When it comes to the metrics of a business’ success, CEOs usually turn to measuring the efficiency of the customer support realm.
For example, how many customers have signed up to the mailing list? How many first meetings have the sales reps booked? How many outbound emails are your salesmen sending?
These are some of the many metrics that managers use to separate the outstanding salespeople from the rest. However, with the new age of technological analytics, many believe that the old sales playbook is outdated, (and almost Draconian), with new measures being used to determine a business’s customer satisfaction success rate. Two words: strengthening relationships.
With this in hand, let’s have a look at the new 7 customer metrics we should be paying attention to for organic customer success.
1) Qualitative Customer Feedback
The best salesman always ask the right questions. What do they really think about your company and the services you provide? Which parts of their buying journey did they love, and which ones not so much?
Make your customers feel important. Allow them to feel comfortable enough to provide truthful feedback which in turn is a great way for them to begin their long- lasting relationship with your brand.
2) Customer Health Score
It’s important to remember that once a customer has bought the product, their journey does not end there, you have to look at the bigger picture.
Are your customers seeing value from your product/service? How often are they using the product? What impact do your services have on their business?
The takeaway from this is that it’s important to determine whether your customers are not only surviving, but thriving with your product.
How to measure this: What do their financials look like before and after implementing your product/ service? How has their customer base grown?
3) Monthly Recurring Revenue
This is a great metric for determining the amount of money that your customers’ are spending, per month, on your products/ services. The idea behind this is that you can see how successful your customers have found your products, by comparing the values over time. This is a technique most commonly used in businesses who operate on a subscription- based pricing model.
Additionally, Expansion MRR can also show you how much additional revenue you are generating from these customers, aside from their monthly subscriptions.
To calculate MRR all you have to do is multiply your total number of customers by your average revenue per user. This gives you the total amount of money you are generating each month. To calculate Expansion MRR, you simply add up all additional revenue outside of recurring purchases i.e. up-sells and cross- sells.
4) Customer Retention Cost
This metric is a way to prove whether your customer success efforts are cost- effective. CRCs outline the total cost of your customer success program compared to the number of customers you have in total. You can now figure out whether you are spending too much money on each customer, or just the right amount, in your retention efforts.
To calculate this you need to get down with the nitty gritty and audit the expenses of all your customer success efforts i.e. expenses spent on payroll for you customer success programs and teams, engagement software, marketing and training. Divide this cost by your total number of customers to then get your average CRC.
5) Customer Lifetime Value
CLV is one of the most important tools you can use to measure the success of customer satisfaction in your business. It symbolises the total revenue that a single customer generates over the course of their relationship with your brand.
CLV is a way to figure out how much value each customer brings over time. If this increases then you can take pride in the fact that your products and services are contributing to your customer’s successes.
You can calculate CLV by multiplying the average value of one purchase by the average number of purchases per customer.
6) Customer Satisfaction Score
This metric allows you to understand how your customer found their experience interacting with your brand. It doesn’t necessarily have to be how they found their purchasing journey, it could simply be how they felt after reaching out to the support team for product info.
Measuring CSS is quite different to the other metrics. It involves asking your customers to complete a survey right after they have interacted with your brand, so you can get the truest response from them. The CSS should only be a reflection of how the customer found an individual experience with your team/ products, not their overall perception of your brand.
To calculate the CSS, you ask the participant to rate an experience from 1 to 10, then you divide the number of positive scores (6 to 10) by the total number of participants in the survey. Then, multiply this number by 100 to achieve a percentage.
You are now left with the % of customers who are happy with their brand experience.
7) Renewal Rate
This metric is one of the most important for subscription- based businesses, i.e. for SaaS products.
The higher the renewal rate, the greater your product/ team’s customer success rate. It shows how many customers are willing to commit to your business for another contract period.
To measure the Renewal Rate, you take the number of customers who have renewed their subscription and divide this figure by the number of users who’s trial has come to an end and were up for a renewal. You then multiply this final number by 100 to determine your Renewal Rate.
Instead of cold- calling, cold- emailing or simply staring at your Outreach to see whether a prospect has opened their email or not, the best way to understand just how happy your customer base is, is to pay attention to the relationships they have formed with your brand.
Hope you have enjoyed learning about new ways to gauge brand satisfaction and have new founded inspiration to ramp up your sales strategies!