What metrics (e.g. KPIs) does your customer success team get measured on?
How do you track these metrics? Are these metrics tied to CSM compensation?
Answers
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John,
Great question! I know a lot of Orgs track things like NPS and Feedback so I would be interested to see how companies leverage that with their CS teams. With our team we really focus on adoption metrics that all roll up to an overall health score. We measure adoption based on what membership entitlements the member uses through out their membership year and strongly believe that this will be the the best indicator on likelihood to renew. I did find this great blog on health score and breaks it down a bit. The adoption does lead to their compensation bonus which really helps CSMs think strategically about their interactions with their accounts. We also track cross selling and provide a small incentive for our CSMs.
I think @Steven Forth and @Kerri Wienbeck might have some good thoughts on this but I hope we get some more insight in to this topic!
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I'd also love to hear the thoughts of @Jaime Farinos and @Devin Carrier on this one.
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There are a few KPIs tracked at a team level and some at an individual level. At an individual level I'm not fond of KPIs because they can easily drive bad behavior. It's better to focus rather on driving positive behaviors related to customer advocacy, teamwork, common values, collaboration and a growth mindset. If the right behaviors are displayed, business outcomes will follow.
From a team perspective I like to look at references, retention, customer sentiment, product sentiment and product adoption. In general follow the health score categories discussed here:
https://exchange.tsia.com/discussion/70/categories-for-360-customer-review#latest
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@John Loiacono TSIA publishes a dataview that provides a list of key metrics for Customer Success and the details on current industry performance on those metrics:
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Sorry for the delayed response, took a few days off last week for a staycation (side I had hoped to get out of the city).
The obvious measures of customer success are renewals, upsell, cross sell and one of the measures of customer health.
But these are outcomes of something else, the value delivered to the customer and the customer's recognition of that value. These are the underlying metrics for customer success and I believe the most important things that need to be tracked.
There is an emerging discipline of how to do this that grows out of the work of Tom Nagle, the author of the The Strategy and Tactics of Pricing, but it has now been extended beyond the world of pricing. Tom's approach focussed on economic value, which is of course central, but others have formalized emotional value drivers and more recently community value drivers.
An emerging best practice is to develop a value tracking tool that travels from marketing, through pre sales and sales to customer support. Value delivery promises are made and customer success is accountable for delivering on these promises, communicating them, and getting acknowledgement from the customer that the value has been delivered. These should be the core customer success metrics. Renewals etc. depend on the delivery of value.
There can be another layer beneath this. Often the successful delivery of value depends on informed actions by the customer's users. So skill development becomes one enabler of value. We all know this and this is why customer training is often a part of the customer success program. Measuring skill development and application of the skills to generate outcomes is an important metric in some cases. This requires taking thinking about training to the next level so that it is not about completions or training delivered. The metric that matters is skill development, then skill application, then outcomes (which connects back to value delivery).
I will try to sketch the causal relationships later today.
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Have to agree with Jaime's perspective on references, retention, customer sentiment and product adoption. Product sentiment is a bit of challenge as there are numerous elements to this that are out of the CS team control, but it is important that the CS function drives this on behalf of the customer. The right level of customer empathy, advocacy and loyalty can be measured in customer sentiment. Also, having led CSM organizations that do not measure CSMs on the financial impact of product adoption, can tell you it's hard to quantify the impact of the CS function to executive leaders as all other KPIs become subjective and items the CS team influence.
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@John Loiacono There's a burgeoning discussion on this topic you might find useful: "Does anyone have an opinion on what customer success metrics are most effective?" There's a good blog on the topic too that you can check out.
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