The Ultimate Cheat Sheet to Customer Success
Churn is one of the most vital metrics that need to be evaluated accurately by a business (especially B2B SaaS). This measure can show you the true picture of customer loss and subsequent revenue loss of your business.
MRR (Monthly Recurring Revenue) churn
It is the percentage of monthly revenue loss that you’ve incurred from your churned customers. This can happen if your clients downgrade to an inexpensive product or a lower subscription pack.
Logo ( or customer) churn
It is a vital metric used by SaaS or subscription businesses as input to the holistic health of the business. SaaS investors are more concerned with logo(customer) churn and they rely upon the measure to analyze LTV (customer lifetime value) calculation.
How to calculate the adoption rate and its impact on customer LTV?
4 customer onboarding metrics for SaaS companies
The ultimate guide to Customer Retention
What is customer success and 7 metrics to help you do it right in your business?
Customer Experience Metrics
Net Promoter Score (NPS)
Net Promoter Score is an important metric, but do not solely rely on this for your early warning system. What can make this even more interesting will be to see NPS not just at a product level, but also at an Account level. So essentially you’re calculating NPS for each of your customers with multiple users.
Promoters- (customers who score 9/10)
Detractors – (customers who score 0-6)
Customer retention Metrics
There are plenty of customer retention metrics that are crucial for your business to keep track of.
Retention (Renewal) rate
This measure indicates the rate at which your customers have renewed their contract with you.
Gross Retention Rate (GRR)
GRR measures your ability to retain customers over a while. GRR is a representation of your success in retaining your existing customers.
Net Retention Rate (NRR)
NRR takes into account the total revenue earned minus any revenue churn (caused due to departing customers or customers who have downgraded) plus any revenue gained through upsells or cross-sells.
Repeat Customer Rate (RCR)
It measures the percentage of customers eager to make a second purchase from you. This metric is a pretty good indicator of customer loyalty. The higher this metric is, the more inclined the customers are to make the next purchase from you.
Customer Acquisition Cost (CAC)
CAC is an important metric because it calculates how much you’re spending on new customers.
Customer Lifetime Value (LTV)
LTV measures how much money is generated by a single customer. It is the customer’s lifetime value or, simply put, a measure of how much revenue a customer would spend throughout his/her tenure with the company.
Customer Onboarding Metrics
Time to Value
The time it takes for your customer to obtain value from your product/service. The shorter the onboarding period, higher is the probability of customers renewing the contract.
Measure how your customers are engaging with your product. Don’t wait for the onboarding process to get over to figure out whether the customers are going to use the product or not.
Specific Data Analysis
The beauty of a customer success platform is that you can drill down on the abundance of the data that is already being monitored to gain valuable insights about the customers. Data analysis will help you understand each customer’s specific problems. Analyzing the data can tell you what all the things you need to improve.
Milestones are the stepping stones that a customer has to go through before they can achieve their goals. These are not just time-bound tasks for the customer, but also for a CSM as it is the responsibility of the CSM that when a customer completes the milestones, the product adoption should also increase.
Customer Engagement Metrics
The ultimate goal is to measure how successful you’ve been at onboarding, getting people to use your application and how well do they actually adopt the product.
This metric is similar to the product access model, but feature usage is more about determining actionable next steps. You can measure the number of times a feature is accessed per day/week/month.
This metric helps understand customer adoption by determining the time a customer spends using your product. It also allows you to determine an overview of how much time the average user spends with the product per login.
Customer Revenue and Cost Metrics
Average Revenue Per Account (ARPA)
It is the average amount of revenue per customer or revenue generated per account measured in a defined period of time usually in months or years. It is useful for the analysis of a company’s revenue generation and growth at a per-unit level that helps in classifying high and low revenue products.
Customer Retention Cost (CRC)
It is the sum of expenses a company undertakes usually in the form of technical support to keep and cultivate its existing customers. Calculating CRC involves the addition of all the costs necessary for customer retention and engagement.
It can also be measured as –
It is used to measure the amount of additional recurring revenue obtained from existing customers through add-ons, upselling and/or cross-selling. Expansion MRR generation is valuable for long-term profits and growth as it costs less than acquiring new customers. It indicates that the customers are receiving more value and the product’s usage is increasing. A good Expansion MRR rate usually indicates that you have a negative revenue churn rate, i.e., the revenue collected from the existing customers is more than the revenue lost to the ones that churned out.
Customer Health Score
Customer health score predicts a customer’s probability of churning out from the company by providing an insight into a customer’s account. It allows the company to be proactive and take the required steps based on the Customer Health Score. It usually consists of many smaller metrics that help determine the current condition of the account.