12 Customer Success KPIs that Matter in 2024

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    Scaling Customer Success

    More About Customer Success KPI

    What are Customer Success Metrics and KPIs?

    Customer success KPIs help businesses track retention performance, analyze churn rates, and understand how to  utilize new growth opportunities. These metrics help adopt a proactive approach, which can help CS leaders create better data-driven strategies.

    The post-sales lifecycle is a critical aspect of customer success. Traditional metrics like customer lifetime value (CLV) and net dollar retention (NDR) have been in use for more than a decade, but you now need to be more hands-on with your analysis. We’ll review additional metrics that can help you respond faster to churn risks and actively promote customer satisfaction.

    What Are the Benefits of Customer Success KPIs?

    Use cases are multiplying. Market trends are becoming harder to predict. Businesses are scaling up (and down) faster. To make matters more tricky, customer accounts are also constantly fluctuating with changing relationship dynamics and sentiment changes. All of these factors mean that CS leaders and teams need to adopt a more data-driven (product, customer, and BI) approach to achieve sustainable growth. 

    Adopting, tracking, and optimizing the right metrics can help you:

    • Streamline and optimize onboarding processes
    • Elevate account transparency for better upselling and retention rates
    • Analyze and understand customer journeys to offer more value
    • Track customer sentiment fluctuations for better damage (churn) control
    • Improve business processes and alignment with the main goal
    • Boost productivity and make CS operations more efficient
    • Turn customers into brand advocates (mouth-of-word)

    The aforementioned benefits can be achieved by picking the right metrics for the specific business. Having too many KPIs to track can prove to be counterproductive. We have shortlisted the top 12 customer success KPIs you need to track to succeed.

    Related: Customer Success Strategy: Identifying the Blind Spots

    Top 12 Customer Success KPIs

    Over the last decade, CSMs have been trying to move the needle with traditional metrics and direct feedback collection. While still useful in many cases, the old KPIs are no longer enough to measure the fluctuations and changes in today’s dynamic SaaS space. Customer Success has evolved and so have the metrics that need to be tracked and monitored on an ongoing basis. 

    Here are 12 key metrics that need to be a part of your CS strategy today:

    1. Net Revenue Retention (NRR)

    The NRR metric allows you to calculate the total revenue (including upsells) during a predetermined period of time, minus the revenue churn that has been experienced. When this key KPI is above the 100% mark, it means that the business is healthy and is actually growing even without onboarding new customers. The NRR metric needs to be calculated carefully and as frequently as possible.

    2. Customer Churn Rate

    Also known as customer turnover, Customer Churn Rate is one of the most important CS KPIs today, as it tracks the rate of customers leaving the service. It’s calculated quite simply – Lost Customers divided by Total Customers (at the start of the relevant time period), multiplied by 100. Besides detecting churn fluctuations, CSMs also need to understand why it’s happening. If it’s the user experience, the product team should be involved as soon as possible.

    Customer Churn Rate should not be confused with Revenue Churn Rate (RCR), another important metric you should be tracking. 

    Customer success KPIs - NRR, Churn rate

    3. North Star Metric

    The North Star Metric aims to help companies align teams on a key metric that measures the delivered value as an indicator for growth. With Sales, Product, Marketing, Support, IT, and Customer Success teams all focused on their own sub-metrics and sub-goals, the North Star acts as a Single Source of Truth to align the whole company with the common goals and boost cross-department visibility.   

    A good NSM should be able to:

    • Measure Product Value – It should be able to track the moment where your customers find value in your product (a.k.a the “aha” moment)
    • Represent Product Strategy – The core of your product strategy 
    • Be a Leading Indicator of Revenue – It should become a leading business indicator for your company rather than a lagging one (like churn)

    North Star calculations vary from one company to another. For example, take Dropbox. When it was a growing company, the North Star Metric was monthly active users. But now that the company has grown, the NSM revolves around paid accounts, rather than Freemium ones.

    Courtesy of Grow with Ward

    4. Relationship Score

    A relatively new arrival on the scene, the Customer Relationship Score has become an essential part of CS strategies, especially when it comes to big and strategic accounts. The relationship score helps companies identify relationship-based risks and opportunities, taking into account multiple stakeholder relationships engaging with your company.

    First you identify and map the relationships between your CS team and the customer stakeholders Then, you  rate how strong your relationship with each  stakeholder is. As human estimations can be biased, you ideally want to use a Relationship Intelligence solution to provide unbiased feedback. 

    Creating strong relationships with key influential stakeholders will not only help you retain more customers, but will also boost your upselling and cross-selling efforts. These relationships also create strong brand advocates.

    5. Customer Health Score (CHS)

    Customer Health Score helps determine the likelihood of retaining customers by measuring their current level of engagement. This churn management KPI can be calculated in many ways with a varying number of parameters. Most CSMs factor in indicators like product usage, relationship strength, unresolved tickets, and other subjective metrics to calculate their CHS. 

    For example, it’s common to see the CHS being calculated with the time users spend on using the product and the adoption rate or how many features are actually being used, along with the amount of active users in the specific account.

    Related: 5 SaaS Customer Success Pro Tips

    6. Net Promoter Score (NPS)

    NPS evaluates how satisfied customers are, and also helps you understand their loyalty levels. These scores are determined via surveys, where participants also explain their scoring (usually -100 to 100). This helps businesses determine where they stand with their customers and detect underlying issues.

    A common question asked in NPS surveys is “how likely are you to recommend our offering on a scale of 1-10”. Customers answering 0-6 are classified as “detractors”, while scores of 9-10 are your “promoters”. 7-8 raters are considered “passive”.

    7. Customer Sentiment Score

    Customer sentiment is a dynamic and fluid notion that involves the actual experience (the opinion), along with an emotion prompted judgment (the predilection). Accurately tracking customer sentiment helps you track customer trends to create an up-to-date CS strategy. It also helps connect their sentiment to the product in real-time and understand what’s triggering the changes. 

    As you can imagine, calculating sentiment is not easy. There’s no real formula to calculate this metric and every customer success system has its own proprietary formula. An accurate customer sentiment score has to be calculated with human signals, product engagement data and unbiased insights from the various communication channels – emails, support tickets, chats, video calls, social media, and more.

    8. Customer Effort Score

    Customer Effort Score (CES) is a critical metric for gaining insights into the customer’s journey and experience. It measures the amount of effort a customer has to exert to get an issue resolved, a request fulfilled, or a product purchased. Essentially, it is a direct reflection of how easily customers can interact with your business.

    The rationale behind tracking CES is quite simple: the easier it is for customers to do business with you, the happier they are likely to be. High effort experiences are a predictor of customer churn; conversely, low effort experiences can lead to increased customer loyalty and advocacy.

    To calculate CES, customers are asked to rate the ease of their experience on a scale. The lower the score, the higher the customer effort. Consistently low CES can indicate systemic issues that need to be addressed to improve the overall customer experience.

    9. First Contact Resolution Rate

    First Contact Resolution Rate (FCR) is another important customer success KPI. It measures the percentage of customer queries that are resolved in the first interaction, without the need for follow-up. This metric is crucial as it directly impacts customer satisfaction and operational efficiency.

    A high FCR rate means that customers get their issues resolved quickly, which can lead to higher customer satisfaction. It also means that your customer support team is efficient and effective. On the other hand, a low FCR rate can indicate that your support team may need additional training or resources.

    It’s worth noting that while improving FCR is beneficial, it shouldn’t come at the expense of quality service. Customer interactions should never feel rushed; instead, the focus should be on resolving issues thoroughly and efficiently.

    10. Customer Satisfaction Score

    Customer Satisfaction Score (CSAT) is perhaps one of the most well-known customer success KPIs. It measures a customer’s satisfaction with a specific interaction or overall experience with a company.

    The CSAT score is usually measured using a simple survey question such as “how satisfied were you with your experience?” Responses are typically given on a scale, with higher scores indicating greater customer satisfaction.

    While this metric can provide valuable insights, it’s important to remember that it’s a snapshot in time. Therefore, it may not fully reflect the overall customer relationship or potential future behavior. However, tracking CSAT over time can help identify trends and provide a better understanding of how your customers perceive their experiences with your company.

    11. Monthly Recurring Revenue

    Monthly Recurring Revenue (MRR) is a vital financial metric for any subscription-based business. It measures the total predictable revenue that a company can expect on a monthly basis.

    MRR offers a clear picture of a company’s growth and stability. A steadily increasing MRR indicates that the company is acquiring new customers or retaining existing ones, while a declining MRR may signal customer churn.

    In the context of customer success, MRR can also indicate how successful a company is at upselling or cross-selling. By tracking this metric alongside customer success efforts, businesses can see how their customer success strategies are impacting their financial performance.

    12. Customer Lifetime Value

    Lastly, Customer Lifetime Value (CLTV) is a prediction of the net profit attributed to the entire future relationship with a customer. In essence, it represents the total amount of money a customer is expected to spend in your business, or on your products, during their lifetime.

    This metric is crucial for understanding how much revenue your company can expect to generate from a customer over a long-term relationship. It also helps in making informed decisions about customer acquisition, retention, and marketing spend.

    A high CLTV is indicative of a healthy customer relationship, while a low CLTV can signal issues with customer satisfaction or retention. By tracking CLTV, businesses can identify opportunities to increase value for their customers, thereby enhancing their own profitability.

    Numbers Don’t Tell the Whole Story

    Establishing and tracking KPIs is great, but they simply cannot tell the whole story due to the dynamic and unpredictable nature of modern business. You need to understand and break down the relationships, hierarchies, and dependencies in your key accounts to get real visibility into the risks and opportunities. Besides that, here are two factors you need to consider while devising your CS strategy.

    • Expansion is the New Customer Success KPI – Gone are the days of minimizing churn rates and signing off. No CSM today can be satisfied without creating a serious uptick in upselling and cross-selling metrics.
    • KPIs Can Vary From One Use Case to Another – Target audiences are becoming more and more diversified today. With the rise of Product-Led Growth, the boundary between B2B and B2C is also vanishing. This means that you can have users from different sectors with different needs where the same KPIs can paint completely different pictures. 

    Summing it Up

    The modern Customer Success Manager has to strike the balance between customer satisfaction and elevated business revenue. Unfortunately, every customer is different and sticking solely to Customer Success KPIs can turn out to be counterproductive. This is why understanding relationships and hierarchies in key accounts is key.

    With Staircase’s AI-driven Customer Relationship Intelligence solution, you can get deep insights on customer relationships on the go, monitor sentiment and engagement trends, and create actionable insights that just dry metrics simply can’t give you anymore.

    Frequently Asked Questions

    How will Relationship Scoring help me?

    Relationship scoring is a unique CS metric that helps uncover NRR blind spots by providing bi-directional visibility into teams and customers. You can track stakeholder changes, churn risks, and sentiment trends for a proactive approach. 

    How can I boost my NRR?

    Besides tracking relationships and performing sentiment analysis in real-time, you can boost your NRR with good in-app/in-service communications, which should get you actionable customer insights and help you get rid of account blind spots. 

    Is One Metric That Matters (OMTM) the same as North Star Metric?

    While both seem the same, they are quite different. The OMTM is more of a short term goal (few months at a time) that specific teams adopt to achieve quick wins. The North Star Metric is more of a long-term company-wide pointer. 

    How can the Customer Sentiment Score help my business?

    Besides the obvious churn reduction, risk flagging, and improved retention rates, you can target neutral customers and turn them into advocates. This helps improve brand performance and organic growth in your specific industry. 

    What is eNPS?

    With more and more businesses scaling up fast, there’s a huge influx of in-house and remote pros. Employee New Promoter Scores help determine employee sentiment and understand how like they are to recommend your business as a workplace.

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