What does a customer health score mean?
A customer health score tells how likely customers will repeat or grow their business. It looks at how engaged and happy customers are and other measures concerning keeping customers and getting new ones. Companies can use the number right away to get a quick idea of how healthy their customer base is at any given time.
Customer success teams use the customer health score to find customers who are at risk and make sure that they are the first ones to receive communication. It helps executives, board members, and investors determine where customer growth is coming from and where it isn’t.
Customers bring in most of a business’s money, so the customer health score shows both how healthy customers are now and how stable the business will be in the future.
Like words
- The health number for customer success
- Index of customer health
- The score for customer involvement
- The score for customer happiness
Why a Customer Health Score Is Important in SaaS
The customer health score is one of the most critical measures for SaaS customer success managers to monitor. It helps them figure out how to keep customers who are about to leave by giving them helpful information about how loyal their customers are.
Find healthy customers.
Because SaaS companies make money from membership services, keeping customers is crucial. A SaaS business can’t grow without steady income from happy users.
According to a McKinsey study, 71% of B2B customers want to be personalized at every stage of the buying process. When that goal isn’t met, they’re more likely to leave.
The first step in giving healthy people a personalized experience is to know who they are. People who do well on the customer health scoring system might be great customers for upsells, add-ons, personalized content, deals, and services.
Find customers who are at risk.
There will almost certainly be customer turnover. Customer success can’t always do anything about it. But many of it can be avoided if you take the proper steps.
A customer health score that keeps going down could mean that needs are changing, users aren’t adopting the app, the customer experience is getting worse over time, or any other problems. Customer success team members can look at customers whose customer health scores have decreased in the last few months and then send them a questionnaire or personal letter to learn more. That way, the company can fix the problem and keep things from worsening.
Find ways to grow your account.
To keep up with their needs as their businesses grow, SaaS buyers must add subscription features, more seats or licenses, or go up in plan. Customer success teams can use the customer health score to see which groups of customers are growing the fastest. The best prospects for future targeted sales efforts usually show high happiness and growth.
In addition, they’re great chances to grow within the same account. Upsells, cross-sells, and extra services are valuable ways to improve the products loyal B2B customers already own. For the business, they mean more money coming in without paying more to get new customers.
Find Patterns in Customer Information
Once a SaaS company monitors its customer health score over time, it learns new things about its customers.
As an example:
If a buyer’s customer health score drops quickly after being high in the past, it could mean that their experience with the product or team is getting worse.
If a customer satisfaction manager wants to see trends, they can look at their low-scoring users, who are the focus of their outreach efforts. Are their grades getting better now that they’re getting more help? Does the business plan to personalize work at all?
A large-scale SaaS company can use the customer health score to determine if there is a pattern to the accounts leaving.
The customer health number is significant because it clearly shows how loyal customers are and how healthy the customer base is right now. This kind of customer data is hard to find, organize, and measure.
How to Figure Out the Health Score of a Customer
Businesses usually use one of two methods to determine their customer health score.
- How often, how wide, and how deep
- For the first plan, you need to think about three essential things:
- Frequency is how often people use the goods and how often they return.
- Breadth is the number of active people in an account.
- The level at which users use the product’s primary functions is called its depth.
This simple approach lets Companies understand and track their customers’ engagement quickly. People who use the product less and less over time are considered harmful. A better customer health score would come from more use.
Actions and Values Given
Putting values on specific actions is the second approach. Like lead scoring, each action has a value that can be positive or negative. The customer health score is found by adding up the values of all the actions performed. Company leaders can pick these steps based on what’s most important to the business.
As an example:
- Getting less of a good would have a negative value.
- Getting good customer comments on a survey would be worth something.
- When product onboarding tasks are finished, they could also be given a good value.
Taking away points from users who don’t finish a task within a specific time is essential for more accurate results. This approach lets you look at customer engagement in more detail and can help you determine where customers might need more help or direction.
Metrics Related to the Customer Health Score
Companies must monitor other measures besides the customer health score (or sometimes figure it out). The brand usage rate, the net promoter score (NPS), and the churn rate are the ones you should remember the most.
Rate of Churn
A business’s churn rate is the number of customers who cancel their subscription or stop using its product over a specific time frame. The health of your customer base is better when the loss rate is low.
Many things, not just unhappiness, can cause churn. To get a more accurate picture of customer health, some businesses include sources of involuntary churn (like not paying their bills) in their calculations. For example, a customer who often misses payments might not be unhappy but is not interested.
Value for Money (NPS)
An NPS number can be used to find out how loyal and happy a customer is. Businesses can ask clients to rate their experience from 0 to 10, with 0 meaning they were depressed and 10 meaning they were pleased.
A business can find its NPS by taking the percentage of critics (those with scores between 0 and 6) away from the percentage of promoters (7+).
Because NPS is subjective, there is no “right” or “wrong” way to figure it out. It depends on the questions you ask, the situation in which you give answers, and how you think about the replies.
Rate of Product Use
This is the number of customers who regularly use your product over a specific period. This helps businesses determine what features their customers like and how often they use them. Companies can monitor this measure as a customer or by looking at real-time usage data.
Remember that customers only need to use key features to be called active users.
For example, an online store might track how many people add things to their carts as a sign of their interest in their products. But many people who shop online do it just because they’re bored. To get an even better idea of their customers, the brand must also look at conversion rates, which show how many visitors buy something.
Ways to Make Your Customers Healthier
1. Polls and comments from customers
Talking to your people is the first thing you should do to get to know them. Getting customer feedback and ideas through focus groups or polls can help you spot problems before they become big.
Companies should ask questions of their customers in a way that makes it easy to turn the answers into numbers and show them visually as trends.
If you want to ask a question like
“What do you want our product to do better?”
You could try something like
“How happy are you with the speed of our customer service on a scale from 1 to 5?”
or
“I believe Product Feature X needs to be made better.” (Agree or Disagree)”
That way, they can look at the poll results and see what needs to be fixed immediately.
2. Watch how involved customers are
Customer involvement could mean many different things, and it might be hard to track them all. This could mean how often people log in to your app, whether they finish the onboarding process, or even whether they read the emails you send them.
Companies can learn what features need more work and what customers want from a product by watching how engaged and active their customers are. The best way to do this is to keep track of users’ sessions over time, look for trends in their behavior, and figure out where they get stuck.
3. Provide prompt customer service
People who don’t get the help they need will leave before a product does anything good for them. 96% of people will leave if the service is terrible, even if they do not care.
The customer health score is instrumental because it helps you be more strategic. One on the customer success team could call a customer directly if they see their score going down. They can also set up alerts automatically when a customer’s health score is low.
4. Make the methods for hiring and training better.
The sales process doesn’t end when the customer pays the first bill, signs the contract, or downloads the goods. The real work starts with customer training.
Customers should learn to use the product and feel at ease with it quickly during onboarding. Businesses can achieve this by giving customers training, specific instructions, free trials of paid features, and custom digital materials for getting started, like videos and clickable guides.
ForCompaniesy provides one-on-one help, implementation, and deployment paid for by the vendor and dedicated customer success managers.
5 for enterprise software and other complex products. Making things unique
The saying “personalization is key” is true for every business. And there is a lot of evidence that personalization is useful. But businesses often get it wrong; they find it hard to tailor their services to their customers’ concerns.
Companies need to improve how they talk to customers in a few areas so that customers have a truly unique experience:
Sales—making the whole selling process easy by using software to show people deals and offers that are just right for them.
They use marketing automation tools to make emails, interactive ads, and website content more relevant to each customer based on how they interact with your business.
They are helping people by understanding their problems or questions and giving them personalized care in every interaction.
The customer success scoring method can be used to reach out and help customers when they need it the most.
Product: I keep track of what customers say and add new features and product lines based on that feedback.
Most businesses use “personalization at scale,” which means they improve the abovementioned things while automating parts that don’t need as much human input. On the other hand, an AI chatbot makes it easy to organize customer service tasks like creating tickets and sorting questions into groups.
6. Always getting better
A customer health score is a great way to see a customer’s engagement over time. It’s a great way to measure how well you keep customers and personalize your offerings, an ongoing process.
Customer health score data should be used to improve the product and experience and build stronger customer relationships. This is what continuous improvement means.
7. Share your value
Someone bought your goods because they thought they would meet a need, but that doesn’t mean they’ll ace them. The product might be complex to use at first. It’s possible that their team doesn’t know how to change how they work to make it work. Or maybe they didn’t tell you about their other wants during the sales process.
It’s not enough to say, “Our product does X, so you should get Y results from using it.” It would be best to keep showing customers new ways to use the product, look for problems and answers, and move their business forward.
An email program is the best way to do this. Small blogs, product guides, and how-tos for improving business processes can be shared through email. It’s essential to show the customer how the product can help them solve a whole problem with the material.
8. Strategies for renewal and upselling
When contracts are renewed, it’s easy to forget them because they happen in the background. However, getting customers to renew their contract in person is the only way to ensure they keep using the product and see its worth.
Renewals are usually easy to handle. Most companies set up an automatic system to remind you to renew your contract before it runs out. This is usually a built-in aspect of subscription management software. It’s also easy to see which customers need extra care with the customer health score, which also helps protect customers who are likely to leave.
Upselling is another excellent way to make a customer worth more over time. Because the customer is happy with the service and the product, it’s always a good idea to look into the possibility of growth and expansion.
9. Alignment of metrics
Sales, marketing, and customer success metrics show how well customers did. To get a complete picture of the customer journey, each team should know how the other teams measure progress.
For example, customer success might need to know how long it takes most people to have their first “aha!” moment with a product. Or, they might check out how customers use a specific part of the product.
Customer segmentation helps sales teams focus on the customers most likely to buy and stay with them.
To help each team work together better, these measures should be kept track of and shared. This way, everyone on the team can see how their work affects the customer experience as a whole.
1. Check and measure
The customer health score is just a number at the end of the day. The best way to use it is as a starting point for more research and improvement.
Use data toolstou learn as much about your customers as possible. All parts of the customer process should be looked at, such as signup and onboarding, usage, engagement, upgrades, renewals, churn rate, and customer lifetime value.
Finding places to improve is possible by looking at this information from different angles. In turn, this leads to an improvement in the general health score of the customer.
