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How to do customer health scoring in 2021


“Your “happy” customers- are not the ones you never hear from or interact with, the ones that never complain or contact support- they’re actually the ones to be worried about. You don’t know if they’re successful”- Lincoln Murphy.

Customer Health Score

What is Customer Health?

Customer Health or Account Health is the data-driven way of measuring the customer’s overall engagement with your product or platform. It becomes an inseparable part of your customer success process once you grow from a small company to a large one. 


The huge customer base makes it difficult to reach out to every customer and thus, you can miss out on vital warning signs! Even if you reach out it would be tough to know, without a Health Score, whether your customers can achieve their desired outcomes. 

It’s important to gather your customer’s Health scores and ensure you’re taking every opportunity to recognize what makes them stay with your brand. Health Score acts as an early warning signal, encouraging you to take proactive actions. 

Customer Health

Why calculate customer health score?

Customer Health is not only about product adoption. There are various dimensions to the overall Customer Health than merely as to how a customer adopts your product.

A SaaS customer goes through onboarding, retention, and upsell. At every stage, you need some kind of a Health Score to evaluate the success of your customers and decide how you would engage with the account to get them successful in their job with the help of your product.

You need to know the signals which your Customer Health Score will send out to know the exact level of engagement (which must include the entire ecosystem like support, adoption, reporting, etc) and not just the communication with customers that your customer is having with the product. 

The early signs of increased friction or decreasing customer engagement can be monitored with the help of this score. Similarly, it will help you in identifying highly engaged customers, who would make wonderful advocates.

Most people think that product adoption is the only criteria. I understand it to be one of the very important criteria, however, you must have witnessed poor service and not touch base at right time with the right stakeholder. These are a few among several other reasons for churn.

The below-mentioned health signals and the categorization can help you with identifying the red flags in time which may, in turn, lead to low churn.

customer health signals

Billing: With a billing system, you get to know an account is in poor health via a cancellation request or a card removal or overdue invoice(s). But this is a lagging indicator as you come to know only when the action has already been taken by the customer.

Support System: You usually rely on a low CSAT score or complaints to know that the account is not in good health. You are relying on the customer becoming frustrated with your product so this is not an ideal signal.

Touchpoint: If a promoter becomes a detractor or there is a lack of engagement, it’s an indicator that the account needs more handholding. With this, you are still being reactive as there is no way you can predict if someone will become a detractor.

Product usage: Tracking things like low usage, low login frequency, declining active users, and even unmet outcomes can be a leading indicator of account health. This is where customer success technology comes in.

These warning signs are extremely crucial for a customer success manager to identify a problem and devise solutions for the situation. 

How do you calculate a Customer Health Score?

A Customer Health Score is a metric used by customer success teams to determine whether customers are happy and satisfied with your product/service or at-risk. Regardless, it should help product and customer success teams reliably assess the likelihood that a customer will grow, renew, or churn. 

Customer Health scores help customer success managers and service teams monitor their customer base. It provides them with the key information about a customer- whether s/he is at risk of churn or is losing interest in your product. 

 Before calculating a Customer Health Score you need to understand why do customer Health scores set up by CSMs most often fail?

There are various metrics, that your company deploys, which provide with you a score. This score is the measure or a value that indicates the long-term prospect for a customer. 

Let us look at the steps which will help you to calculate the Health Score.

Customer Health for you

The first step is to establish an aim for your customer health score. What do you want the score to tell you? Is it about churn or renewal or warning signs, etc.? You need to clearly state what your score will show and how this metric will help you in achieving customer success goals. This is an important step because the clarity of your goal will help you in understanding how you should be monitoring different parameters to accurately measure customer health.

Decide which metric are you going to use

The next step is to select the metrics you’ll use to evaluate customer health. There are different metrics that you can use, however, you should ensure that the selected ones accurately reflect your business goals. 

Any Customer Health Score should be comprised of metrics that are important to your company, product, and customers.

Some of them are mentioned below:

  • * Overall Product Usage
  • * Product Upgrades and Renewals
  • * Community Engagement
  • * Marketing Engagement
  • * Frequency of website visit
  • * Customer Support Calls
  • * Customer Feedback
  • * Product feedback
  • * Survey results

However, the metrics if categorized under different yet relevant heads give you a better understanding. The heads and the metrics mentioned below are examples of such categorization. 
The metrics, compiled together for the Health Score, will help you not only predict churn but also act as a leading indicator of the overall health of the customers and your entire portfolio.
For example- if a customer doesn’t log in for 10 days in a row, then there will be a ‘warning’ signal initiated by the system which will give you a heads up about, quite possibly, an impending churn. 
Hence, the metric should not only be relevant but should be comprehensive also. It means that it should consider all the aspects of Customer Health. Take the example of your health. One needs to take into consideration all the dimensions of your health like physical, emotional, financial, relationship health, etc. 
The same goes for the Health of a Customer.  We should consider other dimensions like Relationship, Service, Financial and Subjective opinions/External factors that will act as leading indicators.

These are some quantitative metrics that help a CSM to craft an overall Customer Health Score that brings in Predictability. 

Product Adoption Health:

Active Days: You should measure how frequently your product is being used.
Adoption of core-product features: The customer may not have to use all the features of your product. Just identify the core offering of the product and measure if the customer is using it.
Product Stickiness: Check how well integrated your product is with the customer’s ecosystem. Have you completed all the integrations? Are you a part of their internal process? Check out what is the correct way to measure Product stickiness?
While measuring product stickiness, the total number of active users is the truest measure of your product’s impact. Isn’t that right? 
Isn’t the traditional method of measuring product stickiness by (DAU) Daily Active Users & MAU (Monthly Active Users) method the perfect way to measure your product stickiness?
But I think that the percentage of features used by a customer should be the key to measuring the product. This is an important parameter that contributes to the overall Customer Health. 

Relationship Health:

Rapport: How good is your CSM’s rapport with the Decision Maker, Product Champion, Business users, Economic buyers? How is their relationship with the other departments and executives?
Frequency of communication: Do you have touchpoints with the customer every month or fortnight as per the pre-decided frequency?
Interaction with Customer: It’s important to keep track of your visits to the customer, Quarterly Business Reviews (QBRs), Zoom meetings, telephone calls you had, etc. These logs will help you determine if a customer is willing to talk to you and determine if they are getting value out of those conversations.

Service Health:

Support Tickets raised: How many support tickets have been raised?
Response to the tickets: Has your Support team resolved the critical support tickets on time?
Happiness Quotient: Is the customer happy with the response that they have received?

Financial Health:

Purchase History: What plan has the customer subscribed to? 
Invoice Due: Overdue invoices can be tracked easily. 
Upgrades/Downgrades: If the customer has upgraded/downgraded, purchased more licenses, canceled licenses, etc are some of the metrics which can be monitored regularly.

External factors

Positive confidence tags: If the customer is driving a case study with you, if they have referred anyone, etc.
The Risk Tags: Your champion has left the company, any specific threat to the company, any feature without which the customer may not be ready to go ahead.

Scoring System

Now, that the goals and the relevant metrics are in place, create a scoring system that measures your Customer Health Score precisely. 
The idea is to create a system that gives you an overall score that represents the metrics you opted for. If a customer is using your products and enjoys working with your business, they should have a positive score. If they’re dissatisfied and thinking about switching to a competitor, their score should alert them to that risk.

Categorization of Customer Data

Data collection would be your next step in the process of calculating the Health Score. Play around with different combinations of metrics until you’re confident with your scores. 
Once you have enough data on scores, you can start grouping the scores. The categorization differs for each business and brand. You need to do this depending on your business goals. “Healthy” and “Unhealthy” scores are common types of categorization. 

Visualize Customer Health Score

By bringing your health score into your CRM, you’ll get a holistic view of your customer as you’ll see the score in context.
This will help you to improve the score of an unhealthy customer and give you the ability to be able to track the most powerful impact so you can replicate that experience for your amber and red customers.

What is a Customer health 360 view ?

You, now, understand the importance of a Customer Health Score for your SaaS business, right? 

The traditional form of Health Score was calculated as a single score. However, health never comes in one shape and form. As mentioned before, there are multiple dimensions to health. Applying it back to the health of an account, a single customer health score is a deception.

Why, because it leads to results like

  • Confused success teams-  they don’t know what to look at, why, and which outcome to drive for.
  • Complex configuration- you’re either expected to know the complex formulas or supposed to make do with the averages.
  • False positives and negatives all across- Team has low confidence in scores and missed opportunities. 

Hence, the need for a comprehensive picture led to the ideation of the concept of the customer 360 views. 

This refers to a 360 view of a customer’s data including every interaction, from product usage, the financial status of an account, touchpoints maintained and tracked, high-level risk score, segment level health to the efficiency and the effectiveness of the customer support system. 

The reason behind the concept of Customer 360 is to model a complete and precise picture of every customer by collating each customer’s structured and unstructured data from across your company. With these comprehensive data points and knowledge, you can create amazing customer experiences, customize interactions with your customers, and get powerful customer insights.

There are various benefits accrued to your customers and your business as a result of the adoption of Customer 360. 

  • Timely & Accurate information about Customer Engagement
  • Seamless Experience for you and your customers
  • Customer Segmentation 
  • Deep Insights into Customer behaviour
  • Predictive Analytics and Mapping

Pro tip: Best practices for configuring a customer Health score (and why a single Health score fails)

The following are CustomerSuccessBox tool’s Account Health 360 features summarized:

  • * Product Adoption: Measures product usage and lets you define thresholds for good and poor Health
  • * Financial: Measures the financial status of an account using subscription and invoice information available with us
  • * Service: Measures the efficiency and the effectiveness with which the support team handles customer issues
  • * Relationship: Measures how frequently contact is being established through touchpoints maintained and tracked in CustomerSuccessBox. Touchpoints are maintained using 2-way Gmail integration, Support interactions, Calls, Emails, and Logs for offline events.
  • * High-level risk score and human context
  • * Segment level Health

Account 360 feature

Customer Health Scorecard

A customer health scorecard helps a customer success manager (CSM) to make an informed decision based on real-time data. 

Integrating all the mentioned earlier metrics, the health score can provide you with three types of results: 

* Green Customer – All the conditions set or the formulas applied for the relevant metrics of product health, financial health, relationship health, etc. are fulfilled.

* Yellow Customer – Customers in this category meet only some of the criteria but not all of them. Taking notice of these clients is imperative. 

* Red Customer – The customer is flagged as “attention required” in at least one of the categories. The reasons could be many. Timely identification of these customers is crucial as you can prevent them from turning into detractors of the company.

Customer Health Scorecard

Best Practices for configuring a Customer Health Score

The Health Score which you create must be able to give you warning signs, should’ve leading indicators and should be able to validate specific outcomes. 

Best practices for configuring Customer health score

Simple configuration:

  • * Right metrics in the right dimension.
  • * Prefer leading indicators.
  • * Follow a simple risk strategy
  • * A good score must be specific and should consider all signals combined.
  • * Poor score must be broad and should consider each churn signal separately.

Act on it:

  • * You should know instantly which dimensions need work and should be aware of your strengths when engaging with a customer.
  • * Do a quick lookup of leading metrics to understand what exactly is going wrong.
  • * Take proactive actions to overturn the health score. Rinse and repeat until the score is ‘Good’.

Correct the course:

  • * Refresh your configurations periodically based on new learnings. We recommend revisiting health score calculations every 3 months.
  • * Adjust rule thresholds to identify and focus on retention first.

Bucket accounts for a more accurate health score:

There are three primary strategies to segment accounts for a more accurate health calculation.

  • * Bucket by the desired outcome.
  • * Bucket accounts by the purchased plan.
  • * Bucket accounts by lifecycle stage

Watch this webinar, if you’d like to learn more about the Health Score and the importance of Artificial Intelligence in developing the score in detail. 

AI (Artificial Intelligence) and ML (Machine Learning) are the technological advancements that, if utilized optimally, reduces the pain and effort of a CSM in delivering customer satisfaction.

CustomerSuccessBox’s Sheldon [AI] analyses historic CSM actions, customer’s product adoption, and engagement behavior to learn (& recommend) what leads to renewal/churn/upsell.

Of course, Sheldon can be a game-changer for you as the AI-powered platform generates recommendations for CSMs for every Account and gets you ahead of the game.

Similarly, Customer Health Score provided by this technology is reliable, relevant, and gives actionable insights to improve customer experience. 

Customer Health Dashboard

It is simply the representation of the overall account health of the customer in one place. The pictorial display of all the metrics related to a Customer Health Score makes it super easy for a manager to monitor business health as well.

A Customer Success dashboard gives you revenue insights into every facet of the customer journey.

Monitor your customer score with CustomerSuccessBox’s dynamic dashboard!

Customer Health Dashboard


It is evident now that Customer Health Score must be an integral part of any Customer Success initiative. Also, it should be relevant to the business. A Customer Health Score is always a work in progress. You might see that what works today won’t be relevant in three months. Always be ready and prepared to adapt and respond to customer and employee feedback throughout the whole process.  

After setting up your Customer Health Score metric, it’s vital to give it a few weeks otherwise it might be tough to track how well it is doing. There is nothing like frequent changes to mess up a sensitive metric like this one. 

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