5 Ways to Measure Customer Success — How Do You Keep Customers Happy?

Customer success is often confused for customer service or customer support. In reality, customer success plays a much different role in the customer journey.

As organizations grow (especially those in the SaaS space), they will see the need to manage customer relationships on a much deeper level. More than just support tickets and service requests.

Think of the customer journey as a long line of events. On that line, you have the day the customer signs up, their onboarding experience, and then minor support events all along the way.

A customer success team looks at the whole line. The entire customer journey. Including customer service and support, instead of focusing on those incidents alone.

In a nutshell, it’s how you deliver continuing value and greater loyalty with your customers.

Benefits of Measuring Customer Success

There are countless benefits that come with a strong customer success program. Your customers will be happier and more loyal to your brand. In turn, this drives upsell potential and higher customer lifetime value for you.

It at least five times more to acquire a new customer than to keep an existing one. This makes the success of customers more important than ever.

We’re seeing a trend of more and more companies investing in their Customer Success Programs.

The benefits are self-explanatory.

5 ways to measure customer success

Gauging the performance of customer service and customer support is typically straightforward. In most cases, teams are measured on how many tickets they close, or how many times it takes to resolve an issue, etc.

So how do you measure the effectiveness of your customer success strategy as it relates to the entire customer journey?

There are several key metrics to use that will accurately reflect how happy your customers are. You can also understand how likely they are to remain loyal advocates for your brand.

Here are 5 sure-fire ways to measure customer success.

1. Net Promoter Score (NPS)

NPS is simply the percentage of customers who would recommend your company to their colleagues, friends or family. Generally measured by a survey.

 

NPS asks “How likely are you to recommend ______ to a friend or colleague?” and is rated on a 1-10 scale.

The overall NPS score is then measured by the percentage of promoters who gave a score of nine or ten, minus the detractors, who gave a score between zero and six.

Most modern organizations spread NPS as a performance metric across different customer-facing teams. As a reflection of overall customer satisfaction, however, NPS is a logical way to measure the efforts and effectiveness of the customer success team.

NPS is an excellent pulse-check for the overall health of the account. Since customers have the opportunity to add comments to their rating, it’s a great way to glean product feedback. The customer success teams can use this info to make requests on the customer’s behalf.

Lastly, it’s a simple way to highlight the hard work of the customer success organization as a driving force for customer advocacy and loyalty.

2. Customer Effort Score (CES)

CES, also measured through a survey, is an indicator of how hard a customer had to work to accomplish a task or use your product. A score of “one” is considered an excellent customer effort score. Anything higher indicates a problem with a process, product or support experience.

As the gatekeepers for the entire customer journey, the customer success team should be included in all of the events and milestones each customer has with your company. They are the liaisons between that customer and the rest of the organization.

For that reason, they can (and should) have a significant impact on customer effort score. The customer success team is actively advocating for customers. In addition, they should be working alongside support, service, and product teams to create a better experience.

If done right, CES decreases and customer happiness increases.

3. Upsell and Cross-sell revenue

In some organizations, the customer success team carries some type of quota and revenue target. In many cases, they are responsible for customer renewals, ensuring that renewals are reviewed and completed well in advance of the end of the contract term. 

With renewals come an opportunity to upsell the customer to an upgraded product or service. This is usually at a higher price or to cross-sell an additional product or service to fill an unmet need.

Even if the customer success team does not carry a quota, they are still a logical choice to generate leads for upselling and cross-selling opportunities.

Why?

Because they know the account more closely than anyone else in the organization. They have the deepest understanding of the customer’s goals, objectives, and pain points.

If customer success teams are consistently generating upsell revenue from their assigned accounts, it’s a great indication they are well-aligned with those customers.

4. Churn Rate – Keeping Customers Sticky

Customer churn rate is the subset of customers who choose not to renew at the end of their contract term, or who cancel a subscription without notice. It’s the part of your customer population that calls it quits with you. This could be due to product shortcomings, poor service, or a combination of different factors.

Customer success managers are often measured against churn rate for the same reason they are measured by NPS and CES. They are responsible for the customer relationship as a whole. As issues arise, they are the first line of defense in solving problems and preventing the customer from churning.

Churn rate should be examined from different angles to get an accurate measurement.

Revenue churn is the financial loss of customer turnover. It could be attributed to churn from one account or many accounts.

Total customer churn is the overall number of customers who leave.

To see the complete picture of customer success, compare both views to gauge how effectively your team is managing the customer population.

5. Product Adoption — Increasing Product Usage

Just as the name indicates, this metric shows how many customers are actually using your products. Which features they use most. And how often they are using them.

At first glance, it might not seem like a high-value metric. After all, your customers have already signed the product and paid for it–who cares if they use it, right?

Everyone should care.

If a customer spends precious money on something and they aren’t supported well enough to know how to use it, they will not renew. That customer will quickly become a detractor of your brand.

Customer success managers are responsible for helping their customers know how to best use the technology. It’s their job to help them meet their business objectives.

If product adoption rates plummet, it may be an indication that the customer success team doesn’t have the enablement tools or information they need to guide their customers.

Wrapping Up

As you begin to measure the effectiveness of your customer success team, experiment with metrics that most closely relate with your objectives.

There is no right or “cookie cutter” way to measure progress–just start.

Collecting data now will help your team improve over time to serve customers more effectively. The rest will work itself out.