5 hidden metrics that market leaders use to drive success
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[email protected] (415) 990-5797©2015 Gainsight. All Rights Reserved. July 16, 2015
5 Hidden Metrics that Drive Customer Success
©2015 Gainsight. All Rights Reserved.
5 Hidden Metrics that Drive Customer Success
July 16, 2015
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[email protected] (415) 990-5797©2015 Gainsight. All Rights Reserved.
Housekeeping
• Q&A panel on your right • Recording for colleagues who can’t
make it• All attendees will receive slides• Twitter hashtag #customersuccess
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[email protected] (415) 990-5797©2015 Gainsight. All Rights Reserved.
Presenter
Lincoln MurphyCustomer Success Evangelist
Gainsight@lincolnmurphy
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[email protected] (415) 990-5797©2015 Gainsight. All Rights Reserved.
What Is Customer Success?
Customer Success is when your customers achieve their Desired Outcome through their interactions with your company.
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[email protected] (415) 990-5797©2015 Gainsight. All Rights Reserved.
Customer Success Management
1. Define what success means to your customer
2. Determine if the customer is achieving success
3. Drive internally and externally toward success
4. Demonstrate success back to the customer
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David SkokMatrix Partners
http://www.forentrepreneurs.com/why-churn-is-critical-in-saas/
Customer Success Drives
First-order Growth
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CSM Drives Second-order Growth
Source: http://www.saastr.com/its-not-just-cltv-its-your-trgcltv-that-matters-total-all-in-revenue-generated-by-your-customer/
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CSM Drives Third-order Value
0x
5x
15x
20x
60% 70% 80% 90% 100% 110% 120%
Source: Altimeter and FactSet 10/2014
10x 7X
15X
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Customer Success Metrics
• Financial Metric• Revenue• Churn
• Customer Success-specific Metric• Customer Health• Satisfaction
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5 Hidden Metrics that Drive Customer Success
2 Headwind
3 Tailwind
4 Net Revenue Retention
5 Magic Number
Batting Average1
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1. Batting Average
# Customers Renewed In Period
÷# Customers Renewable In
Period
Are customers voting with their signature on the
value of your product or service?
Best-in-class:> 90%
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2. Headwind
ARR/MRR of churn dollars including price decreases
and downgrades
÷Beginning of period
ARR/MRR
How much drag do you have on your growth?
Best-in-class:< 10%
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[email protected] (415) 990-5797©2015 Gainsight. All Rights Reserved.
3. Tailwind
ARR/MRR of up-sell dollars including price increases
and upgrades
÷Beginning of period
ARR/MRR
How much acceleration do you have to new
bookings?
Best-in-class:> 20%
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4. Net Revenue Retention
Beginning of period ARR/MRR + ARR/MRR from tailwind – ARR/MRR from headwind
÷Beginning of period ARR/MRR
What’s the net dollar impact
from Customer Success?
Best-in-class:> 120%
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[email protected] (415) 990-5797©2015 Gainsight. All Rights Reserved.
5. Magic Number
ARR/MRR of renewals in period + ARR/MRR of up-sells in period
÷Fully-loaded cost of Customer Success team + extended
team
What’s the cost-effectiveness of
Customer Success?
Best-in-class:3-5X or higher
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Other metrics to look at
- Same metrics by region, vertical, product, segment
- Churn by reason
- Top churns and up-sells
- Churn and up-sell by cohort
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Tense-Based Metrics
Sales Customer Success
Past Bookings Renewals / Up-Sell
Present Market Share Benchmark
Future Pipeline Health Score
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Lagging Indicators Leading Indicators
Too Late
Churn
Silence
Churn inquiryLate payments
No product usage
Frustration
Low NPS scoresLong support TTRNot referenceable
Disengaged
Not opening emailsDeclining adoption
Sponsor leaves
Success
“Sticky” feature usageProven ROI
Increasing adoption
Future Metrics
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http://www.gainsight.com/pulsecheck2015/
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Customer Success Benchmark Report
Download Your Copy
Today!
Download Your Copy
Today!
http://j.mp/csmbench
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Q&A
©2015 Gainsight. All Rights Reserved.
July 15, 2015
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THANK YOU
©2015 Gainsight. All Rights Reserved.
July 15, 2015