When you’re in the business of delighting customers, you need to be a bit of a mind reader. You should know what your customers are thinking and feeling, and what they need from your business to have the best possible experience.
1. Net Promoter Score
Net Promoter Score (NPS) is a metric that measures customers’ willingness to recommend your company’s products or services to others. It is one of the most widely used customer success metrics.
To calculate NPS, you ask customers the following question:
“How likely is it that you would recommend [Company/Product/Service] to a friend or colleague?”
Customers respond to this question by selecting a number from 0 to 10, with 0 being “Not at all likely” and 10 being “Extremely likely.” Based on their response, customers are categorized into one of three groups:
• Promoters (score 9-10): Loyal customers who will keep buying and refer others, fueling growth.
• Passives (score 7-8): Satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
• Detractors (score 0-6): Unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
NPS is calculated by subtracting the percentage of detractors from the percentage of promoters. You don’t include passives in the calculation.
NPS can be used to measure customer success at different points in the customer journey. For example, you can send an NPS survey to customers after they complete an onboarding process, after they make a purchase, or after they have been a customer for a certain period of time.
NPS is also a good way to measure customer success in real time. You can send NPS surveys to customers on a regular basis to get a sense of how they are feeling about your company. If you see a sudden drop in your NPS, it could be a sign that you need to take action to improve customer success.
2. Customer Satisfaction Score
Customer satisfaction scores (CSAT) are a great way to get a pulse on how your customers are feeling. You can send these out after a customer has had a conversation with your team, after they’ve used your product or service, or at any other time you see fit.
The CSAT survey is a one-question survey that asks customers to rate their satisfaction with your business, product, or service. They can do this by giving a star rating or by selecting an emoji that represents how they feel.
3. Customer Effort Score
Another simple way to measure customer success is by asking customers to rate how easy it was to do business with your company.
You can do this at the end of a support conversation, after a sale, or after a customer uses a feature in your product. You can even ask customers to rate how easy it was to sign up for your product or service.
When you ask customers to rate their effort, you can use a simple scale of 1 to 5 or 1 to 7. The lower the score, the easier it was to do business with your company.
4. Churn Rate
Churn rate is a metric used to measure how many customers stop using a product in a given period of time. It’s the opposite of customer retention.
To calculate churn rate, divide the number of customers lost during a certain time period by the number of customers you had at the beginning of that time period. Then, multiply that number by 100 to get a percentage.
If you have a high churn rate, it’s a sign that your customers aren’t finding success with your product. In that case, you may want to reach out to your customers and ask why they’re leaving. Then, use that feedback to improve your product and reduce churn.
5. Customer Retention Rate
This is one of the most straightforward ways to measure customer success. It’s also one of the most important. Your customer retention rate is the percentage of customers that continue to do business with your company over a set period of time.
This is a great way to measure your customer success because it’s a direct reflection of how well you’re doing. If your customers are seeing success, they’re more likely to stick around and do business with you again.
And, as we all know, it’s much cheaper to retain a customer than it is to acquire a new one. So, increasing your customer retention rate is a great way to boost your bottom line.
6. Upsell and Cross-Sell Rates
It’s easier to sell to an existing customer than to acquire a new one. That’s why upselling and cross-selling are critical to your business’s growth.
Upselling is the process of getting customers to buy a more expensive version of a product they already have. Cross-selling is the process of getting customers to buy a different product that complements the one they already have.
Measuring your upsell and cross-sell rates can give you a good sense of how successful you are at retaining and growing your customer base.
To calculate your upsell and cross-sell rates, divide the number of customers who have made an additional purchase by the total number of customers. Then, multiply that number by 100 to get a percentage.
7. Customer Lifetime Value
Your customer success team is responsible for retaining customers and keeping them happy. But, they should also be focused on upselling and cross-selling opportunities.
By doing so, you can increase your revenue and profits. But, you’ll also be increasing the customer’s lifetime value (CLV).
CLV is a metric that shows you how much a customer is worth to your business. The longer a customer stays with your business and the more they spend, the higher their CLV will be.
To calculate CLV, you can use the following formula:
(average purchase value) x (purchase frequency) x (customer lifespan)
Customer lifespan is the average length of time a customer stays with your business before churning. You can calculate this by dividing 1 by your churn rate.
If you have a high churn rate, you can also use CLV to identify which customers are at risk of churning. You can then focus your efforts on retaining those customers and increasing their CLV. Utilizing a customer lifetime value calculator can streamline this process, making it easier to analyze data and make informed decisions about customer retention strategies.
8. Product Usage
Product usage is a way to measure how often your customers are using your product. This metric is important because it can help you determine how happy your customers are with your product.
If your customers are using your product frequently, it’s a good sign that they are happy and that they are getting value from your product. Conducting regular usability testing can help identify areas where customers might be struggling or suggest improvements to enhance their experience. If your customers are not using your product very often, it’s a sign that they may not be getting value from your product and that they may not be very happy.
You can measure product usage in a number of ways. For example, you can track how often your customers log in to your product, how many features they are using, how many tasks they are completing, or how many products they are buying.
9. Time to Value
Time to value is a metric that measures the speed at which a customer sees value in your product or service.
In the onboarding process, you should set expectations and goals for what the customer wants to achieve with your product. Then, you should measure how long it takes for them to complete those goals.
If a customer is able to see value in your product quickly, then they are more likely to be successful in the long run. If it takes a long time for them to see value, then they are more likely to churn.
10. Customer Health Score
A customer health score is a great way to measure how engaged a customer is with your business. This score is usually calculated using a combination of different customer success metrics and KPIs.
For example, you could look at how many support tickets a customer has submitted, how many times they’ve used your product, how many people on their team are using your product, and more.
By combining these metrics, you can create a customer health score that gives you a quick snapshot of how engaged a customer is with your business. If a customer has a low health score, you can reach out to them and take steps to improve it.
11. Number of Support Tickets
Customer support is a key part of customer success. Your customer support team is responsible for resolving issues and answering questions.
It’s important to keep track of the number of support tickets your team receives. A high number of support tickets could indicate that there is a problem with your product or service.
You should also look at the average time it takes for your team to respond to support tickets and the average time it takes to resolve issues.
12. Social Media Engagement
Social media is a great way to measure customer success. You can track customer sentiment, engagement with your content, and more.
For instance, if you are running a campaign focused on media buying in Denver, you can measure the effectiveness by analyzing the engagement rates of local customers with your social media content.
High engagement levels, such as likes, shares, and comments, would indicate that your media buying strategy is resonating well with the Denver audience.
On the other hand, if you’re not getting much engagement on social media, it could be a sign that your customers aren’t as satisfied.
13. Referral Rate
If you have a high referral rate, it’s a good sign that customers are happy with your product or service. A high referral rate means that customers are more likely to recommend your business to their friends and colleagues.
To measure your referral rate, you can simply ask your customers how likely they are to recommend your business on a scale of 1-10. Customers who give you a score of 9 or 10 are considered promoters. Customers who give you a score of 7 or 8 are considered passive. Customers who give you a score of 6 or less are considered detractors.
You can calculate your referral rate by subtracting the percentage of detractors from the percentage of promoters.
14. Customer Feedback
The best way to measure customer success is to ask your customers. Customer feedback is one of the most important metrics you can track, and it can help you identify any issues your customers may be having.
There are many different ways to collect customer feedback, including surveys, interviews, and online reviews. You can also use customer feedback tools to monitor what your customers are saying about your business online.
By collecting customer feedback, you can get a better sense of how your customers are feeling and identify any areas of your business that may need improvement.
Conclusion
Customer success is the foundation of your business. By tracking and improving customer success, you can grow your customer base and your revenue.