Planning for Customer Success - Metrics

One of the first questions that always comes up at a gathering of customer success leaders is “What are YOUR metrics?” I think this question surfaces because there often aren’t clear metrics for success.  They are too detailed, too few, too poorly defined, or nonexistent.  Newer organizations are trying to get their arms around which metrics their fledgling success team should be responsible for.  In this post I’m going to discuss how to get to a clear set of metrics for your team.  My next post will cover how to translate those metrics into goals.

What Does Success Mean To Your Company?

Before you can really plan out success metrics, you need to have a few meetings to get to the heart of what your company means when they say “Customer Success”.  Schedule time with your CEO, CFO and other key leaders in your organization and tackle the following questions:

What is the experience you want customers to have? Automated and simple?  High touch and exclusive? Drill down until you have a clear understanding of the desired customer experience.

What functions should the success team be tackling?  This varies wildly, so it’s worth asking.  Customer success teams can include account managers, implementation specialists, support engineers and operations people. CSM means different things to different people, so get clarity.

What tells you the success team is doing a good job?  Other leaders in your company may have something specific in mind like regular feature request reports or a certain customer satisfaction score.  Uncover the expectations.

Which Finance Metrics Are You Responsible For?

As a customer success leader, you need to make friends with the head of your finance team! It is important to have a conversation about the metrics you own vs. the metrics you influence.  Typically metrics that fall into the realm of success include:

  • Churn or Retention
  • Expansion Revenue
  • Professional Services
  • Referral Revenue

When you find out what you own, that’s the basis for planning your goals.  Get a month-by-month breakdown from finance and ask them to let you know if things change.  Also, make sure you’re involved in building the business plan going forward.

Build A Metrics Plan

Here’s where you get really friendly with Excel. Take all the great things you just learned, and pop them into a spreadsheet. Not a fan of spreadsheets? Customer success is the most metrics-oriented department, aside from finance, in any given company. Learn to love spreadsheets ( has great tutorials).  Two things to think about:

Structure – if the result of your conversations with the finance team was a spreadsheet, don’t fix what isn’t broken.  Cut out the stuff that isn’t yours, but otherwise use the structure they gave you.  Otherwise, list months across the top and success metrics line items in the first column (plan over actual). 

Level of Detail – think about metrics (numbers you need to report on) vs. goals (what you to manage your team to).  Build your plan around metrics (churn rate, expansion revenue); goals will come out of metrics (call customers 2x per month, sell 10 upgrades per quarter). Your plan should be at the metrics level.

Once you have your thoughts in spreadsheet format, make sure you review it with everyone you met with.  Does this capture their expectations?  Do they see any issues? Does your plan mesh with the overall business plan? Make sure everyone is aligned.

What If Metrics Don’t Match Reality?

If you’re inheriting a metrics plan you didn’t help to build, this is almost guaranteed to be the case.  Here’s your game plan:

Build a Realistic Plan – take the current plan and create a version that reflects reality.  Don’t just point out the problem; offer a solution by creating an alternative plan.  This needs to be based on recent history and real data because your next step is to…

Review with Finance – take your realistic plan to the finance team and show them where your plan differs from theirs. If your approach is “we all want this to be accurate” they should be supportive of you taking this to…

Review with Leadership – the entire leadership team needs to be made aware of potential issues with the business plan.  With the support of finance, you should be able to guide the leadership team toward an understanding of your company’s customer success reality. And then…

Get Involved in Planning – next year’s success metrics should be built by you.  By bringing to light metrics that weren’t properly planned out, but offering a better alternative, you’ve positioned yourself as a metrics-oriented leader in your company.

Have a customer success metrics challenge?  Share it with The League!