitted by the customer. Support tickets can be positive or negative, so make sure you’re taking this into consideration. Tickets can be for quick questions, report bugs, request training, or to provide feedback, so categorize them (if possible). As you gather data, you’ll be able to understand what the right number of ticket is for a healthy account vs. unhealthy account.
8. License Utilization Rate
If you have a product based on licenses you need to know what percentage of seats are being used. Knowing this will allow you to identify expansion opportunities, as well as customers who may not be seeing the full value because they’re not filling their seats. If you have customers who aren’t filling their licenses, the best case scenario is downsizing, and the worst case scenario is churn. It is better to understand what is happening early.
9. Budget Owner Engagement
Each of your CSMs should know who the budget owner is on each account. Keeping this relationship strong is very important for long-term retention. Make sure you’re tracking the last time you’ve engaged with key stakeholders, including the budget owner. If the relationship begins to become distant or they leave the company, this can signal a high-risk of churn. For ideas on how to develop a long-term relationship with budget owners, consider this class.
10. Late Payments
Customers paying invoices on time…we all know this doesn’t happen, but it’s still important to track. Each customer has a different reason for paying late, so it’s good to know both the reason for late payment, and which customers have outstanding invoices over 30 days past due. All customers with overdue payments should be considered at risk, until you know what’s going on.
There you have it, the top 10 customer health metrics you should be measuring. It’s important to note one last time -- for you to fully understand the health of your customers you need objective and subjective inputs. By measuring these 10 metrics you’ll have a comprehensive understanding of the health across your entire customer base.
Want to know which metrics you should be tracking? The Success League is a customer success consulting firm that helps companies build top performing customer success teams. We transform support into success by building metrics, goals, and processes that enable customer success teams to perform at their peak. For more information on consulting offerings or our leadership training program, please visit TheSuccessLeague.io