As a customer success leader, you and your team spend plenty of time tracking, analyzing, and improving customer health. However, have you stopped to do the same for your customer success department? It’s common for sales teams to have their performance monitored, but it may be time to do the same for your customer success managers.
The five metrics below are just a few of the metrics to consider when measuring the effectiveness of your team and your strategy; they can help you uncover individual customer success manager’s hidden superpowers, shape 1:1 meetings, and prioritize continual training.
Churn rate by CSM and in total
How could we start with anything but churn? For many companies, customer churn is the ultimate measure of success, and subsequently, the success team. Start by looking at the customer churn rate (CCR) or revenue churn rate (RCR) for the entire organization, then identify the churn rates of accounts assigned to each of your customer success managers.
From here, you can determine if any team members have churn rates that vary greatly from the company average in either direction. By analyzing each individual’s churn rate, you may also identify outliers that skew the company average. Those team members whose books have a higher churn rate could certainly benefit from trainings, techniques, and best practices from those who have lower individual churn rates.
Keep in mind that churn is a symptom and can’t only be attributed to the techniques of the individual CSM. Remember to keep this metric (and all of the metrics we mention here) in context with other data points as well as an anecdotal understanding of the account.
NPS and/or CSAT by CSM and in total
Customer feedback is yet another critical metric that should be shared across teams. Measuring user sentiment can tell you a few things (albeit indirectly) about each CSM, as well as your customer success strategy as a whole.
NPS and CSAT models aren’t designed to identify issues with individuals at the company, but when considered in context with other metrics, they can provide some indication of how a CSM might be performing, what workflows they use, how they run their cadences, etc.
Poor average NPS or CSAT scores associated with accounts owned by a particular customer success manager can point to issues during onboarding or with ongoing support. One thing we do at UserIQ is deliver a post-onboarding survey to ask newly-onboarded users to ask them how they would rate their assigned CSM. This helps our CS leader understand, from the voice of the customer, where there may be issues or gaps. (Keep reading down to the “Onboarding Rating” section below for more on this.)
On the flip side, a CSM with a high associated promoter score may have a different strategy or workflow that would be useful to share with others on the team. Look for patterns between newer and more seasoned CSMs and compare how they work and apply the standard strategy. Measuring customer sentiment scores for each CSM is also a great time to check on their strategy for reaching out to NPS detractors, passives, and promoters.
Revenue Retention Rate by CSM and in total
Your revenue retention rate is similar to churn, but with more context. Instead of just looking at the number of users leaving your service each month, revenue retention rate considers the financial impact of these users.
Investigating the revenue retention rate by CSM can help you identify who may be better suited to work with different user segments. Comparing each CSM’s churn rate with their revenue retention rate gives insight into the type of customers that are slipping away. For example, someone with a low churn rate but a low revenue retention rate may be having a hard time retaining users on higher-paying plans (and this might indicate a need to assign certain payment tiers to certain CSMs).
Comparing churn rate and revenue retention rate for your team as a whole may also identify gaps in your strategy or product.
Expansion revenue by CSM and in total
Expansion revenue lives on the opposite end of the spectrum as churn, and it’s a goal for Customer Success teams to strive for. After all, this means users are growing within the product and increasing revenue.
Like all metrics, expansion revenue is important to track over time. Ideally, expansion revenue per CSM and the team in total would increase over time. Red flags for this metric include a sudden steep decline in expansion revenue overall or a CSM that consistently falls behind team averages. If you find that a team member has far less average expansion revenue, it could be useful to make sure they’re adhering to the strategy of the team.
You can find calculations for the previous four metrics (plus quite a few more) here, but the Onboarding Rating is unique. While metrics such as NPS and churn rates help piece together the puzzle of onboarding and CSM effectiveness, the Onboarding Rating is direct and specific. At the end of onboarding, each UserIQ user receives a survey about their onboarding experience with their particular CSM.
Comparing this metric between each Customer Success Manager over time can help you quantify the relationship-building and management skills for each team member.
Self-analysis and performance tracking can be intimidating, but it doesn’t have to be a negative experience. It’s essential to establish a culture of support and improvement to make sure the experience is rewarding for the team and for each member. The five metrics we covered today should be used to inspire productive change.
Want to learn more about being and hiring the best Customer Success team around? Check out our on-demand webinars From the Experts: Climbing the Ranks in Customer Success and The Good, The Bad, and The Ugly of Scaling Your Customer Success Team to get firsthand perspectives from experiences fellow customer success leaders.