Measuring customer success metrics is a great way to understand the relationship of a person with an organisation. Sometimes, unsatisfied customers might leave without offering negative reviews. In this scenario, with solid data, brands cannot confirm the ‘health’ of the customer. So how can brands identify the health status of a buyer? This can be done by a popular CX metric called customer health score.
What is Customer Health Score?
Customer Health Score is a metric that gauges the overall health of a customer’s relationship with the organisation. This is based on various factors like product usage, customer satisfaction, number of times they have interacted with the support team, number of support tickets and resolutions, and community engagement. It provides a snapshot of the customer’s relationship with the business.
Why is customer health score important?
Customer health scores play a vital role in driving business growth. This proactive approach enhances customer satisfaction, fosters loyalty, and reduces customer churn. Ultimately, a focus on health scores empowers your customer success team to strengthen customer relationships, optimize CX during journey mapping. The health scores provide necessary data for teams to close feedback loops, prevent churned customers and offer better retention strategies for their target audience.
Important Health Score Metrics to Consider
The CHS metric can change across various industries. However, the retention metric is valuable for account managers and customer success managers. It lets you know if a buyer is at the risk of churn, their current pain points and how high that risk is.
Here are some general scoring metrics to consider:
Product usage:
This denotes how often a person can use the products and services offerings by the brand. This tracks the usage frequency, usage patterns and their experience with the product.
Product upgrades:
A buyer will upgrade only when they are truly satisfied as a new customer. A product upgrade can be good news for a brand but it boils down to the retention levels after the upgrade. When a buyer is looking for an upgrade, this becomes an opportunity to upsell or cross-sell upgrades.
Number of renewals and upsells:
When a person conducts a financial transaction with a brand, they become a customer. When they are looking for a renewal or an upgrade, they become brand loyalist over time. The CX team will track the number of renewals and upsells of each buyer and map it against their industry benchmarks.
Timeline of customer engagement:
Engagement includes community participation for survey rewards, giveaways, interaction with other users, brand announcements and the like. While people are engrossed over virtual platforms, social media engagement is also an important metric to consider.
Customer satisfaction metrics:
There are industry standard metrics that can measure customer loyalty, identify detractors and capture the overall customer experience. This includes net promoter score (NPS), CSAT surveys or customer satisfaction ratings and CES score or customer effort score. Each of these metrics are shared over certain transactions, post purchase, interaction and at various touchpoints in the customer journey.
Product feedback:
People share product feedback over social media platforms, third party review websites or directly to the company emails. Teams can collect feedback, assess pain points and use this information to refine their product. This is especially useful when saas companies seek feedback from their user base via various online mediums.
Website activity:
Websites can track if a person is a returning viewer or a first timer. This boils down to the intent of the person browsing the website. A potential buyer can check for product reviews, FAQ section or interact with a chatbot. You can gauge website activity using Google analytic tools.
Need and number of times for customer support:
Unhappy customers might have a heated argument with the customer support team members. However, it can be seen in a positive light. This becomes an opportunity to turn things around especially when people need immediate assistance or need on-call support. However, there can be instances where a single user might run into multiple problems with the brand. This can be a major highlight to internally improve on the workflow.
Maximum value of purchase on the invoices:
While different buyers might have differences in invoice value, each buyer is important. A person making a small purchase can become a brand loyal buyer is CX teams offer them personalized assistance. While this is not the ultimate metric to judge health scores, you can consider it as an opportunity to convert a small buyer into a brand loyal user.
Keep the metrics manageable and utilize the right tools to assess customer data to propel your business in the right direction.
However, avoid putting everyone in the same metrics. A customer who might not be too interactive with the community could have been a loyal buyer. While every individual user may not fit every single metric, the customer success team might miss on the details, upselling or cross-selling opportunities. Every single person might have their own engagement levels.
Keep a Note of 4 Objectives for a Customer’s Health Score
- Maintain a separate scorecard for every consumer.
- Create your own benchmark using historical data.
- Customize your surveys and assess useful metrics.
- Build brand related charts and scales.
1. Maintain a separate scoring system for every consumer:
If a new customer uses your product but leaves a negative feedback, you can add or deduct points from their interaction with your products/services. Identify a score that can summarize the entire satisfaction metrics without complications. In a SaaS business, if your buyers are happy, allocate a positive score. If the users are dissatisfied or are moving towards a competitor product, their score should get the customer service team spring into total action.
2. Use historical data to make your own benchmark:
Create your own benchmark of healthy buyers versus people who are at a high risk of churn. It is okay to experiment on a sample customer base before you utilize this metric on a larger target audience. Segment each user base into numerical groups. You can colour code the segments and allocate actionable items depending on the overall customer health score. Example if a customer falls below 45% of the overall score, it is time to identify the pain points and close the feedback loop.
3. Customize your surveys and rating scales:
You can capture customer feedback using omnichannel platforms- places where people are usually most active. Marketers can plot satisfaction metrics across graphs and bar charts. Opt for an open ended response from your buyers to allow them to express beyond a rating scale. Include customer satisfaction metrics of net promoter score, CSAT and CES scores. Set up inmoment feedback and data collection to save a company from losing a valuable client.
4. Build brand related charts and scales
Finalize a way to have an internal customer health scoring system. You can use this system across organisations in your industry. This can be in the form of a ranking scale or alphabetical scorecard. Ranking scale can demote promoters or detractors with relation to their health scores. Keep a track of their past interaction with your product and services. If a score falls, it is time to investigate the drop. If a score is stagnant, the user might be a passive who may or may not convert to being a loyal customer. A higher score indicates a satisfied user.
Are there industry standards or benchmarks for customer health scores?
Industry standards or benchmarks for customer health scores may vary depending on the sector, but common factors include customer satisfaction, engagement levels, usage frequency, and churn rates. It’s advisable to compare your customer health score against your industry peers to gauge performance accurately.
Create a customized customer health score formula according to your target buyers and area of industry offerings. This can help you curate product and service offerings according to internal benchmarks.
Conclusion
Establishing a robust customer health score system is essential for any organization looking to maintain customer loyalty and satisfaction. Encourage constant feedback via scales of NPS, CSAT, and CES scores, along with inmoment feedback collection. Use WhatsApp messenger surveys, Facebook messenger surveys, interactive chatbots and AMP email surveys to capture candid feedback across multichannel touchpoints. Sign up for a 14 day free trial with Merren, without any credit card commitments. Track every data over the Merren CX dashboard today.