The Customer Success Health Score Guide
Think back to the last software subscription you cancelled.
What made you leave?
Maybe your team didn’t realize the full potential of the solution because of a bad onboarding experience. Perhaps there was an annoying bug or a lack of a particular feature.
Chances are, if the software vendor tracked your customer health score — intelligently — someone would’ve known these things and your churn notice would’ve been less likely.
A customer health score is a reflection of customer satisfaction. It gives customer success teams the insights needed to A) Provide great experiences and B) Prevent bad ones. These results, in turn, should directly impact customer retention.
A solid health score program will move you from the reactive to the proactive. Instead of waiting for a bad feedback form — or a churn notice — you’ll have holistic data to meet customer needs as they happen.
Before implementing a health score program, here’s what you need to know:
- What a customer health score is and how it’s used.
- Which factors go into your score.
- How to use your score to plan next steps.
What is a customer health score?
A health score is an aggregate of:
- Objective data. Login times, product usage and more.
- Sentiment. Customer or employee feedback.
As a holistic score, it represents the entire relationship between you and your customer. It’s the sum of every interaction — good, bad and indifferent.
It may have been a no-brainer for a CSM to manage five customers and to know how they felt about your service. But what about 10? Or 100?
Two-thirds of companies compete on customer experience, according to Gartner. This trend is expected to rise. After all, service and support make all the difference in highly-competitive SaaS markets.
That’s why customer success teams need specialized tools available to optimize the customer journey.
Instinct will only take you so far
Half the retention battle is understanding what makes customers tick. That’s where a data-driven customer health score comes in.
Your entire team will have the power to know when an account is at risk of canceling — perhaps even before said account knows themselves! Plus, you’ll have tools and insights to get a relationship back on track if it falls off the rails.
For some organizations, this score is represented by a literal number. For others, it may range on a color scale from green to red. (More on that later.)
Each business will have a different vision for their health scores. After all, your product is unique. So are your customers.
However, there are guiding principles to follow.
Which performance indicators should I use?
For one company, a healthy customer may be defined by product usage.
For another, Net Promoter Score and micro feedback could be more telling when it comes to likelihood of resubscribing.
To be effective, yours will need to take an array of behavioral factors into consideration. The metrics you choose should be aligned to your strategic goals.
Here are key steps to take first:
1. Define customer health
What does customer success look like to you?
If you don’t have your customer success strategy down to a science, you’ll struggle to define what your desired customer outcomes look like.
Once you have a strategy in place, you’ll start conceptualizing what a healthy account means to your team. From there, you’re positioned to start selecting key performance indicators.
2. Pick key performance indicators
By analyzing successful results, you’ll be able to gather a clear understanding of what your customer journey should look like, as well as which factors correlate to unhealthy customers.
There’s no real standard for what an effective scorecard looks like. Let’s change that!
First, separate lagging indicators from leading ones:
These are a category of KPIs that measure business performance after the fact, such as sales or retention.
Lagging indicators can be difficult and often impossible to influence directly. While they’re useful for measuring the success of your strategy, they won’t help right the ship before it sinks.
In comes leading indicators
These are observable variables that predict user behavior and emerging trends across accounts. Consider them your crystal ball into the future of customer health.
Leading KPIs include:
- Usage data
- Customer feedback
- Renewal date
- Customer support cases
Your customer success strategy may call for you to zero in on sentiment analysis. Or, if you may feel objective data is more telling.
As you begin to create your customer health score system, isolate the health signals that will help further your strategic goals. Avoid picking too many, or risk making your system overly complex.
- Does this predict renewal or churn?
- Is the factor too subjective?
- Do I need to weigh the importance of these elements differently?
Once you have KPIs isolated, you can begin to measure and interpret customer health.
3. Visualize customer health
For years, many customer success teams used a manual system to monitor account health. However, this is highly subjective, not to mention time-consuming.
Everyone on your team should be able to glimpse a profile and immediately understand where a customer’s relationship with your company stands. They should also know the why. Using a data visualization system will achieve this.
Data visualization curates insights into a user-friendly format, allowing your team to quickly identify trends and behaviors without having to dive deep into each account’s history.
By creating a story out of the quantitative data you’ve collected, your team will be able to make sense of the noise.
Each segment in your visualization model will correlate to an action that your CS team can take to improve or maintain the relationship.
There are several models you can use to contextualize data:
- Alphabetical. One drawback is the potential for overlap when customers’ scores fall too closely between letters. You might want to consider a more subjective approach based on the historic relationship.
- Color coding. Simple color coding is one of the most popular methods. You can instantly understand where things stand. Many use the “traffic light” color system: Green, yellow and red. Although intuitive, you may risk over-simplifying relationships.
- Ranking. By integrating your CRM and your health score system, you can rank all of your health scores, calling specific attention to those that fall. This will also highlight which profiles are successful, allowing you to find the most impactful drivers of satisfaction.
Using a visualization model will help your team with quick glances. However, visualization isn’t everything. Internal users also need a deeper look at the KPIs to get a full understanding.
How do I apply health scores?
Your data is only as good as the insights it generates.
Each customer segment within your visualization model should have a corresponding action plan tailored to their associated health score.
They achieved a quick time to value after onboarding and have been engaged with your company ever since. They may even be promoters based on their NPS.
Although they show no predictive indicators of churn, it’s still important to continuously maximize the value they get out of your brand. Use communications that speak to this and ensure that their account manager continues to nurture and engage them.
In a color-coded system, this customer may be average or “at-risk.” It’s important when segmenting your accounts to determine what a standard customer health profile looks like to your company. This will ensure that your team knows exactly how to respond, as an unpersonalized approach could be more damaging than not reaching out at all.
This customer may only require minor attention to get them into the healthy zone. However, it’s equally possible that they risk churn. The benefit of using a mixture of KPIs is that you’ll see exactly which factors are impacting their score. That way, you’ll know where you need to directly focus your efforts.
These customers will likely benefit from communications that offer added value, including additional learning sessions and more frequent check-ins.
As even the most successful CS teams know, customers become unhappy and leave. A team member should immediately work to create and execute a strategy unique to this account, finding ways to offer more value before they churn.
If you’re beginning to notice a trend of increased red profiles, it could be a sign that you need to look into adjusting your customer success strategy or even improving the user experience with your product or service.
Improving customer health
Unhealthy accounts can be discouraging. Whether the bottom line or a customer profile, being in the red never feels good. However, these moments also provide an opportunity to learn and improve.
As Bill Gates said, “Your most unhappy customers are your greatest source of learning.”
Addressing customer success strategy gaps
- Onboarding. This is your first opportunity to bring value to a new user. The faster they understand how your product works and what it’ll do for them, the happier they’ll be. If customers in the red zone are struggling to find value in your products, look back at your onboarding. One strategy to reduce time to value is to show exactly how your product will lead them to their business goals.
- Customer support. Feedback forms will help you correct customer support in the aftermath, but you can use health scores to be there in advance. If you’re beginning to flag decreased product usage or other signs of dissatisfaction through sentiment analysis, check in with the customer to ensure they aren’t experiencing an issue trying to use your service. You may also want to look into your options for customer success software.
- The product itself. Are more accounts sending in an increasing number of support requests all related to the same feature? This should be a red flag — an above-average amount of tickets indicates a glitch or bug. Take the time to test the issue internally to determine whether this is a wide-scale problem.
While some cases of unhealthy profiles may be related to a gap in service or support, there’s always more to the story. Another potential cause of a rising percentage of red profiles may be that you’re not targeting the right users.
Tuning your health score program
It’s essential to sell your product to customers who will get consistent value from it. Integrate your score system with your CRM. Sales, marketing and success teams will then be able to better collaborate with one another to avoid these situations.
Your health score system is a continuous work-in-progress. Every well-oiled machine, after all, will require a tune-up eventually.
As your product continues to evolve and your customer base grows, it’ll be important to adjust your system as needed to accommodate for both new and old users.
How a customer success platform can help
Using customer health scores empowers CS teams to proactively combat churn.
With a customer success platform, health score data will be actionable. Data will be tied with other metrics and your team will have clear next steps. In addition, you’ll have an easy way to communicate with customers in-app.
With an effective health score program in place, your team gets a glimpse into the future and your customers get the experiences they want.
A customer success platform provides the hub for all of this to take place.