The Three R's: Key Customer Success Metrics To Report To Your Board Of Directors
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By Irit Eizips CEO, CSM Practice
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Transcript of The Three R's: Key Customer Success Metrics To Report To Your Board Of Directors
THE 3 R 'SKEY CUSTOMER SUCCESSMETRICS TO REPORT TOYOUR BOARD OFDIRECTORS
By Irit Eizips
CEO, CSM Practice
Customer success, the extent to which your customersare satisfied with your product or service, is a criticalpart of business. Generally, the greater your customers’success, the more your business is likely to growprofitably.
Your customers should always get the maximum benefitfor the amount of investment they put into implementingyour solutions.
While many company owners and customer successmanagers understand this, not many can tell the extentof customer success in their business. So how exactly canyou measure customer success?
REFERRALS
REFERENCE-ABILITY
RETENTION
Reporting on customer success to theboard of directors should ideally becentered on three key metrics,aka “Three R’s”:
1.REFERRALS
cross sell or upsell trendswhich is expressed in thenumber of deals, number ofaccounts and ACV.’
Leveraging your CustomerSuccess Managementsystem, you can easilycreate playbooks andautomate your processes offinding upsell and cross-saleopportunities.
We measure referrals by tracking how many customers arebuying more from us or introduce us to buyers that could buymore internally (or externally). This would typically include
One way to uncover referral opportunities is through theusage of customer email campaigns, surveys as well as youronline advocacy community.
When you present the level of referral to the board of directors, you should
calculate your upsell and cross sell figures. Specifically, including cross sell or
upsell trends that are expressed in:
This is an important metric to the board of directors, since it is tightly
correlated with bookings and revenue targets and company valuation. If you
have your customer segmentation already in place, consider breaking these
numbers down by industry, company size, account segments.
NUMBER OF DEALS
NUMBER OF ACCOUNTS
ACV, ARR OR MRR
2.REFERENCE
-ABILITY
This is the extent to which our customers are advocating on ourbehalf. Reference-ability is, basically, the extent to whichcustomers are reviewing and recommending your solution.
This includes a range ofadvocacy activities – Forexample, the number ofpositive reviews on G2 Crowd,the AppExchange, etc.’
These can help the boardunderstand the extent towhich your customersadvocating for you, and assuch, their level of satisfactionand perceived value of oursolution.
How can one report on the level reference-ability to the board of directors?
Reference calls
Online Reviews and Testimonials
Press Releases and Case Studies
Before each meeting with the board ofdirector, you count how many people are willing and ready to becalled in as a reference for your company.
You might want to do a quick search on Google or social media tofind out exactly where your customers are “talking about you”.However, once you have a solid list, track and compile a report ofhow many reviews and raving testimonials had been posted.
On a quarterly basis, compile the number of cases studies, mediaand analyst interviews, and press releases that you conductedwith your customers as well as number of events
3.RETENTION
RATE
This is a key performanceindicator for the board ofdirectors as it is directlyimpacts the company’sprofitability and bottom line.
Measuring retention of bothnumber of accounts and ACV.These metrics are thensegmented by key customerattributes such as industry,company size (employees orannual revenue), and customersegment.
CONCLUSIONWhen support, usage and engagement metrics arecombined – it provides a good handle on thecustomer’s health.
Similarly, it's important to build your referrals,references and advocacy list as they are invaluable ifyou want to know how well Customer Success / yourbusiness as a whole is doing. Without thisinformation, you won’t know if any future changes areeven wanted by your client base and could cost youdearly.
