Customer success, engagement, and retention all have formulas. Yes, math formulas! While you cannot necessarily distill an authentic customer relationship into an equation, many elements of the relationship and behaviors within it can be calculated into KPIs.
Use a CSM
The best way to keep track of your customer success metrics is to use a CSM, or customer success management tool. Learn about the different options and try out a few different ones to find the one that’s best for your business. Once you have your system set up, you can start tracking these customer success metrics! Use this in conjunction with your CRM.
While positive KPIs can be useful and should be celebrated, it’s better to focus on areas of improvement so your business can prioritize solving the problem. The monthly churn rate is calculated by dividing the number of lost customers by the number of customers at the beginning of the month, then multiplying by 100 to get the percentage. If your churn rate is high, the next steps should be finding out why and then developing a plan to improve this metric.
Customer Health Score
Your customers are the foundation of your business, so it’s important to pay attention to metrics that focus on their behaviors and likely next steps. A customer health score equation calculates how likely they are to remain a customer. There are many different ways to calculate this score. This score can help you determine which customers need some TLC and which ones are your prized customers.
Average Revenue Per Customer
Continuing to focus on customer behavior, the average revenue per customer calculation can help you determine the proportion of increased spenders to casual consumers. This figure is calculated by dividing the total revenue from customers by the number of customers.
Customer Engagement Score
Customer engagement is incredibly important and it goes both ways! Social media and email marketing offers businesses a direct line to their customer and plenty of helpful information. Calculating your business’ customer engagement score can determine how regularly your customers interact with your business. The higher the score, the more often your customers are engaging with your business and have you at top of their minds. Calculate this score by dividing the number of daily users by the number of monthly users.
Net Promoter Score
The net promoter score shows how likely your customers are to recommend your business to their network. There are a few ways to get the data for this metric, but a common way is to ask customers (via a survey or webpage popup) how likely they are to recommend your business to others on a scale from 0-10. Those who chose 9-10 are “promoters” and 0-5 are “detractors”. Subtract your percentage of detractors from your percentage of promoters to get your NPS.
A great way to find your super fans is to cross reference all of your metrics to find the customers that have high marks in all areas. Treat them like royalty! This can also be a good way to segment customers who have low engagement, and sales, and are likely to churn and spend less time focused on this group. Most of your energy should be spent somewhere in the middle, turning the average customers into super fans! Need help wading through the world of KPIs and CSMs? We’re here to help!