Daniel* is a CSM and he loves it. Every morning, he enters his office with a smile.
Monday, 10am: Boom! Something happened during deployment, causing a downtime. Red alert messages all over the Slack channels, pressure is rising…
One of Daniel's big customers is impacted. He needs to move fast, take immediate actions:
- Communicate to the customer that “we’re on it”
- Check that the status page is updated
- Ask R&D about the fix deployment status while emphasizing the impact on customers, etc.
Hold on! Let’s press pause for a moment…
At this point, what Daniel should do and should not do - will depend on many things.
One of them, I believe, should be the Customer Health Score metric.
When calculated judiciously, the Customer Health Score could be one of the most important measurements for you as a CSM.
One glance at this number, and you should have a pretty good idea about the customer overall state of affairs:
- Are they satisfied with the level of service you’re providing?
- Is their usage robust enough?
- Are they at risk?
- Are they expected to grow, to renew flat, or lean towards churning?
Sounds great, but what exactly does calculated judiciously mean? This is where it gets a bit tricky.
How should you evaluate customer health?
Is a strong usage good enough? Should the quality of your relationship with the customer determine the overall satisfaction? Does the customer company size, or their financial situation are playing a role in that prediction?
I’ll try to answer these questions with an example:
When your throat hurts badly, you’ll probably consider yourself sick and treat yourself with some meds, staying in bed for a few days.
But why? It’s only your throat! Your head’s fine, your stomach’s ok, your legs function normally, and your heart beats, etc.
It seems silly to explain, but to be “healthy”, we need all our body systems working.
Well, it’s the same for our customers' health - you need all the “systems” to work!
This is why a good and reliable health score is a well-balanced one.
Let’s divide the health score into three categories, which will include (almost) all of the customer management aspects:
Usage Data
Feature adoption, correct implementation, strong volume, # of licenses / seats …, all of these objective indications determine whether the customer is using your solution properly. These are the core, the prerequisite, the “sine qua non”. If they aren't robust, you quickly know that there is a problem.
But are they enough to get the full picture? Are they enough to ascertain the customer won’t churn any time soon?
You already know the answer: You need more than that.
Human Appreciation
Your ״sentiment״, about your customer health - is key. It is usually coming from many factors such as: the relationship trust built over the years, the current level of responsiveness, the fact that they will genuinely listen and act upon your recommendation, etc. It is often not measurable accurately, and yet, that soft-skills related “human factor” is so important when it comes to assessing the customer's overall satisfaction.
Customer Company Context
There are some events that your champions on the customer side cannot predict and cannot control: negative financial results, a sudden reorganization, the acquisition of their company by a bigger corporation, etc. These occurrences are most commonly unrelated to the usage data and the CSM performance, yet might have a direct impact on the business you are conducting with that specific customer. A company experiencing these kinds of rocking-the-boat changes will be usually more inclined to look at cutting costs and securing what’s working, rather than considering adoption or expansion.
The proportions/weights of each category varies between the different industries, segments, culture, etc. But as illustrated in the sore throat example before, the concept should always remain the same: All 3 are needed and should be calculated, weighted, included, and represented in the final score.
It’s like every good cooking recipe: leaving out an important ingredient will most likely ruin the whole thing. You need all ingredients in high quality, you need the right combination, and of course a bit of experience - to know in real-time if what you’re looking at makes sense or not.
To summarize, I’d say that the Health Score, when well-built and balanced, could be a real game-changer in your day to day life as a CSM, and will help you make smart decisions, even in tough circumstances.
But let’s get back to our friend Daniel, on that tough morning. Luckily for him, his company developed a trustworthy Health Score. So as the news is coming in, he opens his customer success tool to check the customer health-score. It takes him less than 1 min, and yet, it’s tremendously helpful in giving him an understanding of the customer situation.
The score is 92. The confidence level with that customer is quite high, they trust him, the usage is strong and growing, their business is stable.
Should he set a war customer-retention room up across teams? Probably not: Handling the bug in a swift and efficient manner, including a good RCA doc afterwards - should be enough.
Your company does not develop good Customer Health Scores? Reach out to your enablement / ops team to start the process, because once you have one, your life will be much easier.
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*Daniel is a fictional character, but I love the name (my 5-year-old’s name ;-))
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Jeremie Halimi is the Director of Customer Success for EMEA/APAC Enterprise accounts for Cloudinary.
