📊 Top 7 Customer Success Metrics to Monitor for Business Growth
As a serial entrepreneur and investor, I have been involved in hiring over 50 different customer success managers across my portfolio of 40+ investments and my own companies. One of the most important aspects of creating a successful business is ensuring that your customers are happy and satisfied with your product or service. In this article, I will share with you the top seven customer success metrics that you can use to monitor all your accounts and make sure you don't lose or churn any accounts. These metrics will help you grow your expansion revenue and ensure that you stay on top of your numbers.
📈 Customer Churn Percentage
The first metric that you should be monitoring is customer churn percentage. This is the amount of customers that you lose over a given period of time. To calculate this metric, you simply need to look at the number of customers you had at the beginning of the month and compare it to the number of customers you have at the end of the month. This metric is also sometimes called logo churn or account churn. It is important to measure this metric and track it over time to ensure that you are retaining your customers.
💰 MRR Churn Percentage
The second metric that you should be monitoring is MRR churn percentage. This is the amount of revenue that you lose over a given period of time. To calculate this metric, you need to look at the total revenue MRR at the beginning of the month and compare it to the total revenue MRR at the end of the month. This metric is important because you have different packages, plans, upsells, and add-ons, so you want to make sure that you are measuring the total revenue that you are losing.
📉 Net MRR Churn
Net MRR churn is probably the most telling metric on revenue churn because it takes away any expansion revenue and really just looks at the revenue churn on a monthly basis. This metric is important because it allows you to see if people are sticking around with their payments and making sure they are getting ongoing value from your product.
💸 Expansion MRR Percentage
Expansion revenue is a new concept for many first-time SaaS founders. Essentially, it is the idea that if somebody starts off on a $50 plan or $500 plan, over the lifetime of that account, what additional revenue do they add on? For many SaaS companies, they have to figure out their pricing, packaging, and plans to make sure that they have a value metric and some add-on metrics. Understanding on a month-to-month basis what your expansion revenue is, especially from a customer success manager, is important because they are accountable for upsells, cross-sells, and really revenue retention.
🌟 Net Promoter Score
Net Promoter Score (NPS) is a great way to measure customer satisfaction and loyalty. It is a simple question that asks how likely a customer is to recommend your company to a friend or colleague. Scores range from 1 to 10, with 9s and 10s being promoters, 7s and 8s being neutral, and 1s to 6s being detractors. This metric is important because it tells you how satisfied your customers are with your product or service.
😃 Customer Satisfaction Score
Customer Satisfaction Score (CSAT) is another way to measure customer satisfaction. It is a quick question that asks customers to rate their satisfaction with a product or service on a scale of 1 to 5. This metric is important because it allows you to monitor and improve customer satisfaction.
🚀 Customer Experience Score
Customer Experience Score (CES) is a metric that is not talked about as much, but it is incredibly important. It measures the effort that a customer has to put in to complete a specific action, such as onboarding, activation, adding a module, or adding an integration. This metric is important because it allows you to prioritize your customer success activities and potentially your product roadmap.
📊 Conclusion
In conclusion, monitoring these seven customer success metrics is essential for the growth and success of your business. By tracking these metrics, you can ensure that you are retaining your customers, growing your expansion revenue, and improving customer satisfaction and loyalty. Remember to use these metrics to guide your decision-making and to make sure that your customer success managers are accountable for reporting and improving these metrics.
🌟 Highlights
- Customer churn percentage measures the amount of customers lost over a given period of time.
- MRR churn percentage measures the amount of revenue lost over a given period of time.
- Net MRR churn measures revenue churn on a monthly basis.
- Expansion MRR percentage measures the additional revenue added on over the lifetime of an account.
- Net Promoter Score measures customer satisfaction and loyalty.
- Customer Satisfaction Score measures customer satisfaction with a product or service.
- Customer Experience Score measures the effort that a customer has to put in to complete a specific action.
❓ FAQ
Q: What is customer churn percentage?
A: Customer churn percentage is the amount of customers that you lose over a given period of time.
Q: What is MRR churn percentage?
A: MRR churn percentage is the amount of revenue that you lose over a given period of time.
Q: What is net MRR churn?
A: Net MRR churn is the revenue churn on a monthly basis, taking away any expansion revenue.
Q: What is expansion MRR percentage?
A: Expansion MRR percentage measures the additional revenue added on over the lifetime of an account.
Q: What is Net Promoter Score?
A: Net Promoter Score measures customer satisfaction and loyalty.
Q: What is Customer Satisfaction Score?
A: Customer Satisfaction Score measures customer satisfaction with a product or service.
Q: What is Customer Experience Score?
A: Customer Experience Score measures the effort that a customer has to put in to complete a specific action.
Resources:
- [Precision Scorecard Framework](https://www.danmartell.com/precision-scorecard)
- [Never Lose a Customer Again by Joey Coleman](https://www.amazon.com/Never-Lose-Customer-Again-Experience/dp/0735220034)
- [VOC.AI AI Chatbot](https://www.voc.ai/product/ai-chatbot)
