We've gotten a number of questions that relate to this from CEOs and Board Members.
Help us round out an answer that takes into account multiple perspectives.
I agree that net and gross retention are crucial metrics. But shouldn't those be metrics for the company as a whole, not just the CS team? There are so many factors outside of CS that factor into those metrics.
I agree with the metrics above, but came across an interesting article from Octopus Ventures about how these are all wrong and enterprise B2B SaaS should take small churn rates for granted and focus on aggressively expanding the value of contracts -- controversial!
https://medium.com/octopus-ventures/the-missing-magic-metric-for-customer-success-62d58defb13b
Curious to hear the thoughts of the GGR community
We look at different metrics in the lifecylce of a client: 1. MRR trained in first 30 and 90 days per CSM 2. Renewal Rate (annual clients)4. Training feedback scores5. Net Churn 6. And in special again to Expansion revenue (even though is part of 3).
I think in the simplest terms for us it would be;
Customer Satisfaction Score (CSAT) and Net Promoter Score (NPS) are not as heavily used presently as we find that their are so many factors outside of the CS team that feeds into these indicators.
@Samma Hafeez mentioned it briefly, but focusing on whitespace expansion and upsell metrics (beyond net retention) is a great indicator to show the value of the CS organization as a whole. Expansion into additional customer units shows brand adoption and satisfaction with the purchased products. An upsell into additional products displays customer confidence with your brand to provide the products they need to be successful.
I assume you are looking at the whole enchilada a CS leader is responsible for, not each CSM.
With the startups I accompanied through their growth I have seen the following progression as they mature through the B,C,D, ... rounds of funding:
First it's logo retention, as a company is building a retention base. CS is a cost center and focus is on establish success despite the capability gaps which may exist
As the customer journey congeals around a common path, and the processes and playbooks standardize, Net Revenue Retention (and unfortunately still NPS) become the next focus for the Board.
The final stage is Net Profitability, considering the initial CAC as well as the cost to renew, upsell, or cross-sell a $ of revenue. Once here, it's analyze, optimize, tune, refine, analyze, optimize, tune, refine, analyze, optimize, tune, refine,... to get the last % points out of each sub cluster
Obviously depends on the industry, stage, maturity, and size of the team & company, but here are some measurements I believe are very impt and incentivize the right set of actions:
I could name several more, but these have resonated with my teams over the years. Hope this helps!