CUSTOMER HEALTH SCORE

Understanding the Customer Health Score

The Customer Health Score is a valuable metric that assesses the health status of clients. It is commonly used by customer success managers to gauge the future trajectory of the customer-company connection. Determining a classification method for this score is subjective and varies from one company to another. Nonetheless, it serves as a tool for product and customer success teams to predict whether a customer will expand, renew, or churn.

The Significance of the Customer Health Score

Customer success managers rely on the power users to ensure that their efforts are focused on the right areas. This is where the Customer Health Score plays a crucial role. By utilizing customer health scoring, managers can identify opportunities for account expansion. Power users, or the "healthy" customers, who frequently engage with the product, are more likely to provide reviews on platforms like G2 or Capterra when asked for feedback.

Creating a Customer Health Score

There are several key factors to consider when creating a customer health score. The following ingredients are essential:

• Average user engagement: How much time do users spend using the product and how frequently do they return?
• Product adoption: How many users are present within a specific account?
• Feature utilization: How extensively are the major aspects of the product being utilized?

According to these factors, a healthy account is characterized by numerous users who frequently log in and actively use the product. On the other hand, an account with few users who infrequently engage with the product is considered at-risk. This indicates that the account may not be deriving sufficient value from the product, which should raise concerns before the subscription is due for renewal.

Improving the Customer Health Score

Customer health scores are only valuable if they are put to use. The aim should be to increase health scores across all categories while simultaneously expanding the business.

Engage with customers through your customer success team and actively listen to their feedback and concerns about your product. It is often surprising how easily customers identify and articulate their issues. Any problem that may prompt customers to leave can be quickly and effectively addressed once detected.

Remember, a high customer health score signifies a healthy and thriving customer base, making it crucial for long-term success.