Customer success is a crucial KPI for any business looking to grow. For those too small to measure their customer success through stock growth, more conventional methods should be used.
Customer success is a broad topic with specific and profound implications to each business. Before discussing the techniques and tools you can use to measure success, let’s first define what it is. As defined by Lincoln Murphy, client success is achieved when a customer gets the desired outcome after transacting with your business. Desired outcomes are basically what your customers plan to do with your product/service mixed with a positive user experience. It’s important to keep in mind that success isn’t merely limited to one corner of the business, but rather it refers to all interactions with different business departments including marketing, sales, and engineering.
Now that you have a clearer understanding of client success, let’s tackle how you can measure it:
Look at the Big Picture
If your customers are leaving you faster than your sales team can generate new accounts, you are not achieving customer success. If you had one KPI to measure and improve, it is the churn rate. Unfortunately, it can be confusing to measure churn rate as there are different ways to do it, from revenue churn to employee churn.
Define Objectives
Establishing objectives is important as it creates a yardstick with which you can measure your progress. Without objectives, you can’t tell whether or not your actions are creating the desired outcomes. You’ll need to decide how to manage each segment. As much as it hurts your customer retention rate, you’ll need to cut bad-fit customers immediately or at least convert them into low-maintenance accounts. You can do so by recommending they switch to another product/service that better fits their needs. Customers identified as a best fit for your business, on the other hand, must receive the full package service that results in true client success.
Track Portfolio Growth
The simplest and most popular way of measuring customer success is through your portfolio growth rate. Regardless of how you approach the subject, every founder needs to justify every dollar investment as an X dollar amount of growth. If growth within your existing customer base was at X percent, you want to see an increased growth rate within at least three months of making the investment itself.
Expedite the Onboarding Process
The faster you familiarize your customers to your product/service offerings, the faster they start using the product and, ultimately, the faster they achieve the desired outcome and the ROI they expect. You can measure the time needed to reach specific goals or milestones, like a client ordering for the Nth time or the number of clients successfully onboarded each week or month.
Count Support Tickets
A high number of support tickets can suggest that your onboarding process is ineffective and that your success rate is low. Successfully onboarded users understand your product or service better and won’t frequently require continuous support. A lower number of support tickets signals that your customer experience is effective and is doing its job. That being said, it could also suggest that your customers aren’t using the product/service enough, in which case your business might be suffering from a low product adoption rate.
Measure Product Adoption
What this key performance indicator means is that customers are using your product/service more frequently and/or they are using more features and accessing more of its components. Customers who are successfully onboarded tend to use the product as a whole, rather than just one feature multiple times.
Measure the Net Revenue Retention
Also abbreviated NRR, the Net Revenue Rate measures the revenue that your business keeps within a specific time frame. The metric includes renewals, retention, expansion, give or take a few other segments. As long as your board members or stakeholders are on the same page, then that is all that matters.
Final Thoughts
There are dozens of KPIs out there that can measure your customer base’s success rate. Aside from the seven aforementioned metrics, you can also use customer calls and email messages sent to see how well your customer experience is being received by your target audience. By measuring success of your whole customer experience, you can tailor your sales and marketing approach as well as your product/service offerings to align with what your target market needs.