Within customer success, and especially in SaaS customer success, there are several metrics and key performance indicators that you should track. The most important ones include the abandonment rate, Net Promoter Score (NPS), average revenue per customer, and so on. The Net Promoter Score (NPS) is widely considered the holy grail of customer success metrics. Successful teams use NPS to understand customer sentiment and the likelihood of abandonment.
Generally speaking, scores between 30 and 70 are considered desirable. Let's say, for example, that you sold a customer a plan with 100 users. However, only 80% of those users have logged in in the past month. It has an 80% license utilization rate.
We want license utilization to be as close to 100% as possible. If some users don't use your subscription, your customer is less likely to see the value of your product and more likely to abandon it. CSAT (customer satisfaction) is another metric you can use as an indicator of overall customer engagement and satisfaction. The CSAT can be used to measure success at different stages of the customer experience, depending on when you distribute the survey.
For example, a CSAT survey delivered directly after a purchase is useful for understanding what buyers think about the buying process. Customer health scores vary by organization, which means that how you calculate this metric will depend on the signals you identify that demonstrate customer success. In this example, you would measure your customers' health score between 30 and then average it across your entire customer base. Explore 10 important customer success KPIs and metrics for customer success teams to track.
Customer Lifetime Value (CLV) is one of the most fundamental metrics that customer success teams can measure. It predicts how much the average customer might spend on a company's products or services over the course of the relationship between the parties. The Net Promoter Score (NPS) sheds light on customer feelings toward the brand and its products or services. This measure of customer satisfaction can determine how satisfied customers are when they interact with a company.
Customers with a higher or happier score are more likely to make repeat purchases. The churn rate can measure the success of each individual representative on the customer success team. Team members who maintain positive relationships with their contacts are less likely to have high abandonment or cancellation rates. The Customer Effort Score (CES) can show how easily a customer received help from the brand or how much effort they put into solving a problem, making a purchase, or getting an answer to an inquiry.
To calculate this score, customer success teams should send a survey to customers asking them how easy it was to get the help they needed. Like NPS, CES surveys have a single question with a scale of 1 to 7, as seen in the table, where 1 means that customers strongly disagree and 7 means that they strongly agree. This metric provides information to improve customer service, and organizations with higher scores often see happier customers and an increase in other key performance indicators. After CES, customer service teams should analyze the first-contact resolution rate of customer service teams.
Customers want their problems resolved quickly, and having to wait for customer service or support teams to respond can increase friction between parties. The first-contact resolution rate is the percentage of customers whose service cases or queries were addressed during the first interaction. The higher the percentage, the more indicative it will be of a healthy relationship between the company and the customer. This metric is like the abandonment rate, but it focuses on the rate at which a company retains customers rather than the rate at which they lose them.
What's the best way to know if customers are happy? These 10 key performance indicators and customer success metrics can measure everything from potential customer loss to retention. The abandonment rate for upsells, cross-sells, and downsells is the number of users who no longer buy your product or who have unsubscribed from your SaaS offering divided by the number of users you started with. Your abandonment rate will be low if consumers successfully use your product or service. However, your abandonment rate will increase if you don't add value or if your retention strategies don't work.
If it's important to consider the loss of customers, consider that the concept of upselling is even more so. Because just looking at customer loss is in itself a defensive way of looking at your customers, while, at the same time, selling more is a more offensive position. Upselling is simply trying to sell larger packages to your customers. Cross-selling is when you can sell additional related products to your customers.
And sell at low prices? Well, that's when you want to prevent a customer from being offered a cheaper version of your product. Keeping track of these three metrics means that you have an excellent overview of the state of your current customer base. This demonstrates your ability not only to retain, but also to expand your customers. NRR calculates total revenue (including additional sales), less lost revenue.
If it's above 100%, it means you can really grow your business with your existing customer base, without adding new customers. A slight change in the NRR can, due to the combination effect, generate large numbers over a long period of time, so it's important to keep track. You can use this metric to determine if your users are healthy or at risk of losing service. A user with a high health score is a high-value repeat customer.
To stand out, you must understand customer health. Paying attention to this metric helps managers identify and mitigate risks before they intensify. You can also use customer health scores in your analytics efforts to predict future events, such as whether your users will recommend you to their family and friends. Revenue management is, for obvious reasons, a key function for any SaaS business.
The best way to identify any expansion opportunities with your customers is to take control of your revenues. Make sure you can track all important subscription KPIs, such as gross loss and net retention. As your customers move through the lifecycle, make sure you understand what phase they're in and how you can best help them. By creating structured workflows to manage all phases of the customer journey, you can measure their progress and take action whenever an opportunity for additional sales or a risk of abandonment arises.
Planhat connects all customer data, obtains practical information, and drives customer actions to manage renewals, reduce customer loss, and drive expansion. Absolute portfolio growth in terms of MRR %3D Expansions + Improvements + Renewals — Sales — Contractions — Abandonment Increase in product adoption, that is,. Users use more features and more often. Customers who successfully onboard (those who achieve true product adoption until reaching a key value milestone) won't be limited to using a feature many times.
They will use the product in its entirety and gain value from multiple features. For example, these customers won't use the CRM just to view account information. They'll use it to record meeting notes, update price sheets, upload contracts, and so on. Customers who join will soon start using the product faster, get the desired result faster, and be able to get their ROI faster.
You can measure the time needed to reach a given “milestone”, such as a customer adding 100 accounts to the CRM or updating the lead status of 500 potential customers. The Net Promoter Score, or NPS, is rapidly gaining prominence and is one of the main metrics for calculating customer loyalty. The score can range from -100 to 100, the closer you are to 100, the better. It's calculated based on the answer to a simple question: “How likely are you to recommend the product?.
The grade is usually done on a scale of 0 to 10, where 0 is the minimum and 10 is the highest. The answers are divided into 3 categories depending on the answers: Promoters: people who get a score of 9 or 10 detractors: people who score between 0 and 6.The CSAT is a metric to see how satisfied your customers are with your product. The rating is done out of 5, with 4-5 scores, which means extremely satisfied scores and a score of 1 not satisfied at all. .