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How to Measure Your SaaS Startup’s Customer Success

By Emily Smith on Mon, Nov 4, 2019

Customer Success can make or break your SaaS startup, and it’s vital that you champion it right from the early stages, and integrate it into your company from Day One.

Why? Simple: a Customer Success strategy, driven by metrics, will provide you with valuable insights into how you’re performing.

To understand how you’re doing as a company, and how you can improve and grow, you need to understand how well your customers are doing with your SaaS.

Churn is Just the Starting Point

No doubt you’re already measuring churn – the Customer Success metric you’ll be most familiar with.

Churn is great to measure as an indicator of your overall Customer Success performance. However, while it tells you whether you’re doing well or poorly at retaining customers, it doesn’t tell you why you’re good/bad.

It provides you with no actionable insights to help you improve your Customer Success.

So while it is vital that you continue (or start!) measuring churn, it shouldn’t be the only measure of your Customer Success strategy.

Your Next Steps to Measuring Customer Success

What Does Customer Success Look Like?

The best startups are those with the best understanding of their customers’ journey, their goals and their success indicators.

Your customers will have one overall desired outcome from using your service, and then smaller goals that indicate they are on track to achieving that outcome successfully.

If you break down your customer cohort by persona, you can gain more detailed insights into your personas’ customer success indicators. It is vital that you understand what success looks like for each of your personas, so that you know whether or not they are achieving their goals.

How Long Should Customer Success Take?

Once you’ve identified key goals by persona, you can then work out how long each customer should take to reach their milestones. As an example, consider the first three months of a digital agency implementing a project management SaaS:

Day 1: Customer purchases PM software, completes set-up and adds first project to the tool

Day 2: Customer invites entire agency team to PM software

Day 3-30: At least one user changes something within the tool every day

Day 31-60: At least 50% of users log in once a week

Day 60-89: Further projects are added, additional features being used to plan upcoming projects

This flow represents Customer Success for the agency customer: after three months the PM software is integrated into their regular work schedule, being used regularly, and providing sufficient value that they continue to use it for new agency projects.

You can clearly see important milestones that the customer achieves on the pathway to achieving their desired outcome: adding a new project, inviting their team, regular log-ins etc. You can also identify how long it should take a (successful) customer to achieve these milestones.

You can map out flows like this for your service, for each of your buyer personas. With a successful customer journey clearly mapped out for each persona, you can then focus on improving bottlenecks in the process. For example, if an agency has signed up, added their first project, but after a few days hasn’t invited the rest of their team, they won’t yet be getting any value from your tool.

To improve their uptake of your tool, where the next success milestone is inviting their team, you can address that directly – by sending email reminders, running a webinar, creating an onboarding tutorial to guide the customer through adding new users, etc.

Measuring Customer Success

There isn’t a “one size fits all” set of metrics for you to measure Customer Success: it varies depending on your service and how it’s used by your customers. Success will look very different for a project management tool compared with a social media management tool.

However, there are some indicators of Customer Success that are universal. Here are three things you can track as well as measuring churn:

1) Frequency of Login

How regularly your customers will log in to your tool will depend on what your tool is, but as a general rule the more regularly they log in, the better.

2) Product Utilisation

This is a good indication of the value your customer is getting from your service. Are they using all of the features, or only a small percentage of the tool’s full functionality? The more features they are using, the more they are integrating it into their workday.

3) Support Engagement

This is a good indicator of customer health. Are they submitting lots of support tickets, viewing your website FAQs, or otherwise engaging support services? Some engagement is a positive sign, but continual requests could be a sign that they aren’t achieving their goals with your service, and are at risk of churning.

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