One of the most difficult parts of any business is quantifying success and failure. The rise of Customer Success, first in SaaS companies but quickly expanding into traditional industries, indicates a renewed focus on this problem from the point-of-view of the customer (based on the name alone, right?). Customer Success, according to Wikipedia, is the department at a company whose goal is:
- maximizing the value that customers generate from the solutions they acquired from the vendor by making those solutions as profitable and productive as possible, and
- maximizing the value the vendor can in turn derive from the customers, resulting in sustainable corporate profits and growth.
Based off of this definition, the Customer Success department has two primary drivers: revenue growth and driving value for the customer. But if you look around for advice related to Customer Success metrics, you’ll find that the measures are all weighted towards revenue growth, and not driving value for the customer.
Take this recent post from Business2Community on the “4 Customer Success SaaS Metrics the Can’t Be Ignored”: the can’t-miss metrics include:
- Annual/Monthly Recurring Revenue
- Customer Lifetime Value
- Customer Acquisition Cost
Overall, these metrics are pretty standard fare for a Customer Success Manager, whose livelihood depends on the improvement of those numbers. The thinking goes that if a company is making more money, it’s because the customers are succeeding.
The Fever Is Not the Disease
Tracking changes in revenue and cost are critical measures of success. But these measures essentially take the temperature of the business overall. Without the right insights into the customer experience, the disease goes untreated; any remedies are blind prescriptions.
Revenue-based metrics need to be backed up by hard numbers indicating where your customers are going when they interact with your company and your products. It also needs good narratives to be able to create a customer journey that links together the sum of the customer experience from marketing to renewal.
So the question becomes: how do you systematically quantify a story in a way that provides reportable insight on an individual or holistic basis?
Best Practices Make the Best Customer Success Metrics
More likely than not, your company has a set of best practices documentation that make up the bulk of your onboarding and support material. By codifying these best practices into reportable milestones, you can build a quantifiable story that tells you how individual customers are progressing towards success, as well as a holistic view of your customer base.
The documentation you already have can be turned into pathways that lead customers towards a desired outcome by following a set of milestones.
Even if you don’t have these pathways already set up, and your best practices are just a jumbled mix of stub articles, the path has likely already been walked before. Look at what your most successful customers are doing. What did they do to up engagement with your product? What did they do to make it “sticky,” instead of the product usage dropping off after implementation?
Conversely, analyze your customers who are struggling. What are they doing that is hurting? Did they spend too much time in implementation before seeing value? Was there a hurdle that couldn’t be cleared technologically that’s holding them back?
Answering these questions and having a clear best-practices-as-metrics setup will not only improve the work of customer success, but it will set up more successful presale interactions as well, because there is a clearer vision that the sales and marketing team can sell.
But most importantly, your customers will benefit from a Customer Success team that can use proven tactics to guide them towards success.