The 7 best customer success KPIs
Although there are many KPIs that may give you information about your customer success, you'll want to focus on those that are going to provide the most meaningful and actionable data. With analytics, it is easy to get bogged down by the sheer number of statistics that can be thrown at you. When this happens, you'll often find that you miss the forest for the trees. By focusing on some of the most crucial metrics for measuring customer success, you can more intently focus your efforts on helping your customers through their journey and maximizing the value of your product for them.
You may be familiar with churn rate as a percentage of your customers that leave every month, but there is also another type of churn that is important to pay attention to. Losing a high-value customer or having them convert to a lower-priced tier is an indication that your higher-priced tiers are not delivering the value that your customers are expecting from them. This type of churn is called gross dollar churn.
When determining how your customers are perceiving the value of your product, you want to pay attention to both the customer churn and gross dollar churn. This will give you a better indication of which customers are leaving and point you in the right direction to rectify the problem.
Whereas the two churn rates mentioned above are a more detailed look at customer retention, watching your monthly recurring revenue can provide you with a nice overview of how your product is being perceived. Although different tiers can complicate the equation, generally speaking keeping this number growing rather than shrinking is a good indicator of your overall customer satisfaction rate. It is sometimes helpful to use these big picture metrics as a way of giving you an at-a-glance look at your company's health.
3. Customer LTV
Customer lifetime value stats are often used in a cost/benefit analysis with the price of user acquisition, and they're calculated by multiplying the total number of customers by the average revenue generated per customer over time. However, that isn't the only use they are good for. If you can find ways to provide more value to your product, then you should see an increase in your customer LTV metric. This could be something as simple as making your higher-priced tiers more attractive to existing customers so it is easier to upsell them. If your upsells are more than just higher-priced tiers, such as a la carte add-ons, then finding more effective ways to make customers aware of them will likely cause an increase in upsells, as well. In both cases, you are providing customers with something that they value. By increasing your own customer LTV, you are increasing the satisfaction of your customers.
4. Net promoter score (NPS)
Your net promoter score is based on surveys of how likely your customers are to recommend your product to others. This makes your NPS, along with your customer satisfaction score, one of the most direct ways of gauging customer satisfaction. Because this metric is user-generated, it is also very actionable. Your survey should include a section where customers can tell you what they like and don't like about your product. You'll be able to use this information to determine where your customers are finding pain points with your software and resolve those issues. When you eliminate the reasons customers would not recommend your product, you'll inevitably increase their satisfaction.
5. Expansion revenue
In a way, expansion revenue is the opposite of churn. It measures how much of your new money is coming from existing customers. In other words, it measures how successful you are at upselling to your existing base. While acquiring new customers often gets the most attention, it's much easier and more profitable to your bottom line to generate revenue from existing customers. Getting this number up can be just as important as reducing churn for decreasing your reliance on acquisition. More importantly to the topic at hand, if your existing customer base is willing to spend more money on you, then you have a reasonable assurance that you're providing them with a value that meets their expectations.
6. Customer satisfaction score
Your customer satisfaction score is similar to your net promoter score in that it is based on a survey of actual customers. This time, instead of asking them how likely they are to recommend your product, you ask them how satisfied they are with the product. Although this and NPS are direct measures of customer satisfaction, they do not paint a whole picture. If two customers rate your product as equally satisfying, but one gets significantly more use out of it, the second one is more likely to stick around and potentially upgrade to a higher-priced tier.
7. Customer support tickets
Customers shouldn't struggle to use your product. Whether they contact support because your software is buggy or because they simply have a hard time finding their way around, customer support tickets are a sign of failure at some point in their journey. Your customer success team should strive to find the pain points that people frequently contact support for and take proactive steps to educate the user base on these problems so that they don't have to contact support.