The ultimate guide on customer health score

There’s a whole hype around the scores a CSM must keep track of.

Some of these include net promoter score (NPS), customer happiness index (CHI), customer health score (CHS), and more.

I have detailed a list of key metrics to keep in mind as a CSM, but in this one, I’d like to focus on just one - CHS. Why? Let’s find out!

What Is A Customer Health Score?

As you may have guessed, a customer health score indicates how well an account/customer is being managed - overall engagement and the indication of not being derailed from the success metrics defined by the customer.

Now, what does this health include and how is this score arrived at? Let’s break it down and take a look at this.

Why Is A Customer Health Score Important?

There’s no better way to say this than keeping it direct - Identity> Track > Discover

1. Identify at-risk accounts

2. Track opportunities for upselling

3. Discover areas where customers might need additional support

How To Calculate /Measure Customer Health Score?

Calculating a customer health score involves aggregating various metrics that reflect customer engagement, satisfaction, and success. Here are some of the most common ones:

1. Product Usage

How often is the customer using your product? Are they utilizing key features?

2. Customer Support Interactions

How frequently does the customer contact support? Are their issues being resolved promptly?

3. Customer Satisfaction Surveys

Scores from NPS, CSAT, or other surveys can feed into the CHS.

4. Financial Metrics

Is the customer renewing their subscription? Are they purchasing additional products or services?

5. Customer Feedback

Qualitative or quantitative - direct feedback from the customer, whether through surveys or conversations, can provide directional insights.

6. Adoption Rates

How well/fast is the customer adopting new features or products you introduce?

As a customer success manager, we must understand and align these metrics based on our product or the nature of the account we engage with. Each organization may weigh these factors differently based on their specific priorities.

The combination of these metrics, which are driven through success conversations, results in a score that reflects the customer's overall health.

Tips For Improving Customer Health Score

1. Regular Check-ins

Schedule regular meetings with your customers to understand their needs, challenges, and goals.

2. Personalised Onboarding

Ensure that your customers have a smooth onboarding experience tailored to their unique use case.

3. Proactive Support

Don’t wait for customers to reach out with problems. Use data to anticipate their needs and address potential issues before they arise.

4. Training And Education

Provide ongoing training resources, webinars, and documentation to help customers maximise the value of your product.

5. Gather Feedback

Regularly solicit feedback and act on it. This shows customers that you value their input and are committed to improving their experience.

6. Cross-Functional Collaboration

Work closely with sales, product, and support teams to ensure a seamless customer experience. Each department’s input can help refine the CHS and improve overall customer health.

An easy example of understanding customer health score easily -

Let’s consider a hypothetical example of a software-as-a-service (SaaS) company called KAMFlow that provides a key account management solution to businesses. One of KAMFlow’s customers, Acme Corp (let’s not forget our dear Acme Corp), has been using the platform for a year.

The customer success manager assigned to Acme Corp regularly monitors their customer health score to ensure they are on track to meet their key account management goals.

Success Metrics Defined Jointly By The Teams

1. Uncover Relationship Blindspots

Acme Corp aims to build intelligence around stakeholder relationships by 20% using KAMFlow’s relationship map feature.

2. Accelerate Deal Velocity

The goal is to improve opportunities by 30% through better whitespace identification and areas for growth.

3. Preserve Tribal Knowledge

Acme Corp wants to preserve corporate intelligence by being the one-stop shop for all your account planning info.

So, if you’re ready to harvest some healthy customer relationships? Keep an eye on that customer health score, and you’ll be reaping the rewards in no time!

How The Customer Health Score Reflect These Metrics?

1. Product Usage

Acme Corp’s team logs in daily and regularly uses key features such as org charts created, account profiles built and events and tasks planned. High usage indicates they are actively engaging with the platform.

2. Customer Support Interactions

Acme Corp has had a few support tickets related to specific features, but these were resolved quickly. The low frequency of issues and quick resolution times contribute positively to their CHS.

3. Customer Satisfaction Surveys

Acme Corp recently completed an NPS survey, giving KAMFlow a score of 8, indicating they are satisfied with the product but see room for improvement. This feedback is a neutral factor in their CHS.

4. Financial Metrics

Acme Corp has renewed their subscription and is considering upgrading to a higher tier to access additional features, indicating a healthy financial relationship.

5. Adoption Rates

The customer is actively adopting new features, such as advanced reporting tools, that were introduced recently. High adoption rates positively impact their CHS.

6. Customer Feedback

In recent check-ins, Acme Corp expressed satisfaction with how KAMFlow is helping them improve deal win rates and boost AM productivity, though they would like more training on advanced features.

Overall Customer Health Score:

Acme Corp has a strong CHS based on these factors, indicating they are successfully meeting their goals with KAMFlow’s help. The CSM notes that while Acme Corp is generally satisfied, there is an opportunity to provide additional training on advanced features to further improve their productivity and possibly increase their satisfaction score.

What This Score Indicates:

1. High Engagement

Acme Corp is actively using the product, which suggests they are finding value in it.

2. Alignment With Success Metrics

The CHS reflects that Acme Corp is on track with their success metrics, such as improved relationships with stakeholders and going from reactive to proactive planning.

3. Proactive Opportunities

While the CHS is healthy, the feedback about wanting more training indicates an opportunity for the CSM to provide additional resources, which could further strengthen the relationship and lead to potential upsell opportunities.

So, if you’re ready to harvest some healthy customer relationships, keep an eye on that customer health score, and you’ll be reaping the rewards in no time!