customer success metrics

12 Best Methods for Customer Success Metrics

Customer Success Metrics guide you in determining the quality of your customer service. This method can help you to evaluate your business’s growth and improve it if necessary. 

You were doing a lot of strategizing. As a result, you will notice less about what is going on in your business. To understand what customers are experiencing, you can use Customer Success Metrics to determine whether the effort you are putting in is going upward or not.

Is this information necessary to know about the customer’s experiences with your product? Yes. When your customers are happy with your products, they suggest them to their friends and families. Without leaving this topic at the stage of knowing your customers are satisfied, you can research what makes them admire your products and wishlist.

Table of Content

Definition of Customer Success Metrics

A Customer Success Metrics tracks successive customer satisfaction and loyalty that correlates with revenue growth. Numbers are derived from customer feedback results to determine customer metrics.

Importance of the Customer Success Metrics

The Customer Success Metrics is mainly unknown, but it is crucial to monitor it. Here are some of the most important Customer Success Metrics:  

  • Monitoring metrics helps your business keep track and ensure that your customers are happy with your product.
  • By tracking how customers use your product and how they experience it, you can find out which areas your team has to improve in.
  • Analyzing Customer Success Metrics helps you to be aware of the customer’s interest in your product or if they are leaving or losing interest in your products.
  • Tracking customer sentiment helps you to steer product development. As a result, you can improve their satisfaction and loyalty.
Benefits of Customer Success Metrics

Measuring Customer Success Metrics

There are specific ways to measure the Customer Success Metric:

  • Customer relationship management: The salesforce is the leading platform used to display the percentage of customers who drop your product during a given time frame.
  • Customer Success Platforms: They can collect and analyze data. 
  • Net Promoter Score: It gives you feedback about your company’s performance.
  • Feedback forms: Feedback forms help you understand more about the customer’s experience and satisfaction with your products.
  • Customer Success Metric: You can have a conversation with your team as another way to help you. Take the number of customers who have left over a period of time, and divide it by the total number of customers in a year. Whether you calculate it monthly or annually, you can calculate your success metric.

Methods to Calculate the Customer Success Metrics

To help you find the customer success metrics, here are the twelve-measure formulas:

1. Churn Rate

The churn rate is also referred to as the customer attrition rate. It represents the percentage of customers who abandon your product during a specific time period.

For example:

  • Subscription canceled.
  • Account closed.

The Formula for the Churn Rate

Take the number of customers churned over a period of time, and divide it by the total number of customers in a year, whether you calculate it monthly or annually. 


                                                  Departing customers in a year
Customer Churn Rate  =      —-------------------------------------------    X  100%
			                                   Total users in a year 

Churn rate is one of the most important customer success metrics to determine how many customers are dissatisfied with your products. Based on this, you can change your strategies and entice the audience to admire your product again.

2. Revenue Churn Rate

The revenue churn rate tracks the dollar value rather than calculating the number of customers.

The Formula for the Revenue Churn Rate

                                         Value of churning users in a year
 Revenue Churn Rate = -----------------------------------------------   X 100%
                                         Value of total annual revenue

This indicates the revenue you lost, or gained, in the given period of time.

3. Monthly Recurring Revenue

Monthly recurring revenue helps you estimate and plan your business on a monthly basis.

The Formula for the Monthly Recurring Revenue

MRR = Monthly Average Revenue Per User X Number of Monthly user

4. Average Revenue Per User

The average revenue per user is also called the average revenue per unit. It represents the typical revenue generated by each user over time.

This provides a deeper insight into the following:

  • knowledge of the client
  • forecasting financial data
  • Comparison of competitors

The Formula for the Average Revenue Per User


                                                              Total Revenue 
 Average Revenue Per User =   -----------------------------------
			                                       Average User

5. Net Promoter Score

The Net Promoter Score examines the customer’s experience and satisfaction with your product. An NPS survey helps you understand the customer’s feedback about your product and services and bounce back to improve your product.

Related Reads

The Formula for the Net Promoter Score

To calculate the Net Promoter Score, conduct an NPS survey among customers. After the result, you have to group the survey scores. If the score is between 0 and 6, the respondent is classified as a detractor, between 7 and 8, a passive, and between 9 and 10, a promoter.

Net Promoter Score = "the percentage of promoters (minus) the percentage of detractors."

6. Customer Satisfaction Score

The customer satisfaction score measures how pleased your customers are with your products and services.  

The Formula for customer satisfaction score

Inquiring about your products with customers, and rating them as extremely satisfied or satisfied

                                                           The number of satisfied customers 
Customers Satisfaction Score  =  -------------------------------------------------    X 100%
			                                      Total number of responders 

7. Customer Onboarding Costs

Customer onboarding costs track the value of customers who are set up and trained in your product. 

The Formula for Customer Onboarding Costs

The number of training hours multiplied by the CSM’s hourly rate yields the cost of onboarding new customers.

8. Customer Effort Score

The customer effort score is how long it takes to resolve the customer’s issues. The data is collected through a survey.

Since it is generated through surveys, there is no fixed formula to measure the customer effort score.

9. Customer Health Score

The customer health score determines how much customers spent and how actively they used your product.

The Formula for the Customer Health Score

You can measure the customer health score by finding the frequency, and the time users spend on your product, the breadth (the number of users using the product in a specific account), and the depth (the key features).

10. Trial-to-Paid Conversion Rate

  Trial-to-Paid Conversion Rate helps to measure the customers converted from trial     

  users to paid users. This can be calculated monthly and annually.

The Formula for the Trial-to-Paid Conversion Rate

                                                        Trial customers that convert to paid
Trial-to-Paid Conversion Rate =	--------------------------------------------------  X100%
            				                             Total trial customers 

The TTP measurement aids in determining which features are most appealing to trial users.

11. First Contract Resolution Rate

Whether the first interaction with the customer is successful or not is determined by the first-contract resolution rate.

The Formula for First-Resolution

                             Resolution of first-contact calls
     FCR Rate =   ----------------------------------------------        X100%
                                   Total first-contact calls

12. Product Adoption Rate

The product adoption rate calculates the number of people who use your software regularly.

The Formula  for  the Product Adoption Rate

                                                New active users
Product Adoption Rate = ------------------------------  X 100%
				                       Signups

A churn occurs if the users are not active. Using this customer success metric, you can determine the rate of product adaptation that results in the user becoming active.

Frequently Asked Questions

1. What are customer metrics?

The rates of customer satisfaction, loyalty, and retention can all be tracked or measured using customer metrics.

2. In SaaS, what metrics measure customer success?

The customer success metrics for SaaS are monthly active users. This indicates that the user is actively using the website.

3. What is the most important metric for customer success?

The retention rate is the most crucial metric for measuring customer success.

Final Thoughts

The Customer Success Metric is similar to travel in that you are the pilot, and the customers are the passengers. As such, you must use the customer success metric to ensure that the customer’s experience is ideal and beneficial to your business. Use the previously mentioned measuring step to determine what works best for your workflow.

Similar Reads

If you found this article helpful then you probably can give our Content Marketing services a shot. We empower businesses that are on the lookout for impactful SEO results by developing & executing high-quality & SEO-conscioust will help you rank.
Book a Call

You may also like:

Leave a Comment