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Customer success metrics are used to discover what kind of customer experience you are really delivering. You can position yourself as a customer-centered business and embrace a company-wide ethos of nurturing customer growth, but you still need to know if the product is having a practical, positive impact on a customer’s daily workflow.

The goal of customer success is to generate recurring revenue by creating customer lifetime value. This means constantly nurturing and educating the customer, fitting your business approach to their specific needs. And with customer success metrics, you can measure whether your efforts are working.

Customer Success Metrics Lead to Action

There are three critical areas of the customer experience that can be accurately measured using customer success metrics. Every company is different and every customer comes in with different expectations, but these broad areas cover most of the key insights into customer satisfaction:

  • Business Metrics: Measuring how engagement affects revenue.
  • Adoption Metrics: Measuring the customer’s use of the product.
  • Outcome Metrics: Measuring the customer’s product ROI.

Remember, all customer success metrics should lead to action. Gathering insight into the areas listed above should enable you to proactively engage with customers. This could mean giving more attention to accounts that are in danger of churning or it could mean finding opportunities for upsells based on high usage rates.

Let’s take a closer look at each metric.

Business Metrics

In the customer-centered approach to business, enterprises are no longer defined by sales and renewals. Instead, focus on providing a positive customer experience that will keep a customer happy in the long-term and, as a result, lead to recurring revenue.

As such, it is important to measure customer success engagements against revenue goals, including:

  • Net retention
  • Revenue or logo churn
  • Gross upsell

These goals can be further broken down into KPIs such as improving the percentage of accounts in renewal or meeting forecasted growth across specific timelines.

These metrics are fully customizable. For example, you could link metrics directly to specific campaigns in order to get timely feedback. If you are introducing a new feature, you can view how this campaign may be affecting engagement and adjust your strategy in order to facilitate upsell opportunities. Such information can be viewed across customer segments to provide insight into the success or failure of certain tactics which, in turn, guides future engagements.

Adoption Metrics

User adoption metrics give us the clearest indication of how a customer is using the product and whether they’re using it correctly. These metrics cover two broad questions:

  • Is the customer using the product regularly?
  • Is the customer getting value from the product?

The first can be addressed through simple license utilization metrics. Measure the number of active daily users in an account against the total number of licenses purchased. This same formula can be customized to track the use of specific features within the product or the amount of time spent within the product per login. These measurements can be compiled to produce an engagement score that provides an at-a-glance picture of an account’s status.

The second question can be measured through more targeted metrics, including.the rate of uptake for new and existing features following a launch campaign. Alternatively, you could monitor the rate and duration of customer escalations, track survey responses over time, or assess usage across account-type segmentation.

Outcome Metrics

Outcome metrics measure the success or value of customer experiences as a result of the product. They relate to specific results judged against expectations and are unique to each business. Using these metrics, you can determine if the customer is receiving value or if they need help, then take the appropriate action.

For example, the customer success team for an email marketing software product could analyze the volume of emails sent. These outcomes can then be measured against desired targets to establish the success of the campaign. The aggregate data can be incorporated into other metrics, such as license utilization, to create an overall customer health score.

A health score represents a final verdict on our customer success efforts, offering powerful insight into a customer’s lifetime value. With a quick glance at the account, you can know how to proactively proceed with the customer—either to prevent churn or to pursue upsell and renewal.

The Benefits of a Customer Success Platform

A quality customer success platform is the foundation of the customer-centered approach to business. It generates insight into customer behavior by distilling comprehensive customer data into easy-to-read customer scorecards and health indicators that can be viewed across segments. Use such a platform to create and monitor customizable customer goals and KPIs based on information generated from every customer engagement across all levels of the company.

Customer success platforms create high-level views across all accounts by gathering and analyzing every little bit of data about each individual customer. With this information, you can build your own unique customer success metrics based on the specific needs of your enterprise or your customers. For example, a SaaS business that offers a free trial period may wish to track conversions into paid subscriptions over time. A customer success platform makes it possible to easily track those conversion rates across customer segments to form an overall appreciation of how the “freemium” model provides ROI. The ability to customize metrics is particularly useful for outcome metrics, as these are the most tailored to a business.

In short, you need an effective customer success platform in order to identify and benefit from the customer success metrics outlined above.

The Customer Success Metrics That Matter

Every customer-centered company faces a moment of truth when they discover if their efforts are truly creating customer value. You need to be tracking customer success metrics in order to arrive at that moment. And with this information in hand, you will be prepared to take the necessary steps to either improve the situation or capitalize on your success.