5 Customer Success Metrics You Wish You Knew Earlier

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#10 The CS Cafe – 5 Customer Success Metrics You Wish You Knew Earlier

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In its most simple definition, driving Customer Success is all about building strong partnerships with your customers so you can deliver greater business outcomes.

As your primary goal is to help them overcome their challenges and arrive at their destination, you need to set a few critical performance indicators to be able to measure progress and the impact of your CS strategies.

These are NRR, MRR, CLV, CES, and NPS which I’ve covered in a previous edition here.

But there are more.

And today we are going to explore 5 other metrics which I believe are equally important and that will help you in your day-to-day conversations.

These are:

1/ CAC

2/ MAU

3/ CSAT

4/ CHS

5/ TTV

Let’s cover each one of them quickly.

1/ CAC: Customer Acquisition Cost

It’s the amount of money a company needs to spend to get a new customer.

=> allows you to identify the most cost-effective way to acquire new customers.

Its formula is simple:

CAC = total money you spent on Sales expenses and Marketing campaigns, divided by the number of new customers you acquired.

Example:

Money spent on a social media campaign: $5000

Number of new customers: 5

=> CAC for the social media channel= $1000

Based on the acquisition funnel you consider, you’ll probably have a different CAC.

The smaller the amount, the better company’s return on investment.

Source: KPIMax

2/ MAU: Monthly Active Users

The number of unique users that engage with your platform within a 30-day period.

=> helps you measure performance and growth along with the level of usage per customer segmentation.

Tracked by unique identifiers such as user ID, username, or email. 

However, the definition of “user” and “active” depends on the company.

A best practice is to relate the measurement to a specific action.

For example, you’d say “an active user is the one creating at least 5 marketing campaigns per month.”

In the same way, DAU (Daily Active Users) stands for the total number of unique users engaging with your solutions on a daily basis.

The higher MAU (or DAU), the better for you.

MAU: Monthly Active Users

3/ CSAT: Customer Satisfaction Score

A popular metric that measures how satisfied customers are with your products or services.

It’s the percentage of satisfied customers (%)

= 100 x [number of satisfied customers], divided by [the number of survey responses]

The average score across most industries is around 70-80%.

And again, the higher the CSAT, the better.

Source: Totango

4/ CHS: Customer Health Score

This is one of the most commonly used metrics.

=> helps you monitor the relationships customers have with your business, usually tracked in colors: Green / Yellow / Red

There are two key areas of focus mainly:

• activity

• usage of your products

Shows which customers need more attention (Yellow / Red) so you can build recovery plans to have customers back to Green status.

And again, the greener, the better for you! 🙂

CHS: Customer Health Score

5/ TTV: Time To Value

Measures the length of time it takes for your customers to realize the benefits of your solutions.

=> helps evaluate the value of an investment in time and money.

But the definition of “benefit”, and “value” is not that easy.

The shorter TTV, the faster for customers to maximize their return on investment.

TTV: Time To Value

And that’s it!

These were 5 other key Customer Success metrics that matter in SaaS:

1/ CAC

2/ MAU

3/ CSAT

4/ CHS

5/ TTV

But there are more I’ll be exploring in the upcoming editions.

So stay tuned and feel free to bookmark this edition for future reference!

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Hakan’s Top Resources

In today’s edition, I’m introducing a new section where I’ll be sharing with you some of the resources which inspired me in my CS journey.

And I believe it would be of great help to you as well.

• One Book: The CS Professional Handbook – by Ruben Rabago and Ashvin Vaidyanathan.

A great book that covers all roles, from individual contributor CSMs up to senior leadership. It also includes graphs and other data to help you set the metrics you need.

Reading this book will surely give you more ideas you can implement in your daily activities.

Get your copy here.

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• One Talk: Earl Nightingale

Illustration © Hakan Ozturk

Continuous learning and developing your skills are key to succeeding in CS.

Tune in and listen to this epic 3+ hours of pure wise guidance about achieving success from Earl Nightingale.

Died in 1989, Mr. Nightingale is an American radio speaker and author, dealing mostly with the subjects of human character development, motivation, and meaningful existence. 

He was the author of “The Strangest Secret”, one of the great motivational books of all time with his famous quote: “We become what we think about”.

Do you want to become a top-performing CS pro? Then listen to this episode on my podcast from time to time and apply the fundamentals M. Nightingale describes.

I guarantee you will sooner or later become what you “think about” all the time!

© Hakan Ozturk

Well, that’s all from me for today!

Thanks for subscribing. I hope you enjoyed the read and that you learned something new. If so, please share this edition with your friends and network to help grow this incredible community of highly effective Customer Success professionals like you! !!

Have a wonderful Sunday

and a great & productive week ahead!

Can’t wait to meet with you next Sunday at our Customer Success Café again!

Hakan.

PS: if you have any suggestions or feedback, give it a thumbs up below and send your message over! I reply to every single message within the hour.

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