It seems people everywhere, in both the consumer and business world, are obsessed with analytics. Whether it’s tracking your calories to manage you weight with some new app, or measuring your resting heart rate after a run, or tracking how many new followers you have in Instagram, it’s safe to say that we are a culture that is OBSESSED with analytics.
And why not? It’s something that’s in our DNA. Our primate brain is wired to solve complex issues and thrives on finding out ways to improve every menial task you can imagine. And if our brain is wired for improving, then we need to measure. To quote the modern business management mogul, Peter Drucker:
“If you can’t measure it, you can’t improve it.”
So, analytics can actually be our best friends when used correctly.
Key Metrics for Customer Engagement and Customer Success
But the amount of data that is being generated also poses an issue. Data for the sake of data is not valuable. In fact, when we measure the wrong KPIs, we’re actually being inefficient. It’s easy to get lost in too much data and we actually end up being inefficient.
So, in the world of customer engagement and customer success, what are the key metrics we need to measure daily? I’ve read many blogs and websites and although there is some variance in which KPIs are crucial for customer success, experts tend to agree that these three pillars are at the core of measuring success for customer engagement:
1. Customer Churn Rate
I know, this is an obvious one. But it’s always at the core of every customer success KPI. If we don’t know what our current churn rate is, we have no idea if customers are actually renewing the service we provide.
It’s a fundamental benchmark in customer success that drives all the rest of the KPIs and success of the organization. In other words, all the other KPIs serve to ultimately lower churn. We can’t improve without knowing where we’re starting.
2. Onboarding Process
In my experience, one of the biggest indicators when measuring customer success is the onboarding process. In fact, you can almost always trace a customer’s decision to renew or not when you look at the onboarding process that took place after a customer has purchased your service.
How quickly did you engage to onboard this customer? How quickly was the customer able to have value realization after the purchase? Setting these goals really increases the chances that a customer will ultimately renew and also buy more.
3. Active Users
Are customers using your service? How often? Is the trend growing or slowing down? The numbers don’t lie here, and having access to this kind of information will always give you an indicator a customer that is healthy and potentially ready to buy more, and a customer who may have started off with lots of usage, but has been dwindling and is on the path to churn.
This is a great way to engage early. It helps prioritize the customers that are using your service less, and allows you to focus on getting them back before losing them.
These are just some core principles that every customer success organization should have. Think of them as the basics. As you become more sophisticated and advanced, you can begin looking at other indicators like net promoter score (NPS) and measuring different cohorts and many more to increase your ability to maximize customer retention.