Customer success initiatives are critical in ensuring your product gives customers the positive outcomes they’re looking for. But how can you tell if your customer success team’s hard work is paying off? One way is to use key performance indicators (KPIs) to make an abstract concept, like customer success, quantifiable.
There are many different KPIs, and each evaluates progress toward goal completion from a different angle. So, let’s take an in-depth look at the KPIs that can help you measure the efficacy of customer success initiatives and how you can leverage them to provide a better customer experience.
Choose Customer Success KPIs Tailored to Your Customers
The KPIs you should track depend on your unique business and your specific customers. So, start by considering the business model of your customers. The customer success strategies and KPIs you use should be tailored to measure milestones outlined by your customers’ exact business plans. You’ll also need to use different metrics for each stage of the customer journey, including different KPIs for onboarding, escalation, adoption, and renewal.
Next, look at your customers’ goals. What are they trying to achieve with your product? What features and functionalities matter most to them? Whatever your customers’ vision of success may be, define it early and as clearly as possible. Then, select KPIs that will indicate when customers have achieved those goals. You’ll also need to plan the tactics you will use to reach your goal. Be as specific as possible; remember, the goal here is to provide personalized service.
Once you feel confident that you understand your customers and their goals, it’s time to select the KPIs that will most effectively measure their progress. Make sure every member of the customer success team understands where you stand in relation to your goal and knows how to do their part.
Major KPIs That Can Transform Customer Success Initiatives
While there is no formula that will tell you exactly what KPIs will be most useful for your enterprise and your customers, there are some metrics that are generally helpful in most situations. Here are some of the KPIs that customer success teams most commonly track:
This metric is about measuring how well your product meets customer expectations. But satisfaction is an emotion, which makes it hard to measure.
If they were unhappy, they would not buy the product a second time. Or you can send out a survey. Ask customers to rate their satisfaction with your product, service, or brand. Calculate the average rating from all the responses and you have your customer satisfaction score.
By drilling down into your customer satisfaction surveys, you can gain detailed information. Take the number of respondents who described themselves as “highly satisfied” and divide it by the total number of survey respondents. This will give you the percentage of customers who are “highly satisfied.”
This is important information because it tells you how many customers feel your brand or product is delivering the promised value. Customers who are “highly satisfied” are more likely to renew, upsell, or even spread positive feedback about your brand on social media or via word of mouth. You can also use the same approach to measure the percentage of customers who describe themselves as “dissatisfied” so that you can proactively target this group.
Ratio of Customer Lifetime Value to Customer Acquisition Cost
When examining customer lifetime value, or the amount of money a customer has spent throughout their patronage, you want to compare it to how much it cost to acquire that customer.
Did you have to spend $100 to acquire a customer who will only spend $10 throughout their lifetime? Or were you able to acquire a customer for free, such as through word of mouth advertising, who went on to spend thousands of dollars?
To get this ratio, divide the net expected lifetime profit from a customer by the amount it cost to acquire that customer. This metric will tell you about the effectiveness of your marketing and sales campaigns and provide a better picture of who your customers are.
You also need to gather information about how customers are viewing your product or service. One way to do this is to study the support tickets your customers submit. After all, customers usually send tickets when either something has gone wrong with the product or they are having trouble using or fully adopting the product.
Analyze the number of new tickets you get across a given time. Learn how many of the tickets were resolved, and take note of how long those resolutions took. If you have multiple product lines, analyze the tickets to learn which products received the highest levels of service tickets and if there are more tickets during a specific period of time (for example, after a major hack, more people might invest in security software). Support ticket KPIs can help you understand which products are giving customers trouble and provide insight into how to prevent escalations.
Customer Success Software Makes Tracking KPIs Easier
Customer success KPIs are some of the most important tools available for tracking the progress of your business and your customers. Without them, you may struggle to meet performance or revenue goals and may not be able to prevent customer churn. Make sure you define your goals, plan the tactics you will use to achieve them, and measure your progress regularly. Always make sure you personalize these KPIs to reflect your individual customers’ goals so you can give each customer the customized attention they need.
KPIs produce data that is critical for your company’s success. Make sure to track KPIs that monitor your customers’ goals in order to get an accurate picture of your company and product’s efficacy.
Totango can track the KPIs that best measure product and brand success during every stage of the customer journey. Our customer success platform makes it easy to customize your KPIs to ensure that you are providing the best value possible. Request a demo or explore Spark to start making the most of customer success KPIs.