As the Director of Customer Success for a software company, I am always looking for ways to improve our strategy and ensure success. One area that is essential to track is key performance indicators (KPIs). By understanding and tracking the right KPIs, you can make data-driven decisions that will help you retain customers and grow your business. Here are 5 customer success KPIs that you should be tracking:
What are Customer Success KPIs?
Analytics are a key tool in helping you to make better decisions for your business. These customer success metrics can help you make better marketing decisions, improve your customer service, and more.
The key is to understand how each data point can help you reach your business’s goals.
The customer success KPIs and metrics listed in this post will help you track your customer experiences with your software. By monitoring these indicators, you can pinpoint where customers are having difficulties and take steps to improve.
By focusing on the happiness of your customers, you’ll keep them around for longer.
Customer analytics are the key to understanding your customer’s value. By maximizing this value, you can reduce your customer attrition rate.
The Importance of Customer Success KPIs
Before diving into modern strategies for measuring the success of your customer onboarding process, it’s important to understand the benefits of doing so.
Customer success KPIs are essential to businesses because they allow you to focus on delivering value to your current users, upselling customers, and increasing your retention rate.
The shift from measuring success based on statistics and numbers to instead focusing on the customer’s perceived value is attributed to the changing demands of consumers and the advancement of new technology.
In order to stay competitive, your KPIs must change as your business evolves.
Measuring the success of your customers through KPIs allows you to adapt your business model to continue to provide value to customers and thrive as a business.
Fortunately, client success can be measured by a few KPIs. By focusing on value, you can decrease customer churn rate, increase client loyalty and satisfaction.
Why you need to choose the right Customer Success KPI for SaaS business?
As a subscription-based business, it is especially critical to ensure customer retention in order to earn more profits. Picking the right customer success KPIs is essential in making sure that your customers are satisfied with your product. By aligning customer perceived value with what you charge, you can reduce the chances of them churning.
SaaS businesses need to pick the right KPIs because they need to focus on customer retention in order to earn more profits.
Customer success is much more than just tracking your customers’ usage. It’s about making sure they’re getting the most out of the product and helping them succeed.
The right metric to track is:
1. Boost retention and customer lifetime value
Your clients are the lifeblood of your business, so it’s important to keep them happy. If they’re struggling to get value from your product, they won’t stick around for long. Make sure existing customers can achieve value from your product to keep them happy and coming back for more.
SaaS customers who are happy with your product are more likely to stay with you long-term. This not only improves customer retention, but also boosts other key metrics for the health of your business. A satisfied client base leads to less churn and a higher CLV.
If you want to keep your customers happy and coming back for more, you need to make sure they can get the help they need no matter where they are on your site. An in-app resource center andor quick support via live chat will ensure that your customers can always find the answers they’re looking for.
2. Maximize The Upselling Opportunities
If your product consistently exceeds customer expectations, you’ll have plenty of opportunities to upsell them to a higher-end version. Happy customers are more likely to be willing to pay more for an even better product, so make sure you’re providing the best possible value at all times.
Up-selling to current customers is a fantastic way to increase your product’s value.
By ensuring your customers are getting the most out of their purchase, you in turn increase the value they provide to you.
3. Increasing customer success and driving word-of-mouth
When your customers are happy, they are more likely to advocate for your product. Happy customers are loyal customers.
Happy customers are more likely to spread the word about your company, which can result in free, organic, and highly effective advertising.
10 Customer Success KPIs You Need to Track
Here are the key metrics every CS department should track:
The Churn Rate
Churn rate refers to the number of customers that leave your business. This statistic can be analyzed to discover why customers are leaving your offering.
You can calculate the cost per minute using this formula:
2. Onboarding Speed
How quickly are you getting customers to use your products? The faster the on-boarding, the more quickly they’ll start utilizing your software.
On-Boarding Speed is Important to Measure because it can Help You Determine How Quickly Your Customers are Able to See the Full Value of Your Product. By Maintaining a Checklist of Workflows that a User has to be Familiar with, you can Get a Idea of How it Takes in Training and Orientation Before the Customer is Able to see the Full Value of the Product.
3. Time to value
Time to value refers to how long it takes for a customer to start benefiting from your product.
As your software products age, it’s important to continue to reduce the time it takes to get value from them.
4. The Net Promoter Score(NPS)
The NPS is a customer loyalty measurement that gauges how likely a customer is to recommend your company to others.
To gauge your user’s likability and likelihood to recommend, you should survey them using 1-10 scales. This will provide you with your NPS which you can use to improve your product.
5. The Conversion Rate
The conversion ratio is an important number to track as it shows what percentage of people completed a desired task. This will vary based on what a company is trying to achieve, but understanding this can help a business adjust their strategy in order to increase their chances of achieving their goals.
The conversion ratio is the percentage of visitors that become paying customers.
6. Expansion MRR Rate
Your company’s expansion revenue is how much your marketing efforts bring in from new customers. This shows the success of your campaigns at growing your client base.
The expansion MRR is calculated by:
7. Product Adoption
A good way to measure customer satisfaction is by seeing if your customers adopt new products and features. A business that successfully implements new products and services is a sign that they are providing their customers with value.
Happy customers are great, but satisfied customers are even better. They will not only continue to use your products, but they will also want to make the most of all the features available to them.
8. Customer Health Score
The health score is an indicator of how clients are likely to renew their contracts. This depends on how well they’re doing, or if they’re at risk of leaving.
9 Customer Satisfaction
Happy customers who love your product are more likely to refer you to their family and friends. This metric is a great way to measure the success of your customer service.
Happy customers are more than happy to recommend brands they trust to friends and family.
10 User stickiness
This measurement tracks the amount of time that a customer spends using your product or service. The longer the customer sticks around, the more successful your offering is.
11. Customer Retention Cost (CRC)
The Customer Retention Cost (CRC) is a calculation that measures how much a business spends on retaining and cultivating customers.
The CRC is a metric that businesses use to track the cost of retaining and cultivating existing customers. Depending on the makeup of a business’s customer base, it may make more sense to track CRC per customer or average CRC per customer segment.
12. Number of Support Tickets
A drop in the amount of customer support requests is indicative of a business that is performing better than its competitors. This is because satisfied users do not have to seek help; those that do likely are not happy with the product. A rise in the support ticket count is counter-intuitive to customer satisfaction.
A sudden increase in customer support requests is counter-intuitive to the success of your customers.
13 Monthly Recurring Revenue
This amount of monthly recurring revenue is the amount that you can expect to bring in each month without investing any additional time or money into your business. This amount can help you plan for your business’s future and make decisions on your budget.
14. Renewal Rate
The renewal rate is a key metric for understanding customer behavior and predicting future trends. By tracking the rate at which customers renew their subscription to your services, you can get a better sense of whether they are likely to remain interested in your product over the long term.
15 First Contact Resolution Rate
This metric is a measure of how many support incidents were resolved on the first contact compared to the total number of support incidents.
First Contact Resolution = (total number of issues solved on first point of contact total number of cases) X100.
How to improve your Customer Success KPIs i
Once you have identified your KPIs make sure you have ways to work towards them. There are many ways you can create a customer-centric culture that will help you along the way.
Take control of your revenues
SaaS companies need to manage their revenue. You can identify expansion opportunities with customers by taking control of your revenue. You must ensure that you are able to track all important subscription KPIs, such as revenue churn or net retention.
You should always have one source for truth
Because of the possibility of bias in siloed data, scattered data can be a detriment to truth. It is important to have all data in one place, and accessible to everyone within your organization.
Monitor the health of your clients
Your Customer success teams should ensure that they constantly monitor the health of your customers. This can be difficult in a Customer Success organization that is growing. The latest customer, or the one who speaks loudest, tends to get most attention. However, this is not the right place for Customer Success Managers to spend their time. You should ensure that you have the tools to monitor your customer’s health score in real time.
Follow the lifecycle of your clients and take action.
You should be able to identify the stage of your customer lifecycle and help them in the best way you can. You can track their progress and take action when there is an opportunity to upsell or to reduce churn by creating a structured workflow to manage each phase of the customer journey.
Analyze the use of your product
People can be prone to saying one thing and doing another. Customer Success organizations need to be able to track and visualize customer usage data real-time. The insights you gain from your usage analytics can be shared to your customers to help them get more out of your product if done correctly.
Together, create value
By creating a partnership that aligns you with their business goals and works together towards them, you can ensure you deliver what they expect. It doesn’t hurt reminding them of the progress you have made together as they move forward on their customer journey and towards their business goals.
As you can see, customer success KPIs are essential to track in order to ensure the success of your business. By understanding and tracking these KPIs, you can make data-driven decisions that will help you retain customers and grow your business.