Top 7 Customer Success Metrics You Should Measure

About this video

Dan Martell, serial entrepreneur, investor and creator of SaaS Academy, shares the top seven customer success metrics for monitoring accounts, preventing churn and growing expansion revenue. He says over the last five to seven years he has been involved in hiring probably 50 different customer success managers across his portfolio companies and 40 plus investments, and that investing a dollar in a customer success manager should produce $5 of new revenue if the right metrics are managed. The seven are: 1) customer churn percentage, also called logo or account churn; 2) MRR churn percent, the revenue lost measured on a monthly or rolling 30-day basis; 3) net MRR churn, which accounts for expansion revenue; 4) expansion MRR percentage, from upsells, cross-sells and add-ons as customers move beyond a starting plan such as a $50 or $500 plan; 5) Net Promoter Score, based on how likely customers are to recommend the company, with scores of nine and 10 as promoters, one to six as detractors and seven to eight as neutral — he says most telcos are around 12 or 13, Apple or Virgin are upwards of 60 to 75, and most SaaS companies starting with him are at 25 to 30, with a goal of 55 to 60 and purple, referenceable customers; 6) Customer Satisfaction Score, a one-to-five star rating after an interaction such as support or a quarterly business review; and 7) Customer Experience Score, a one-to-five effort rating for specific steps like onboarding, activation or adding an integration. He closes by offering his Precision Scorecard framework for quarterly, monthly and weekly metrics.

Key takeaways

• Track customer churn percent, MRR churn percent and net MRR churn separately, using monthly or rolling 30-day windows, so logo loss and revenue loss are both visible.
• Measure expansion MRR percent: customer success managers are accountable for upsells, cross-sells and revenue retention beyond the customer’s starting plan.
• NPS sorts customers into promoters (9-10), neutrals (7-8) and detractors (1-6); Martell aims to move SaaS companies from 25-30 up to 55-60.
• Use CSAT — a one-to-five star satisfaction rating after support or a QBR — to monitor each interaction with the company.
• Use CES — a one-to-five effort score for onboarding, activation, modules or integrations — to prioritise customer success activities and the product roadmap.

Episode details: published August 31, 2020 · 8:27 long. Summary written by Self Growth Videos from the episode itself. Business results and any income figures mentioned are Dan Martell’s own claims, shared for education — they are not typical or guaranteed.

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