Check your calendars, 2022 is just around the corner! Yes! Even we cannot believe it. 2021 passed away like a breeze but along with came a lot of lessons. This article aims to compile the key Customer Success KPIs we have to look out for in our Customer Success journey in 2022.
Every company is prepping for some breaks but along with it comes the discussion of budgets and setting customer success goals for 2022. Customer Success is more relevant to your business for SaaS companies and you need to understand the nuances of the roadmap forward. We are here to help you!
Customer Success is a tricky department because it does not yield instant ROI. Thus it becomes increasingly important to build measurable and scalable processes that rely on the right KPIs. If you need more manpower to achieve those goals, invest in them. In 2021, 91% of CS professionals stated their teams increased team numbers over the year.
So we can get down to some of the Customer Success’ key performance indicators (KPIs) or Customer Journey KPIs for 2022.
Any surprises here? I don’t think so. Retaining customers is the bread and butter of CS departments. In a recent survey, 94% of the CS professionals rated churn reduction to be the highest priority. Here churn takes different forms; we mainly categorize it as customer churn and revenue churn.
Customer churn is the percentage of customers who stopped using your services divided by the total number of customers in a certain period. Since customer acquisition costs (CAC) don’t look to go down especially for high-growth companies, keeping customers is getting more and more important. Low churn rates mean your CS department is functioning to a good potential.
For a more in-depth dive on churn, check out our sweet churn guide!
2. MRR Churn
Yeah, we did not forget revenue churn, we just wrapped it in Monthly recurring revenue churn. Just churn does not cover the full potential of the customer success department. MRR churn is the erosion of the monthly recurring revenue. This takes into account the downgrades or upgrades with customer growth. For calculating MRR churn, you just divide MRR lost due to canceled contracts divided by the total MRR.
This is a simple KPI but takes into account the effect of Customer Success on the bottom line of your business.
Additional Resources: 7 data points that drive Retention
3. Customer Satisfaction Score (CSAT)
Customer Success is not just about those retention rates, it is about creating a customer-centric business. The survey also said that 84% of the CS professionals want to prioritize advocacy in 2022. Advocacy is a huge organic driver for growth. Thus, Customer Satisfaction scores and NPS scores are the two next KPIs of focus. Personalization and smooth customer experience are becoming an umbrella terms under Customer Success. Focusing on CSAT is key to understanding where you might be lacking in your customer journey.
CSAT can be an overall measure or a touchpoint measure. It is usually a five-point scale where 1 means very unsatisfied and 5 means extremely satisfied. You can evaluate it for different points in a customer journey to get a better understanding of where your strong suits and weak suits are.
Just a 10% increase in a company’s CSAT can lead to a 12% increase in trust. Good service is important.
Important Resource– Difference between NPS and CSAT
4) Net Promoter Score (NPS)
NPS is a weird one. It is becoming an increasingly ineffective measure in the sense it does not give actionable insights but a good NPS score is still a big Customer Success benchmark. I think in terms of KPIs, NPS can be a good ego stroke. The biggest plus of it is the ease of understanding and implementation. Net Promoter Score is a customer loyalty metric that tells businesses how strong customer relationships are and judge end-to-end experiences.
It is still used by 83% of customer success departments for customer advocacy. And it’s a relevant customer experience KPI but we see this percentage going down in 2022.
Know more about NPS here.
5) Expansion MRR
Expansion Monthly Recurring Revenue (Expansion MRR) is the measure of how much revenue you are bringing in through expansions, cross-sells, upsells, and others. It is an important KPI to measure because you want to know if your expansion methods are working or if you need a different strategy.
Expansion MRR gives the percentage change due to expansions from the previous month’s MRR. It is simply calculated by using this formula:
|Expansion MRR % = [Expansion MRR at the end of the month- Expansion MRR at the beginning of the month]|
Expansion MRR at the beginning of the month
The Customer Success KPI benchmarks for companies
Companies’ customer success KPI benchmarks are churn, MRR churn, and the NPS and CSAT value. These values can deviate from your values especially if you just started implementing customer success.
- Customer Churn: 2-5% is the general standard
- CSAT: 80% is about the goal.
- Net Promoter Score (NPS): 50 is good.
- MRR Churn: below 1% for best-in-class companies
- Expansion MRR: offset MRR lost
- Net MRR Churn: Anything in negative territory is just perfect
In this topic, we have highlighted some Customer Success KPIs 2022. It is counterproductive to use dozens of them. The main thing is to choose between 5 and 10 and use them wisely.
Among these, we will have the opportunity to come back to the Churn rate, an essential indicator. If you are a SaaS company, you should understand that your success depends on following the following 4 steps:
Step 1: Clearly specify your goals
Step 2: Define the strategies that will help you achieve these goals
Step 3: choose the SaaS performance indicators that will allow you to check throughout the process if you are on the right track
Step 4: Plan for Action Variables. If you don’t have action variables, SaaS indicators are useless! They are the ones who will allow you to rectify the situation.
There are multiple intuitive tools that have come into the market that can help CSMs. CustomerSuccessBox is a leader amongst them in the customer success space. We built the all-in-one solution for customer success that goes beyond health scores and viewing portfolios – CustomerSuccessBox, an Outcome Driven Customer Success Platform for B2B SaaS businesses.
Learn more about CustomerSuccessBox!