What Your Customer Health Score Can Tell You and How to Calculate It

How healthy are your customer relationships?

Any number of factors can impact how customers feel about your brand, for better or worse. Even seemingly trivial or innocent missteps can create friction and increase the risk of customer churn.

With churn costing businesses roughly $136 billion each year, according to a 2018 CallMiner study, you can’t afford to ignore the signs of a customer relationship that’s on the rocks.

Measuring and tracking customer health scores will help you stay on top of health signals that may be trending downward. With that insight, you can make whatever course corrections are necessary to boost overall customer satisfaction.

What is a customer health score?

Customer health scores give you a status check on all of customer relationships. Scoring systems typically use a color-coded approach — green, yellow and red — to distinguish between healthy customer accounts and at-risk users.

Think of a customer health score as either a red flag that something is going wrong or an all-clear signal that your customer relationships are in good shape. It can tip you off that a dissatisfied user is about to jump ship or, in other cases, give you positive feedback on effective outreach and engagement strategies.

Customer health scores factor in a variety of metrics to give brands a clear picture of current customer satisfaction trends at both a high level and for individual users or accounts.

Bottom line: A customer health score is a barometer by which you can measure how people feel about your brand and how likely they are to stick around.

Despite the massive impact that health scoring can have on brand relationships and overall customer sentiment, many companies don’t take full advantage of this asset or don’t use it at all.

Our own webinar survey found that only 33% of customer success teams felt like they accurately measured health scores. Meanwhile, 30% said they didn’t use health scores and 37% stated that they used them, but weren’t able to fully gauge the status of customer relationships.

What goes into a customer health score?

The metrics you use to calculate a health score can depend on the industry, marketplace or business goals. For instance, a Software-as-a-Service (SaaS) company supporting an app that targets professional users in the healthcare industry is probably going to have vastly different user activity expectations compared with a consumer-facing platform.

Health scoring metrics should closely align with factors that influence retention and churn, while weeding out irrelevant customer data that might overly complicate matters and make it more difficult to accurately measure customer sentiment.

Not sure what to include in your customer health score? Here are a few must-have indicators to track:

• User activity. How often are users logging into their accounts? Have some customers stopped using your product as frequently as they had in the past? A drop-off in user activity is a sure sign that the status of the customer relationship could be in jeopardy.
• Open support tickets Have you seen an influx in technical support requests that can’t be explained by a new product launch? If so, there could be an underlying issue with your products or services. It’s just as important to take a close look at the responsiveness of your support teams. Help tickets that languish without resolution will only cause further problems with users and increase the risk of churn.
• Customer sentiment. Listen to your customers: Gathering feedback directly from your users is one of the most effective ways to measure customer satisfaction. Of the many customer sentiment metrics to track, net promoter score (NPS) is among the most important since it highlights the percentage of customers who would actually advocate for your brand.
• Feature adoption. A lot of customers only use the most basic features included with products and services, and they might miss out on helpful tools that would deliver even more value. That could be due to a lack of awareness on their part or possibly user experience issues that make it difficult to take full advantage of those offerings. Either way, low adoption rates should raise a red flag that something needs to change.

How can you improve your scoring system’s effectiveness?

Scoring customers based on objective and subjective insights is essential if you want to capture a full picture of each customer’s health score.

Objective metrics include hard data like in-app activity, login figures and adoption rates. Subjective input can cover direct customer feedback and customer success managers’ impressions of account health.

Bringing those sides together will provide a more well-rounded view of customer sentiment. It will also ensure that no health score indicator slips through the cracks.

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Want to learn more? Check out the health dashboard from UserIQ