In today’s data-driven age, businesses can’t afford to make decisions based on gut instinct.
For this reason, the best organizations measure a number of metrics—including Net Promoter Score (NPS), churn rates, and customer acquisition costs—to determine how healthy their businesses are.
If you’re looking to build a stronger, more resilient business, one such metric you need to begin measuring and optimizing is the customer health score.
What is a customer health score?
A customer health score measures how your customers interact with your products, how deeply they use them, and how frequently they use them. While customer health scores might not be as critical for every organization, they are essential for SaaS companies that depend on renewals.
If the bulk of your customers don’t use your products that often or don’t use a majority of the features, your customer health score will likely be low. On the flip side, if the majority of customers are power users that keep your apps open all day long, every day, chances are you’ll have a robust customer health score.
How has PX redesigned the customer health score?
In recent years, smart SaaS companies have paid more and more attention to customer health scores to prevent churn, increase adoption, and drive more revenue. That said, tracking things for the sake of tracking things doesn’t do much good when you’re measuring things the wrong way.
From where we stand, the old way of measuring the customer health score left much to be desired because it imposed severe limitations on teams. To make customer health scores more helpful to organizations, we’ve invented a new way to score customer health.
What are the benefits of the new and improved customer health score?
For years, companies measured customer health by treating customers like traffic lights and grading them green, yellow, and red. While this approach is better than nothing, it leaves much to be desired—which is precisely what our reimagined metric is solving for.
With that in mind, here are three ways the new approach to customer health is helping SaaS companies like yours achieve increasingly better results.
Automatic Updates vs. Manual Updates
Suffice it to say that the old way of tracking customer health took a lot of time. At scale, it was virtually impossible to measure customer health scores, resulting in a lot of unscored customers. And since scores represent a snapshot in time, a lot could have changed in the interim; a green customer could become red after a bad experience, and your customer success team would be none the wiser.
We believe that organizations having the ability to track customer health automatically and consistently is a game changer. Not only does automation help companies save a ton of time, but it also enables them to measure an increasing amount of elements to get a clearer and clearer picture of true customer health. Plus, you won’t leave any details behind.
Data-Driven Insights vs. Subjective Decisions
While some elements of the customer health score—such as the caliber of the relationship you have with the executive team—might be largely subjective, the bulk of them can be purely objective.
By embracing automation, it’s possible to make the process of measuring customer health scores as objective as possible. This enables you to make data-driven decisions and apples-to-apples comparisons from one company to the next.
Multiple Models vs. a Rigid Structure
When you measure customer health the old-fashioned way, you’re generally stuck using the same model for every customer.
But should you really use the same metrics to score a customer that’s been with you for five years as one that’s just completed the onboarding process?
We don’t think so.
With the right tools in place, it’s easy to implement multiple customer health models and grade customers based on where they are in their journey with you. This can be particularly helpful for companies that prioritize renewals over new business.
Ready to unlock the true promise of the customer health score?
If your goal is to scale your product and make it sticky with an ever-increasing number of clients, you need to do everything you can to optimize your customer health score. It’s that simple.
Otherwise, you’re leaving money on the table and making churn a very real concern.
The good news is that it’s possible to unlock the true promise of customer health scores. You just need the right tools in place, which is exactly where Gainsight can help.
For more information on the easiest way to understand what your users are doing inside your products so you can make data-driven decisions on how to deliver stronger, more engaging experiences, request a demo today.