Are you currently tracking customer success KPIs? If not, you should be.
Customer success KPIs are often overlooked but essential to ensuring that your customer experience (CX) is up to par.
Measuring customer experience can provide valuable insights into the effectiveness of your offerings, the overall satisfaction of your customers, and is a critical contributor to the valuation of your business.
In this post, I’ll walk through 19 key metrics that every company should be tracking to measure customer success. Let’s get started.
What are customer success KPIs?
Customer success key performance indicators (KPIs) are measurements that help a business understand how well it is meeting the needs and exceeding the expectations of its customers. These metrics are often focused on the customer experience (CX) and can help a business identify areas for improvement and optimize the customer journey.
I’ll provide a detailed breakdown below, but common customer success metrics include:
- Customer satisfaction (CSAT)
- Net promoter score (NPS)
- Customer effort score (CES)
- Customer loyalty
- Customer retention rate
- Customer lifetime value (CLV)
Measuring customer success can help a business understand the overall health of its customer relationships and make data-driven decisions to drive growth and improve the customer experience.
Why is it important to measure CX?
Measuring customer experience (CX) is a vital aspect of any business strategy as it provides valuable insights into the customer journey and allows companies to make data-driven decisions to improve the overall customer experience.
By regularly collecting and analyzing CX data, businesses can gain a comprehensive understanding of how customers perceive and interact with their products or services, and identify areas for improvement.
Furthermore, CX data can provide insights into customer behavior, preferences, and needs, helping companies to identify new opportunities for growth and innovation. Measuring CX also helps companies to optimize their offerings and marketing strategies, giving them a competitive advantage the marketplace.
But it’s not just about standing out in the market, measuring CX also has a direct impact on a company’s revenue and bottom line. According to Forbes, 84% of companies that emphasize customer experience report an increase in revenue.
Positive CX leads to increased customer retention and lifetime value, while negative CX results in lost revenue and decreased profitability.
By continuously measuring and improving customer success efforts, businesses can increase customer satisfaction, loyalty, and ultimately drive revenue and profitability.
Customer Success Metrics
To help build you customer success strategy, let’s dig into some specific ways to measure customer experience. While these might not all be applicable to you, I’m hoping it will at least spark some ideas.
1. Customer retention rate
This measures the percentage of customers that continue to do business with you over a given period of time. A high retention rate is a good indicator that your customers are satisfied with your products or services.
This can be calculated by dividing the number of customers you retained over a given period of time by the number of customers you had at the beginning of that period.
Customer retention cost is a closely related metric you might want to look at – which measures how much it costs your company to keep existing customers.
2. Net promoter score (NPS)
This measures how likely your customers are to recommend your business to others. A high NPS is a good sign that your customers are satisfied with their experiences.
This metric asks customers how likely they are to recommend your business to others on a scale of 0-10. Customers who respond with a 9 or 10 are considered promoters, while those who respond with a 0-6 are considered detractors.
NPS is calculated by subtracting the percentage of customers who are “detractors” (unlikely to recommend your business) from the percentage who are “promoters” (likely to recommend your business). For more specifics on how to calculate, I’d recommend checking out this post from Hubspot.
3. Customer lifetime value (CLV)
This measures the total amount of money that a customer is expected to spend on your products or services over the course of their relationship with your business. A high CLV indicates that your customers are valuable and likely to continue doing business with you.
To calculate CLV, you need to estimate the average amount of money that a customer will spend on your products or services over the course of their relationship with your business, and then multiply that amount by the average length of that relationship.
If you’re interested in going deeper, I’ve created a detailed post into how to improve customer lifetime value.
4. Customer churn rate
This is the percentage of customers who stop doing business with you over a certain period of time. A low churn rate is a good indicator that your customers are satisfied and loyal.
Tracking this metric can help you understand why customers are leaving and identify ways to improve retention.
Customer churn can be calculated by dividing the number of customers who stopped doing business with you over a given period of time by the number of customers you had at the beginning of that period.
5. Average revenue per user (ARPU)
ARPU measures the average revenue generated from a single customer over a given period of time. This can help you understand how profitable your customers are and how much value they bring to your business.
A high ARPU is a good indicator of customer success, as it suggests that your customers are making valuable use of your products or services.
This can be calculated by dividing your total revenue over a given period of time by the number of customers you had during that period.
A few posts that can help you increase your ARPU:
- Creating High Ticket Offers
- Value Ladders
- Strategies to Boost Revenue
- Implementing Annual / Monthly Recurring Revenue
6. Conversion rate
Conversion rate is the percentage of website visitors who take a desired action, such as making a purchase or signing up for a newsletter. A high conversion rate can indicate a successful and effective website.
This can be calculated by dividing the number of customers who made a purchase by the total number of visitors to your website or store.
7. Customer acquisition cost (CAC)
Customer acquisition cost measures the average amount of money that you spend to acquire a new customer. A low CAC is a good indicator that your customer acquisition efforts are effective.
This can be calculated by dividing the total amount of money you spend on customer acquisition efforts (such as advertising and sales efforts) by the number of new customers you acquire.
Comparing CAC to CLV can help a business understand the profitability of their customer base.
8. Customer effort score (CES)
This measures how much effort customers have to put in to resolve issues or get what they need from your business. A lower score indicates that the process was easy and efficient, while a higher score indicates that it was more difficult or frustrating.
This can be calculated by asking customers to rate the amount of effort they had to put in to resolve an issue or get what they needed from your business on a scale of 1-10 (or using a similar method).
9. Resolution time
Tracking the time it takes your customer support team to resolve customer issues or complaints can help you identify areas for improvement in your customer service process.
A shorter time to resolution is a good indicator of efficient customer support. Resolution time can be calculated by measuring the amount of time it takes to resolve a customer inquiry or issue from the moment it is first reported.
To reduce your time to resolution, you can focus on streamlining your processes, providing easy-to-use self-service options, and investing in robust tools and systems to help your customer service team resolve issues quickly.
10. First contact resolution rate
This measures the percentage of customer inquiries or issues that are resolved on the first try. A high first contact resolution rate is a good indicator of efficient customer support.
First contact resolution rate can be calculated by dividing the number of customer inquiries or issues that were resolved on the first try by the total number of customer inquiries or issues.
11. Average handle time (AHT)
This measures the average amount of time that a customer service representative spends with a customer on a single call. A shorter AHT is a good indicator of efficient customer support.
This can be calculated by dividing the total amount of time that your customer service team spends on calls with customers by the total number of calls.
12. Self-service adoption rate
This measures the percentage of customers that use self-service options (such as a FAQ page or online chat) to resolve issues or get what they need. A high self-service adoption rate is a good indicator of customer satisfaction with these options.
This can be calculated by dividing the number of customers who use self-service options (such as a FAQ page or online chat) by the total number of customers. To increase your self-service adoption rate, you can focus on making your self-service options easy to use and accessible, and providing a wide range of helpful information and resources.
13. Customer advocacy
This measures the extent to which customers promote your business to others. A high level of customer advocacy is a good indicator of customer satisfaction.
This can be measured by tracking the number of customers who give referrals to others.
14. Customer satisfaction score
Customer satisfaction surveys ask existing customers to rate their overall satisfaction with your business, products, and services on a scale (e.g., 1-5). You can use this data to identify areas of strength and weakness and make improvements.
15. Customer health score
A customer health score (CHS) is a metric used to evaluate the overall health of a customer’s relationship with a company. It is a way to measure the likelihood that a customer will continue to do business with a company, renew their contract, or make additional purchases.
A CHS is typically calculated using a combination of data points, such as customer engagement, product usage, customer satisfaction, and revenue. The score can be represented numerically, with a higher score indicating a healthier customer relationship, or using a red, yellow, green system, where a green score indicates a healthy customer, yellow indicates a customer at risk, and red indicates a customer that needs attention.
16. Customer feedback sentiment
This is the overall sentiment of customer feedback, whether it’s positive, negative, or neutral. Analyzing sentiment can help a business understand how customers feel about their products and services.
Oftentimes, qualitative customer feedback can reveal a lot about customer experience.
This can be useful for helping to identify trends and areas for improvement in your customer service process.
17. On-time delivery rate
This is the percentage of orders that are delivered on time. A high on-time delivery rate can indicate efficient and reliable fulfillment processes.
18. Order accuracy rate
This is the percentage of orders that are fulfilled correctly, without errors or missing items. A high accuracy rate can indicate a high level of attention to detail and customer satisfaction.
19. Bounce rate
This is the percentage of visitors to a website who leave after only viewing one page. A low bounce rate can indicate that customers are finding the content on the site engaging and relevant.
Tracking and Measuring Customer Success KPIs
Once you decide on what you want to measure – it’s essential to track customer success KPIs on a regular basis. By consistently collecting data, analyzing it, and taking action as needed, you can gain a deep understanding of your customers’ needs and improve their overall experience.
To get started, you’ll need to determine the relevant KPIs for your business and set clear targets. This will help you measure success and track progress towards achieving your customer service objectives.
One way to gather valuable insights from your customers is by using customer feedback tools such as surveys, polls, and review platforms. Additionally, analytics and reporting tools can provide valuable data on your customer success KPIs, such as website traffic, conversion rates, and customer engagement.
It’s important to regularly review and analyze the data you have collected to identify trends, make data-driven decisions, and implement strategies to improve your KPIs.
Frequently Asked Questions
Let’s walk through some FAQs related to customer success.
Why is it important to track customer success KPIs?
Tracking customer success KPIs can help a business understand the overall health of its customer relationships and make data-driven decisions to drive growth and improve the customer experience.
By measuring metrics like customer satisfaction, loyalty, and retention, a business can identify areas for improvement and take action to optimize the customer journey.
How can I track customer success metrics?
There are a variety of ways to track customer success KPIs, depending on the metric. Some common methods include surveying customers, tracking customer behavior over time, and using customer service and support data.
It’s also important to establish clear goals and targets for each KPI to help guide decision-making and identify areas for improvement.
How can I use customer success KPIs to improve my business?
By tracking customer success KPIs, a business can identify areas for improvement and take action to optimize the customer experience. This might involve making changes to products or services, improving customer support processes, or implementing new marketing and sales strategies.
By continually measuring and analyzing customer success KPIs, a business can make data-driven decisions to drive growth and improve the overall customer experience.
How can I create a top notch customer success team?
Here are a few things to consider when building your team of customer success managers:
- Hire the right people: Look for individuals with strong communication skills, a customer-centric mindset, and experience in customer service or account management.
- Establish clear metrics and goals: Set clear, measurable goals for your team and track progress against them. Use data and metrics to drive decision-making and continuous improvement.
- Foster a culture of customer focus: Encourage your team members to always put the customer first and reward those who go above and beyond to deliver great service.
- Foster collaboration and cross-functional teams: Your customer success team should work closely with other departments, such as sales, product development, and marketing, to ensure a seamless customer experience.
- Empower your team: Give your team members the autonomy to make decisions and take ownership of their customers’ success.
Wrap Up
Hopefully by now I’ve made a case for why tracking customer success KPIs is so important, and provided some useful tips for how to get started.
By collecting and analyzing these customer success metrics, you can gain valuable insights into how their customers perceive their products or services and identify opportunities for your customer success teams.
Regularly measuring and analyzing your KPIs will help you understand the overall health of your customer relationships, identify areas for improvement, and make data-driven decisions to drive growth and optimize the customer experience.
Good luck!
