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Customer success is the foundation of any business success. Customer success metrics are crucial for evaluating your products or services’ performance. This aids in your understanding of how customers perceive your brand. As a result, help you to enhance client satisfaction and increase sales.
Take the example of a SaaS provider of a project management tool. The company examined its customer success metrics. They found that a sizable portion of their clients was terminating their subscriptions.
Why?
They found the tool too complex to use.
In response, the company revamped the user interface and launched a series of webinars. The purpose of this was to make the product usage instructions more clear to the users. These measures resulted in a drastic cut in client churn rate and increased satisfaction.
This serves to highlight the significance of customer success metrics. It demonstrates how they might aid in enhancing customer satisfaction and retention.
Your customers’ success is as important as the success of your morning coffee. Like a good cup of joe, analyzing customer success metrics requires a delicate balance of art and science.
I’ll show you how to brew a winning formula for analyzing customer success metrics in this guide. A practice that will leave your customers satisfied and your business thriving.
In this user-friendly guide, we’ll take a deep dive into the following:
Customer success metrics are a set of performance indicators that measure the effectiveness of your customer success strategy. These metrics monitor consumer involvement, loyalty, retention, and general satisfaction with your offerings.
You can determine where there is room for improvement by examining these metrics. Consequently, make data-driven decisions to improve the customer experience and foster customer loyalty.
Customer Churn Rate is the percentage of customers who cancel their subscriptions. Or stop using a product/service within a given period.
Here is the formula;
Customer Churn Rate=(Customers who churned during the period )/(Total customers during the period)—100
Monthly Recurring Revenue (MRR) is the predictable monthly revenue that a business can expect to receive. Subscription-based businesses like SaaS companies use MRR to measure their financial health and revenue stability.
To calculate MRR, multiply the total number of customers by the average revenue per customer per month.
MRR = Total number of customers x Average monthly revenue per customer
The Average Revenue Per User (ARPU) is the amount of money made from each user. It provides insights into consumer behavior, income generation, and marketing effectiveness. ARPU helps businesses estimate client lifetime value, evaluate pricing models, and optimize marketing campaigns.
To calculate ARPU, divide the total revenue by the total number of users.
ARPU=(Total revenue )/(Total number of users)
Net Dollar Retention (NDR) measures the growth or shrinkage of recurring revenue over a defined period. It considers customer expansion, negative churn, and downgrades to provide insights into customer retention and engagement. NDR is essential for evaluating a company’s long-term success and growth rate.
To measure NDR, follow these steps;
Here is the formula;
NDR=((Starting MRR + upgrades — downgrades — churn) )/(Starting MRR)—100
A good benchmark for NDR is a rate of at least 100%. This indicates the company is growing revenue from existing customers.
NPS is a customer loyalty metric. It measures the likelihood of customers recommending your offerings/brand to others.
To measure NPS, you ask your customers the following question;
“How likely are you to recommend our product/service to others?”
Based on their responses, you classify customers as promoters, passives, or detractors. Then you calculate the NPS score by subtracting the percentage of detractors from the percentage of promoters.
NPS score = % Promoters – % Detractors
Customer Satisfaction Score (CSAT) measures how satisfied a customer is with your product or service. Measuring CSAT is crucial for improving customer experience, enhancing customer loyalty, and reducing customer churn.
CSAT is typically measured through customer feedback surveys. These surveys ask customers to rate their satisfaction on a scale of 1-5 or 1-10.
To calculate the CSAT score, divide the number of satisfied customers by the total number of responses. Then multiply the result by 100.
CSAT Score=(Number of satisfied customers )/(Total number of responses)—100
Conversion rate is one of the key customer success KPIs. It measures the percentage of users who have completed a desired action, such as making a purchase. It is essential in digital marketing to evaluate website traffic performance, marketing campaigns, and conversions.
To calculate the conversion rate, divide the number of conversions by the total number of leads. Then multiply it by 100.
These are the different formulas for calculating conversion rates;
The best formula depends on how you measure traffic and the specific conversion goal.
The Customer Health Score (CHS) measures a customer’s overall involvement and contentment with your business. It predicts whether customers will grow, remain stable, or churn.
To calculate the Customer Health Score (CHS), follow these steps;
CLV is the amount of money a customer will spend during their entire relationship with your business.
To calculate CLV, multiply the average revenue per customer per year by the average customer lifespan.
CLV = Average revenue per customer per year x Average customer lifespan
Customer Retention Cost (CRC) is the total cost incurred by a business to retain a customer. It includes all costs associated with customer success, customer service, and marketing to existing customers.
CRC is one of the key customer success KPIs for businesses relying on recurring or subscription revenue. It can help you decide how to price your services and specific features to increase profit margins.
To calculate CRC, first, add all the costs associated with retaining a customer. Then divide the sum by the number of active customers.
The formula for calculating CRC is:
CRC=(Retention Expenses )/(Number of active customers)
Qualitative customer feedback offers extensive insights into why customers hold certain perspectives about your product or service. It is subjective and focuses on the quality of non-numerical data to provide insights into underlying issues.
Qualitative feedback is good for collecting contextual data. It is typically used to understand the customer experience, identify areas of improvement, and innovate product offerings.
FCR measures the percentage of customer issues resolved on the first contact with customer support. This metric might be more inclined toward customer service than customer success. However, how customer support solves a problem plays a role in product usage success.
Keep track of the number of customer issues or incidents a customer support agent has successfully handled on the first try. Then divide it by the volume of client complaints or incidents received. To obtain the percentage, multiply the outcome by 100.
Customer Effort Score (CES) measures how easy it is for a customer to interact with your business. Or get their issue resolved. It aims to understand the ease of customers’ experience. CES is also a good indicator of customer loyalty.
To calculate the Customer Effort Score (CES), follow these steps;
“The company made it easy for me to handle my issue.”
Here is the formula;
CES Score=(Total sum of responses)/(Number of responses)—100
We have exhausted the essential customer success KPIs. Now let’s learn how to measure them and analyze the data in Excel.
First, determine your business’s relevant metrics and set up a tracking system. Depending on the metric, you may need to do any of the following;
Combine quantitative and qualitative data to get a holistic picture of customer success. Also, it is essential to review and analyze customer success KPIs regularly. This will enable you to spot patterns and potential improvement areas and adjust your strategies accordingly.
Business is about customer acquisition, acquiring customers, and ensuring their satisfaction with your offerings. Thus, tracking and analyzing metrics for customer success to ensure your efforts are meeting your goals is essential. And what better tool than Excel, the world’s most widely used spreadsheet software?
But with so much data to sift through, it can be overwhelming to know where to start.
That’s where ChartExpo comes in.
Why ChartExpo?
Let’s say you conducted a customer survey and obtained the data below.
| Question | Rating | Responses |
| How likely are you to recommend our software to a friend or colleague? | 0 | 33 |
| How likely are you to recommend our software to a friend or colleague? | 1 | 40 |
| How likely are you to recommend our software to a friend or colleague? | 2 | 36 |
| How likely are you to recommend our software to a friend or colleague? | 3 | 43 |
| How likely are you to recommend our software to a friend or colleague? | 4 | 39 |
| How likely are you to recommend our software to a friend or colleague? | 5 | 39 |
| How likely are you to recommend our software to a friend or colleague? | 6 | 42 |
| How likely are you to recommend our software to a friend or colleague? | 7 | 74 |
| How likely are you to recommend our software to a friend or colleague? | 8 | 67 |
| How likely are you to recommend our software to a friend or colleague? | 9 | 144 |
| How likely are you to recommend our software to a friend or colleague? | 10 | 260 |
Let me show you how to use ChartExpo to create a visualization and glean insights from the data.
3. Choose ChartExpo and click on the Insert button.
4. Select the CSAT Score Survey Chart from the chart list.
5. Select the data from the sheet and click the “Create Chart From Selection” button.
6. ChartExpo will generate the visualization below for you.
7. The default setting for the CSAT Score Survey Chart includes Grid Lines. Click the “Settings” button on the top bar to remove them.
8. Adjust the Opacity setting to 0 in the Chart Settings property window.
9. Click the “Apply” button to remove the Grid Lines.
10. Your final chart will resemble the one shown below.
Customer success KPIs are measurements businesses use to assess achievement in obtaining customer success. They provide information about customer satisfaction, loyalty, and retention. They also assess the worth that customers place on a product or service.
The most important customer success metrics include the following;
The metrics you choose depend on your specific customer success objectives.
Use the various customer success metrics to measure the effectiveness of customer success, such as;
These metrics provide insights into customer success and help you make improvements accordingly.
Customer success is responsible for the following metrics;
Customer success metrics are essential for businesses of any kind. From startups to multinational corporations, the significance of these KPIs cannot be overstated. They offer a wealth of information on how customers perceive your business. And how they interact with your products or services.
Customer success KPIs monitor consumer involvement, loyalty, retention, and general satisfaction with your offerings. You can determine where there is room for improvement by examining these metrics.
The secret to a successful business is monitoring the metrics that will give valuable insights for decision-making. This necessitates you employ the power of data analytics.
Customer success KPIs are only as useful as the tools you use to track them. That’s why picking the correct set of tools for data analysis is so important. Excel can be an efficient data analysis tool. But, it lacks some features that would facilitate seamless data analysis.
The perfect solution to this problem is ChartExpo for Excel. With ChartExpo, you can seamlessly analyze your data and take action as needed. ChartExpo allows you to create insightful visualizations for your data. Consequently, glean valuable insights from the visualizations.
Don’t wait. Try ChartExpo today to enjoy the benefits firsthand.
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