In industries with a contract/recurring revenue model (such as SaaS) it’s often even more important to keep your current customers than to win new ones. After all, losing a big account can have a monumental impact on ROI numbers. That’s why sales leaders need to not only track pipeline metrics, but also track metrics that give insight into the health of customer success efforts. Customer success metrics can act as an early warning system, revealing whether enough is being done to keep customers consistently renewing contracts.
Here are seven of the most important analytics to monitor in order to gauge how effective your customer success metrics are.
Key Question Answered: How satisfied are your customers overall?
What it Measures: The percentage of customers that do not renew their contracts.
Value: This metric shows the inverse of your customer retention rate. It’s likewise important to see how many customers are not renewing contracts. Calculating churn rate helps you gauge how satisfied customers are. It can also help you discern which types of customers churn the least and most, which can help you determine your optimal target buyer profiles.
Pilot Program Success Rate
Key Question Answered: How successful are your pilot programs?
What it Measures: The amount of pilot programs that convert into customers divided by the total number of pilot programs during a specific period.
Value: For companies selling SaaS offerings, it’s common to offer a pilot program. A pilot program is an (often paid) trial period that lets customers experience using software before committing to it long-term. Often a pilot program will involve less seats than a full rollout. It’s crucial to know how successful pilot programs are. If there is a lot of slippage, it means that your customer success team likely needs to do a better job of supporting customers during pilot programs in order to get them to commit to contracts.
Free to Paid Conversion Rate
Key Question Answered: What percentage of customers using your free offering upgrade to premium?
What it Measures: The total percentage of customers that upgrade from free to premium.
Value: Lots of software companies offer a freemium model. They typically offer a free app with limited functionality that enables customers to pay to gain access to additional features. Companies using this model need to keep close tabs on this metric in order to gauge whether sales and marketing efforts are successfully inspiring customers to purchase the premium offering. While the rate itself will vary greatly depending on what you’re selling, price points and other factors, this metric helps you notice trends over time. If there is a sharp dip in premium customers, for example, it’s a clear warning sign that customers aren’t successfully being nurtured to buy the premium offering.
Key Question Answered: How long does it take your team to successfully onboard a new client?
What it Measures: The total time it takes from when a client signs a contract to when they are up and running.
Value: Onboarding time matters in SaaS! Companies with long or strenuous onboarding programs often start contracts off on the wrong foot. As an example, if it takes weeks to implement a new marketing automation or sales acceleration tool, then that can have a negative impact on your customer’s quarter (which can, in turn, negatively impact their year). But shortening onboarding time can help ensure that your customers start getting value out of your solution a lot sooner.
Sessions per Day
Key Question Answered: How many times are customers logging into your product daily.
What it Measures: For mobile applications and SaaS offerings, this metric tracks how many times customers use the product daily.
Value: This is a metric that gives a bird’s-eye-view of overall product usage. If you notice a sharp decline in sessions-per-day it can be a warning signal that usage has dropped and customers are in need of additional nurturing. If sessions-per-day continue to escalate, it can be a good indicator that your product is gaining traction.
Time in Product per Day
Key Question Answered: Are customers using your product enough to be successful?
What it Measures: This metric shows the total amount of time that a customer uses your product each day.
Value: The ability to see how often a particular customer is using your product can give insight into the health of that account. If customers aren’t using your product enough, it gives customer success representatives the opportunity to intervene and discover why they aren’t using the product. Being proactive enables your team to address key issues before they result in churn.
Customer Retention Cost
Key Question Answered: How much is being spent on sales, marketing, support and customer success efforts in order to keep customers?
What it Measures: The cost required to keep customers.
Value: Just like it’s important to track customer acquisition cost (CAC), it’s likewise important to keep tabs on how much it costs to keep your customers. Often there’s a lot of effort involved in order to properly support customers and ensure they are successful. There are sales costs involved in upsells. There are costs associated with customer support and oftentimes marketing is even involved with creating support and customer success collateral. This cost totals all the efforts (including the cost of support/customer success tools) involved in keeping your customers.
Want to track even more customer success metrics? Our latest eBook features these and even more customer success metrics (including advanced metrics) that you can use to radically increase customer retention rates!