The growth of your company’s revenue depends on your customers being able to utilize your product successfully, especially for SaaS businesses, because clients frequently explore your product on their own without the assistance of a sales demo or support from an account manager. Successful clients are more likely to convert following a free trial, stay clients longer, and recommend your product to others in need of a comparable service.
However, contrary to popular belief, Customer success is everything we do at the company—from marketing and sales to onboarding and support to hiring and operations—that enables our customers to get the most out of the service.
So, How are you going to measure it, exactly?
For our purposes, a simple-ish method that falls somewhere in the middle has been really beneficial. The factors we take into account when determining customer success at any company are listed below, along with some of our own measurements from representative segments for each factor. So let’s begin!
How is SaaS Customer Success Measured?
For a company, the onboarding phase of a SaaS customer’s life is maybe the most crucial. The customer either “gets” the product during those first sessions and starts to value it, or they depart, generally permanently.
In some cases, Customers receive a series of onboarding prompts in their mailbox after signing up for the service.
Nearly 80% more free users are likely to become paying customers if they respond to the alerts within 24 hours than if they don’t. Groove, A company founded by Alex Turnbell uses the 24-hour period as a baseline for early client success. Therefore that represents a significant drop-off.
Free-to-paid conversions are the next stage of the client lifecycle, where we gauge success.
A customer’s decision to upgrade to a paid account is a clear indication that they have found the product to be valuable enough to justify purchasing it.
Repeat Purchase Rate
The decision to do business with you again or not is ultimately the best indication of how successful and content your customers are. Do they extend their contract once it expires? Do they stay with your company or defect to a rival when they need to buy your product again?
Your repeat purchase rate (RPR) shows how many and what proportion of customers make repeat purchases as a result of a successful customer success initiative.
Customer Retention Rate
Similar to repeat purchase rate, customer retention rate (CRR) is better appropriate for businesses with longer-term client relationships (vs. one-off, transactional ones).
The percentage of existing clients your business kept during a specific time period is your customer retention rate. In other words, how many of your clients remain throughout a month, quarter, or year?
Churn, one of the “classic” customer success indicators, is a crucial indicator of the health of your company. We are not attaining customer success if clients are leaving. Although some customers may inevitably churn, we closely monitor this number because if it starts to rise, there may be a problem.
You can calculate monthly customer turnover by dividing the total number of customers at the end of a given month by the number of customers who left that month.
How to Improve the Customer Success Matrix of your Company?
Your chances of optimizing for growth are much increased when you focus on customer success. And you’re probably doing something incorrectly if your revenue doesn’t increase along with your customer success KPIs (and you need to re-visit pricing, operations, etc.).
Almost all of our customer-facing activities revolve around success-oriented optimization. Some strategies that have been successful for us include:
1. User Research & User Testing
You probably have user experience blind spots if you’ve never observed someone use your product—someone who isn’t on your team or a friend of yours.
Although it’s not the most rigorously designed experiment, I’ve learned a lot by simply asking users to take a few minutes to screen share with me when they use Groove. We were able to find places of friction and make general UX and onboarding flow improvements as a result.
To better analyze user sessions and determine where users are spending the most time within your app, you may also use tools like Inspectlet.
2. Increase support
Customers will undoubtedly have inquiries once they begin using your product or service. Customers require assistance getting “unstuck,” so your support staff needs to be ready to answer their inquiries. Support can be self-service, reactive (email tickets), or proactive (chatbots, for example) (eg: knowledge base articles). To guarantee that consumers are receiving timely responses to their questions, businesses should make an effort to offer a combination of all three types of help.
If customer support employees can address a problem or meet a customer requirement within the first engagement, about 67% of customer churn can be prevented. Customer success is all about giving consumers a wonderful experience and assisting them in realizing value as quickly as feasible. Your consumers will frequently require some assistance along the road.
3. Make the experience your own.
The cornerstone of any customer success strategy is personalization. Customers these days favor brands that they believe are paying attention to their unique wants and objectives, understanding them, and listening to them.
“91% of customers are more likely to shop with brands who know, remember, and give them relevant offers and recommendations,” claims a report by Accenture.
Understanding the goals of the consumer is the first step in personalizing the experience. What must they accomplish in order to reap the benefits? The customer’s desired end objective should be the focus of every customer engagement, whether it occurs during the onboarding or upsell phase.
The finest customer success measures for us might not be the best for you. This depends on the type of business. However, the practices used above are a few of the most tried and tested methods to calculate and improve your customer success.
Still, want to know more about Customer Success? Head to SaaSworthy.com. Here we have plenty of articles to cater to all your business queries.