There is a school of thought surrounding customers and what they want from a company. It’s called Customer Success. Rather than focusing on metrics like how many deals you close and how many calls you make instead focus on developing, maintaining, and strengthening relations with your customers to keep customers engaged with your brand.
With that in mind, the way we gauge the success of this new way of thinking has changed as well. Here are a few ways that you can measure your Customer Success:
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Find the Pulse of Your Customers
Are your customers getting value from your products and services? It’s important to look at the big picture. Are your customers using your products? Are they satisfied with it? And what impact is this satisfaction having on your business? Customer satisfaction is not just about customers buying products that work but about how the brand makes the customer feel.
The following are two metrics that will help you measure the pulse of your customers:
Customer Health Score
The first customer success metric is the customer health score focuses on measuring the overall happiness of your customer base. To measure this, customize a score by monitoring your revenue per product, customer growth, and business growth. How many customers do you have? Are they returning? Is your company taking on more business? All things to consider when looking into customer health.
Net Promoter Score
The second customer success metric is the Net Promoter score, this is all about referrals. How likely is it for your customers to recommend your product/service to other people? This rating is majorly impacted by sales reps and customer support reps who build relationships with customers and play a major role in their overall satisfaction. Measure this by creating a rating scale that determines the likelihood of a buying customer to recommend i.e. “On a scale of 1 to 10 how likely are you to recommend.” This could be a part of a larger feedback survey or a quick one question feedback initiative.
Keep the Customers You Have
It takes a lot more now to gain a customer’s loyalty than a good product or service. But customers are seeking relationships with brands and to purchase from a company they feel aligns with their values. Now, more than ever, it is important to nurture your customer relationships and make sure they feel heard.
The following are two metrics that will monitor your customer retention:
Customer Churn Rate
Churn rate refers to a company’s cancellation rate. It can be measured for the overall company or per rep. A lower churn rate for a rep represents the relationships they have built with their customers.
To measure this look at data within a specific timeframe. For instance, look at the number of customers you had at the beginning and then the number that canceled. Lastly, divide the number of canceled customers by your total number of existing customers and that will be your churn rate.
Customer Retention Cost
Now that you know that your customers are happy with your brand and your customer success strategies are working, make sure that you also keep an eye on the cost of those strategies. Customer Retention Costs (CRC), monitors the cost of these strategies to make sure they are cost-effective. Your CRC shows you how much you spend per customer in order to retain them.
To calculate take the total cost of your customer success strategies and compare it to your total number of customers. First, take the total cost of your expenses for your customer success strategies and divide the number by your total number of customers.
Measure Customer Revenue
Measuring revenue is one of the oldest and most consistent metrics for growth. If your company is making more money, then it must be growing. When considering Customer Success, you can apply the same manner of thinking.
The following are two metrics to measure revenue growth:
Monthly Recurring Revenue
Firstly, determine how much your customers are growing by calculating how much they are spending per month. With Monthly Recurring Revenue (MRR) you will determine how much your customers have spent on your products and services month to month which will illustrate how much they have grown as a customer while working with your business. Apply this metric over time to keep track of whether or not your customers are having success with your product.
To calculate this, multiply your total active customers by your average revenue per user.
Customer Lifetime Value
Secondly, Going one step further that the MRR is breaking down revenue potential per customer. However, with the Customer Lifetime Value (CLV) you can calculate the total revenue that you expect an individual customer to generate during their relationship with your company. The increase or decrease of this value over time can even help you determine if your customers are satisfied with your offerings or if you need to reevaluate.
You can calculate CLV by multiplying your average purchase value by the average frequency rate, then multiply that figure by your average customer lifespan.
Find Out What Your Customers Think
Customer service is no longer just about answering calls and emails. It’s about furthering your customer relationships. Customer happiness is directly affected by how issues are resolved. Customers want to feel like they are being heard and they want their issues resolved quickly.
Below are three metrics that you can employ to figure out your customer satisfaction:
First Contact Resolution Rate
Customers value their time. They want their issues solved quickly and smoothly so that they can get back to living their lives. As a result, measuring the resolution rate at first contact is a great metric for customer success.
This metric describes the number of customer support items that are resolved in the first interaction. This is the measure of a great customer support team and has also been proven to reduce churn rate. Calculate this by dividing the number of tickets closed after first contact against your total number of overall tickets.
Customer Satisfaction Score
This metric is similar to the Net Promoter Score but instead of asking if a customer is likely to refer, instead, it asks customers to rate their experience with the company. This gives your business a direct picture of how customers are feeling right after their purchases.
Like the Net Promoter Score, your Customer Satisfaction Score will require a rating scale survey to collect this feedback. Then take the data and divide the total number of positive scores (6-10) to the number of scores captured, then multiply by 100 for percentage.
Qualitative Customer Feedback
The best way to find out if a customer is satisfied is to ask them directly. Find out what they think about your product/service, what they like about your company and what they would like to see changed. A great way to achieve this is through Qualitative Customer Feedback.
This gives customers the chance to give insights on exactly how they feel about your company and its offerings and as such, builds trust between you and the customer. Customer Success Managers can also gauge how well individual reps are working with customers based on this feedback.
The best way to acquire Qualitative Customer Feedback is through surveys and questionnaires. These can be sent out after a purchase or periodically sent to your customer base. Another option for collecting feedback is holding some sort of appreciation event or customer day where your customers can come in and you can talk to them face to face.
For more information on how to keep your customer’s happy and coming back, check out this blog
Measure Your Renewals
Similar to measuring revenue, renewals are also one of the oldest and most important ways to measure both company and customer success.
If a customer renews that means that they are happy enough with your company to stick with you. If your renewal rate is high that means your product and team are effective at customer success but if the rate is low it may be time to evaluate and find out where the problem lies.
Calculate your renewal rate by dividing the number of customers who renewed by the number who were up for renewal. Then multiply by 100 for percentage.
Use these metrics to monitor whether or not your customer success is in fact succeeding. Grow your business by making sure that you nurture these relationships and keep your customers happy.
For more information on Renewing with your CRM Vendor, check out this short video!