Taking about Customer Success is all the rage with SaaS solutions as companies figure out it is better to keep customers instead of relying on backfilling churn with new sales. For companies that have been around for a while, customer success likely wasn’t mapped out in the early years when the core team was focused on just getting an app out the door But it can make a real difference in understanding when you have customers that are at risk, and their dollars will go with them.
To begin, understand that customer success relies on all departments in the company working together with the common goal of helping customers get value from using the platform. This includes:
- Sales selling the right customers.
- Developers building the right new features.
- Support answering questions quickly and pleasantly.
- Billing should be simple, automated, and accurate.
And the glue that holds this all together is the overarching customer success manager, or possibly account manager role, helping the customer navigate through training and system adoption.
If you are building a new platform or retrofitting an existing platform, identifying the key metrics that you will monitor for customer health is one of the ways to bring some clarity to what is going on with your customer base in addition to building relationships directly with the customers to get their feedback.
When it comes to monitoring there are two approaches.
Monitor Overall Customer Health
One is to monitor the overall health of the customer base and solution. Some examples of what you might track here:
- Tag keywords associated with support requests either via chat, email, or phone service requests. Using a tag cloud will help identify what words are bubbling up to the surface to allow the team to evaluate if parts of the system may need to be re-engineered to be easier, if the training or product manual needs to be refined, or if there is a key feature missing.
- Tied into the tag keywords, it would be valuable to be able to drill in into the words to get a sense of the volume as well as the growth or reduction over time of the use of that tag. In solutions where there is a cyclical nature to the customer business, you may see a rise in certain tags at certain times of the year or month. This can help improve the understanding of the customer business and communicate in advance of those cycles helpful information to continue to raise adoption of the platform.
- Identify feature sets and usage parameters to view customer adoption of those features. For example, let’s say you have three main features: Client Data, Task Management, and Customer Payments. Seeing that a large number of customers are using Client Data and Task Management, but few are using Customer Payments again identifies an area of low adoption. Determining how to increase the adoption rate of the feature becomes the exercise.
- Monitor summary license counts with risk rating to visualize potential churn.
Customer Specific Tracking
There are customer-specific identifiers that an also be used to track the health of the customer and determine a risk profile for the likelihood of the customer not renewing or exiting.
- User license changes can be an indicator of the risk of a client leaving, especially if there is a large dip in the count. Unfortunately, this is a bit of a lagging indicator as by the time there is a big drop, it may already be too late to remediate. But watching a slow decline may indicate the customer is not getting value across their staff base and address those needs can help retain those customers and boost that license count back up.
- Use login frequency and duration are another way to identify the potential risk of loss of a license. If a user should be logging into the system every day, and they are logging in only once a week or spending only a few minutes a week in the platform (when you expect substantially more time), that may be an indication that there is a risk that the customer has not fully realized the value of the platform. Establishing the risk profile here is going to be very platform-specific. If you have an ERP, likely you expect customers to log in daily and spend at least a few hours in the platform. However, if you have a billing system, that frequency may be much lower.
- The volume of support requests and tone of those requests can be another identifier. Volume isn’t necessarily a bad thing. It could mean that the agency is working on adopting a new portion of the system which triggered an increase in support requests. However, rating the tone of the request can help identify when a customer is facing frustrations with the platform that would warrant a higher-touch approach to resolve their issue and get them on the path to value faster. Even no support requests over a prolonged period of time can identify the potential for a problem..they may have just given up on the platform and are waiting out their contract period. There is some interpretation required but having the data available to work with helps paint a more complete picture of the customer health.
- If you are surveying your customers either at those different touchpoints, or with an occasional brief customer survey, including those responses provides another metric for evaluating customer health. This may be understanding of if they would recommend the platform to another business, or their satisfaction with the assistance they received. The key here is to keep it simple and brief to collect the feedback.
- There also needs to be an opportunity to identify other risk factors that may put that customer at risk for not renewing. For example, Mergers and Acquisitions are a large risk for our customers. They are purchased by another larger agency that wants to consolidate systems and the result is we lose that business. Keeping a handle on when customers are purchased, or if I hear that they are trying to sell the agency, allows me to identify that the customer is at risk and consider that when I’m looking at my numbers.
- Understanding the feature adoption within the platform is another opportunity to assess the health of the customer. Tracking which features are being used by the customer, the frequency of use, and the time spent in those tools can really help paint a more complete picture. This is especially useful if you can tie the adoption to goals initially established with the customer during the sales and onboarding process.
By putting the hooks in place to be able to track these metrics and assess customer health, some additional revenue forecasting can be done with weighted values for customer renewals combined with expected churn rate base on the health score of the customer.