I had an interesting conversation on LinkedIn the other day. It was based on a retrospective view of the customer success profession which I had written about on the State of Customer Success in 2018 after attending a conference. I captured the essence of the conversation in a DanelDoodle and discuss briefly here.
The first thing I considered are what are the main metrics. These are the four you see representing each quadrant.
I believe these are pretty much the main ones – did I overlook anything? Here’s a short overview of each below. And to be clear, they refer to metrics Customer Success Leaders and Managers are being held to in terms of accountability and how I believe that has changed over the years. Of course this all depends on the maturity of the function in your company and of the company itself.
I’m talking in very general terms and the metrics characterised as “After” don’t mean to indicate those “Before” don’t matter any more. Its just a question of emphasis over time.
Financial
As Alex mentioned in the conversation, things like Churn Rate, Lifetime Value, Customer Acquisition Cost, etc. I agree in the main and as I said in a comment, “with current [COVID] pressures, financial metrics are going to dominate even more”. This will hold for only the most mature organisations where customer success teams are made the accountable function. Most often though, it’s still a sales or account management function and separated out.
Product Usage
A basic building block. Without it (adoption) you cannot have any of the others. And I’m not just talking about usage and adoption here, driven by CS teams, but about feature oriented metrics based on telemetry, that product teams are generally responsible for. But CS teams should have a large responsibility driving qualitative customer feedback which effects what features are adopted, which in turn drives further adoption.
Customer Health / Satisfaction
Another standard building block in terms of customer success impact. Again this depends on the maturity of the CS function in the organisation. Often this will be a function owned by Account Management teams or Customer Support teams. So debatable how much this has changed over time.
Business Outcomes
The Holy Grail. Where a clear connection can be made between what CS teams do and how this impacts on the customer’s metrics (increased revenue, reduced costs, improved operations, etc.). This is what matters most in my view and where the playing field is moving to in terms of CS focus. I’ve not reflected this in the doodle but if anything should be done to improve CS accountability it should be in this area – remove all other (distractions) and just drive this – that would be enough in my view.
One thought on “Metrics that matter in Customer Success”