Alternative CS Metrics

Options
Brian Hansen
Brian Hansen Member Posts: 75 Expert
5 Insightfuls First Anniversary Name Dropper

We all know NRR and GRR, NPS and CSAT. We also know adoption metrics. If you were to remove all of those as options and needed a different metric to show the impact of CS both with customers and internally to executives, what suggestions might you have?

I was asked this question today and I came up with a few below ideas. How do these resonate for you and might you have alternatives?

  • Customer Score - This could be comprised of a few factors, but namely in my mind is a) certification of specific Outcomes, Measurements of Success and quantifiable ROI milestones and b) decision maker-specific NPS
  • Customer Margin - specifically around allocating the proper amount of time to the right customers, which can tie into data related to ICP. Meaning, "Our CSMs are spending the right amount of time with good-fit customers and identifying bad-fit customers to help our GTM teams identify a tighter ICP
  • CS Qualified Value Opportunity - This one is a bit of a wild card. The idea here is that we could quantify when CSMs identify, document and bring to completion (via increased adoption), a new opportunity to improve product adoption at a deeper level in the customer's workflow. For example, the CSM sees low LCAI or Plan Set usage and leads a plan that improves the adoption of those products. That new-found adoption stretches us farther out within the customer workflow, helping the customer and making us stickier.

Thanks for any feedback!

Comments

  • tejash_24
    tejash_24 Member Posts: 23 Navigator
    5 Likes First Comment 5 Insightfuls Name Dropper
    Options

    @brain here is what you can consider apart from what you have already mentioned

    1. Referral Rate:How many new customers are acquired through referrals from existing customers.

    2. Social Media Engagement: Tracking mentions, shares, and positive sentiment on social media platforms.

    3. Case Studies/Testimonials:The number of customers willing to participate in case studies or provide testimonials about their positive experiences.

    4. Community Engagement: Participation in user forums, discussions, or events related to your product/service.

    5. Customer-Driven Innovation:The level of involvement customers have in suggesting improvements or new features.

    Internally, showcasing the impact of Customer Success could also involve:

    1. Customer Lifetime Value (CLV) Growth: How the efforts of the CS team contribute to an increase in the CLV over time.

    2. Customer Churn Reduction: Highlighting the decrease in churn rates attributed to proactive customer success strategies.

    3. Time to Value:Measuring the time it takes for customers to achieve their desired outcomes after onboarding, indicating the efficiency of CS efforts.

    4. Expansion Revenue:Tracking revenue generated from existing customers through upselling or cross-selling efforts driven by the CS team.

    These metrics not only exhibit the value of CS but also its role in revenue generation, customer retention, and fostering long-term relationships.

  • Brian Hansen
    Brian Hansen Member Posts: 75 Expert
    5 Insightfuls First Anniversary Name Dropper
    Options
    Thank you, @tejash_24! These are great and much appreciated. I will put these into the mix. 
  • Andrew Shoaff
    Andrew Shoaff Member Posts: 25 Thought Leader
    5 Likes 5 Insightfuls First Anniversary Photogenic
    Options

    Brian,

    Hey buddy. I'll echo Customer Lifetime Value (CLV). That more than anything else is really a statement of the long term viability of your company, and it's largely influenced by the CSM role. CLV is board level metrics and putting CSMs to that number brings alignment from the board room down to the trenches.

    It would be interesting, if you are looking to create something you can show to customers, to think about Customer Effort. Customers wouldn't necessarily have any context to it and they probably don't care if your number is high than an industry average. But you could use it as a proof point to show customers that you are improving their experience. Customer Effort goes way beyond CSMs - Support, Cust Ed, Professional Services, Billing, etc, all contribute. But putting the metric to CSMs would really force CS to be the company wide advocate for easing customer pain points.

    Hit me up if you want to chat in more detail.


    Andrew

  • Ed Powers
    Ed Powers Member Posts: 186 Expert
    Photogenic 5 Insightfuls First Anniversary 5 Likes
    edited November 2023
    Options

    If the goal is to show the impact of CS internally with executives, I've learned working with my CCO and VP CS clients that two messages resonate most often:

    1. Results of revenue retention, growth, and company valuation with CS compared to without CS, including the function's ROI. This type of analysis is best suited for the CEO, CFO, and board and justifies continuing investment using the terms they use and care most about.
    2. Portion of total revenue retention due to factors CS affects in comparison to what it doesn't. This provides context for the CEO and senior executive team and helps trigger enterprise-wide improvement in products, services, and processes.

    In the first case, one can make an intuitive argument or prove CS impact empirically. I shared suggestions for how to do this on a RevSetter webinar along with Mikael Blaisdell, Amy Mustoe and Frank McCracken earlier this year. While an intuitive approach will often suffice, randomized controlled experiments provide incontrovertible evidence.

    In the second case, quantifying churn reasons directly from customer feedback and showing analysis with a Pareto chart shows the impact of upstream failures in multiple internal functions and cross-functional processes. In technology companies, typically 60-70% of the churn reasons relate to product issues, 20-30% business relationship issues, and 5-10% issues over which the provider has no control. In addition to lost revenue and valuation, quantifying all the hidden--and stagging--total costs of churn creates an even stronger business case. When a CEO understands the magnitude and root causes of churn, and is motivated to do something about it, then a VP CS or CCO can play a crucial role helping them bring about transformative change.

  • Brian Hansen
    Brian Hansen Member Posts: 75 Expert
    5 Insightfuls First Anniversary Name Dropper
    Options
    Thank you, @Andrew Shoaff and @Ed Powers!
  • Brian Aherne
    Brian Aherne Member, CS Leader Posts: 12 Navigator
    First Comment 5 Likes Name Dropper Photogenic
    Options

    Hi Brian,

    I have 2 key metrics.

    1. Usage, if they aren't using the product then there is a problem.
    2. Quality of the usage, is the customer making the most of the product and getting recurring impact?