Time for a health check-up!
If you’re running a SaaS business, you know that the growth of your company relies, more than anything else, on delivering value and growing existing customers.
“In the subscription economy, the connection between your customer’s sucess and your success is much more direct.” Ken Lownie, Customer Success Evangelist & Consultant.
Acquiring new customers is essential, but if many of them leave, your business will never grow.
In order to act proactively in taking care of your existing customer base, the first step is to assess the health of your customers.
The Customer Health Score is a global indicator that aims at answering two critical questions :
In order to answer these questions, companies use the “Customer Health Score”, a computed KPI based on multiple dimensions of customer data metrics.
The Customer Health Score helps you categorize customers into a single representation of green (healthy), yellow or red (at risk) buckets, expressing how likely your customers are to stick or to churn.
Customer Health depends on a number of factors, such as:
Beware however, that the most common mistake is to only consider customer activity.
Indeed, your customers may use your product every day without getting as much value as they could, or keep using it while trying to find a new solution.
This is why you should always consider several dimensions to create a meaningful Customer Health Score.
Some of these indicators can be computed by hand, especially for new users who tend to have more contacts with your company during the onboarding and training phases.
But as your business grow and more of your users go into the different phases of the customer lifecycle (adoption, maturity), the harder it will be!
As a result, more and more customers will end up being unscore.
That’s where a customer success tool like Salesmachine come into play to automatically compute a Customer Health Score.
The first step consists of defining your key criteria to good health and bad health for each stage of the customer journey.
Indeed, the Customer Health Score must evolve over time: different indicators matter at different stages of the customer lifecycle.
At the end of the day, your Customer Health Score is always a custom-made metric.
During the onboarding phase, your customer tends to contact you quite often in order to set up his/her account. One of the key indicators to consider can be the time since the last interaction. These interactions will help the CSM get a immediate sense of the customer health, that we call “customer pulse”, and add it to the general health score.
Another key element is the accomplishment of product milestones: account configuration, number of users invited, etc…
“The faster you can help your customers understand and extract value from your product that is in line with their business goals, the stickier and most successful they’ll be”Jeff Garner, Intercom.
Once a customer is out of the “onboarding” phase, good or bad health will depend on criteria such as:
CUSTOMER HEALTH SCORE –“MailBoom” – Email marketing service.
How to set up MailBoom Good Account Health Score at adoption stage?
Ideal conditions or recipe one needs to check out and compute for assessing the Health of an account that has been using MailBoom for the past 6 month, are:
1/ That there have more than 80% of active users;
2/ That among all account’s users at least 50% regularly use key feature A (contacts imports into MailBoom) OR key feature B (contacts exports) OR key feature C (creates newletters).
3/ That the account’s general usage is increasing – using Key KPI variation (increasing number of newsletter sent)
Once you’ve defined which criteria define for your business whether a customer is in good or bad health, the data is computed in real time, helping CSMs follow trends over time.
The Customer Health Score helps you identify signs of declines and react automatically.
Your “at risk” customers are not only the ones in the red bucket. If a customer shifts from green to yellow, it is already a sign of decline and a trigger for your to act on.
Once you’ve scored your customer into green yellow and red buckets and identified trends for each customer, you need to know how to act on it using playbooks.
Playbooks are your team’s recipes to maintain & increase your client’s happiness and subsequent retention.
Key takeway: Your playbooks are designed to help create a systematic qualitative reaction to a customer’s changing situation.
But if well done, the playbooks will actually become pro-active customer success actions. => At least, that’s how your customers should perceive it!
Most common Playbooks will be:
The Customer Health Score is also a great indicator to follow for your company’s dashboard, and even during your board meetings.
Creating alingment around the monitoring of the Customer Health Score is a very trick to increase customer centricity accross the whole company.
For instance, you can set a goal of having less than 5% of customers in the “at risk” bucket.
Having your Customer Health Score in every one’s mind will help your company focus more on providing value and taking care of current customers, rather than just acquiring new ones.
And this mindset is the key to build a performing growth engine.
Automating your customer relationship is not for everyone.
High-touch businesses with a limited number of users and a high ARPU (Average Revenue Per User) can afford to spend more time with their customers.
But for low-touch businesses with a high volume of customers and a low ARPU, automating health scoring and team’s playbooks is not an option.
To ensure retention, personalized human interactions are key. Maintaining such qualitative relationships with hundreds of customers can be a challenge. The search for efficiency & productivity has become essential to CS teams.
Automation helps them in their quest.
“One of the best methods for retention I have found is continuing to add value to after the sale. Silence is a retention killer.” Adam Toporek, Author of “Be your Customer’s Hero“.
From one-time actions to bespoke sequences, automation deployment is intrinsically built and triggered by data points and events.
Once programmed with fine and right triggers, CS automation is of considerable help – drastically improving the 2 main aspects of the CS’s life:
At the end of the day state-of-the-art automation, triggered by meaningful events, raises the level of personalization offered by the customer success actions.
Wanna see how Customer Health Scores can help your business grow? → Try it out