Despite customer success seeming easy to track, do you know exactly what you should be measuring to find out if your customer success programme is actually working?
a. Tracking the following factors can help you identify if your customer success programme is working well:
1. Churn Rate
The number of your customers who have stopped buying your products/using your service, divided by your initial number of customers.
Eg. A retail store has 500 customers at the beginning of April and loses 20 by the end of that month. 20/500 = 0.04, therefore, the company’s monthly churn rate is 4%.
A lower churn rate indicates satisfied customers whilst a higher churn rate may indicate that you’re not providing the value your customers expect.
An acceptable churn rate is around 0.5% per month and 6% per year.
2. Customer Growth
Is your business bringing success to your customers? Although hard to determine, asking your customers questions and getting insight around you can help you identify if your business is having a good impact on your customers.
3. Customer Engagement
People may be going in and out of your business and visiting your website, but are they actually using your products?
One of the easiest ways to find out is through your customer success team and how many calls they receive in regard to products.
Customer engagement can be increased by ensuring your customers are educated on how to use your products and services and make the best out of them.
4. Average Revenue Per Customer
Every company has customers who spend plenty, and others who spend less. You should know how much your average daily earning is per customer. To get the result, divide your daily total by the number of customers you had that day. If your average falls on the high side, that is a good indication.
Revenue should be calculated and compared to detect changes, stability and identify if you’re achieving customer success.
5. Net Promoter Score (NPS)
Using NPS provides you insight into the value you’re delivering to your customers.
Ask your customers how likely they would on a scale from 1-10 recommend your business to a friend. Responses 9-10 are “promoters”, 7-8 are “passives”, and below that are “detractors”.
E.g. From a survey of 100 participants, 40/100 choose 9-10. 45/100 choose 7-8, and 15/100 choose below that. This indicates that 40% are promoters, 45% passive and 15% are detractors. Our Net Promoter Score for this example is 25.
The higher your NPS score, the better. You can raise your NPS by providing value to your customers and appreciating those who promote and refer your business to others.
6. Trial-To-Paid Conversion
Free trials are given for customers to get a glimpse of full versions. How many people given trials actually sign up for the full and paid version? This excludes customers who subscribe without a free trial.
It is the role of the customer success team to get people to transition from trial to paid memberships by demonstrating the value of the company’s product or service.
Measuring customer success requires several metrics, but that should not allow you to sway from your ultimate purpose: your customers. Customer success may be implemented to improve revenue, but let’s not forget that the revenue comes from our customers whose needs should be met with satisfaction.