Metrics Used to Measure CS ROI Part 1
While there doesn’t appear to be an obvious unifying metric that aggregates across all the customer lifecycle phases and touchpoints, a powerful proxy that we can employ to measure Customer Success ROI contribution is customer lifetime value, whose impact can be measured and narrated at a Monthly Recurring Revenue level. The greater the customer lifetime length (in months), the greater their value and profitability contribution throughout their lifetime.
With the vast amount of data that can be measured, it can be overwhelming to decide which Customer Success metrics to focus on, in order to improve and grow your SaaS business. Incorporate customer satisfaction metrics through surveys like Customer Satisfaction Score (CSAT), Customer Effort Score (CES) and Net Promoter Score (NET). Customer Success metrics for SaaS companies have a huge role to play in measuring a company’s growth.
Customer tracking software helps in keeping up with essential information about your customers. You can track customer history and get to know the issues faced by your customers. With this piece of information, you can work towards resolving issues faster and avoid losing customers. Customer Success analytics software gives you a complete picture of who your customers are, their needs/ requirements and how they are using your product. It helps you decide when you have to proactively reach out to your customers. All of this helps in increasing customer experience, ROI, and in building relationship and loyalty.
A dollar invested in Customer Success will impact either the churn rate or the average revenue per customer, depending on the functional area the investment is in – retention or expansion. Tracking these metrics and narrating them to Customer Lifetime Value (CLTV) delivers a clear calculator of value creation. In order to increase CLTV, investments have to be made either in MRR expansion (account management) or MRR protection (Customer Success, support, services, training). In order to receive funding and gain executive support, you need to demonstrate sustainable value. This repeatable value has to take the form of quantifiable revenue, not only for your company, but also for your customers by presenting your Customer Success team with strategies to boost productivity and ensure capital growth.