An account health score is a value that indicates the long-term prospect for a customer. A SaaS customer goes through onboarding, retention, and upsell. At every stage, you need some kind of a health score to evaluate the status of the account and decide how you would engage with the account to take it ahead in the journey. Most often, the customer health score, set up by a Customer Success Manager, fails. To understand why that happens, you need to look at some of the following factors.
Account Health is the data-driven way of measuring who’s getting value and who’s not, who you need to pay attention to, who might be at the risk of churning, and who on the other hand, might be sitting on an opportunity where you can not likely upsell.
Read Best practices to calculate health score.
So it’s clearly data-driven, and you must have configured it in a way that makes sense to you. But one question which has always come up again and again is what should be the lookback period.
So you might be using a homegrown analytics tool, or maybe Customer Success technology such as CustomerSuccessBox to calculate it. Now, what should be your lookback period and when should you start calculating account health? What I mean by lookback is, Account Health needs to be refreshed everyday, that’s given. It’s getting refreshed every day but that does not mean that it is actually giving you the latest true indicator, it actually depends on how well you’ve configured it.
For example- For an account to be in good health they should have started the project or they should have started more campaigns that should have started adding new users, or whatever your technology enables your customers to do, and the look back period could be one day, one week, one month, 90 days or even a year. It would entirely depend upon what your product solves.
Suggested Read: The essential guide to customer health score
Now, the key point, you want to note here is that the longer the look back period, more likely, or longer, you can likely be in a false positive. So for example, if the customer was using the product effectively, let’s say in a look back period of 90 days. And on the 90th day you might still be getting a very good health of that account, whereas in the last 89 days, the customer might have simply stopped logging in. So you want to keep that look-back period, as narrow as possible.
You definitely don’t want to, typically in a B2B scenario, to keep it as one day because when you do that pretty much every weekend is going to go haywire, over holidays, weekends or when somebody is on vacation, it’s going to give you false positives.
So, what we really want is to balance it as the shortest period possible. Typical approach is about two weeks, but it can very well depend from customer to customer. You might have seasonality and your technology might require customers to come in, only once a quarter, and this might be in a set it up and the system works on its own.
Bonus Tip: Crafting an overall Customer Health Score that brings in Predictability
So whatever your case may be, you want to, in that case then have reasons, which influence health for a long period. You want to know why the customer health score fails most of the time. If you have to go with a longer lookback period, you do want to have some shorter notices or some shorter periods for simple things like logging in just to make sure that you’re not stuck in the false positive for a very long time.