How Do You Measure Customer Success?

5 min read

The primary goal of customer success (CS) teams is to enhance customers’ experiences with your business. In the SaaS industry, this includes ensuring that new customers understand how to start using your software, existing customers learn how to use more advanced features, and customers’ problems are solved thoroughly and efficiently.

By leveraging customer success analytics, your CS team can know what actions to take and when to take them to give your customers the optimal experience. But in order to make useful analyses, you need the right data.

In this post, we’ll break down how to measure customer success to give your CS team insights into the highest impact actions they can take.

How Is Customer Success Measured?

Customer success is measured by collecting data that relates to your customers’ journey, such as how good of an experience customers have while using your software. However, it isn’t enough to just collect data; you need something to compare it to, which is where KPIs come in.

What Is a KPI in Customer Success?

Key performance indicators (KPIs) are specific metrics to measure success; in CS, your KPIs would reflect objectives that influence whether or not your customers are having a positive experience.

What Are Some KPIs for Customer Success?

KPIs for customer success typically fall into one of these categories: customer engagement, customer experience, customer journey, customer lifetime, or customer retention. Here’s what each category means and what insights they can reveal about your customers:

  • 1. Customer engagement refers to how often a customer interacts with your business’s software and/or content. Highly engaged customers regularly use your software and view your content to learn about more advanced features and uses. Disengaged customers log in sporadically and don’t take the initiative to learn more, whether that means attending webinars or signing up for an educational newsletter.

  • 2. Customer experience measures whether customers enjoy using your software or are frustrated by it. It also refers to how customers perceive your customer support system—are their problems solved quickly, or are they left to fend for themselves?

  • 3. The customer journey keeps track of how a lead becomes a paying customer. What marketing materials did they engage with? How much time does the average conversion take for your sales team?

  • 4. Customer lifetime value refers to how much money a customer will spend with your business from their first purchase to their last purchase. Do your customers only make an initial purchase, or are their opportunities for paid upgrades as time goes on?

  • 5. Customer retention measures how many of your existing customers stick with you during a certain period of time. Are you gaining more customers than you’re losing, or is your sales team struggling to stay ahead of churn?

Choosing the type of KPI to focus on will be influenced by your strategic goals. Start with what you’re hoping to accomplish, then pick the KPI that leads you in that direction.

What Are the 3 Key Performance Indicators I Should Focus On?

When it comes to deciding how to measure customer success for your business, we recommend considering the following KPIs:

1. Customer Health Score

A customer health score system shows you which customers are growing at a successful rate and which customers need to be reached out to before they churn. At Planhat, we help CS teams stay ahead of customer health with a customizable scoring system that can track platform use, account size, time until renewal, and more.

2. Customer Churn Rate

Your customer churn rate is how many existing customers you are losing compared to how many you are keeping and how many new customers you are gaining. A high churn rate can mean that your business is shrinking. To help prevent businesses from suffering due to unexpected churn, we’ve developed a warning system to track lower engagement and other unhealthy signs. This means that you can catch customers before they take their business elsewhere, instead of scrambling to refill vacant seats.

3. Customer Onboarding Time

Customer onboarding is a crucial step in creating a positive customer experience. This is the time when you introduce a new customer to the valuable features that your software offers. This process needs to be both educational and exciting. It also needs to run smoothly so that your customers can get the most out of your software. With customer onboarding playbooks, Planhat brings consistency to your processes. This makes it easier for your CS team to connect with customers during critical learning moments without letting any touchpoints fall through the cracks.

By improving customer health, decreasing churn rate, and reducing customer onboarding time, you’ll find that customers stay with you longer and need to rely on customer support less.

Make Sense of Customer Success Metrics with Planhat

When measuring your customer success, it helps to have all your data working together. That’s where we come in. Here are some of the ways that Planhat makes it easy to score your metrics and act on them:

  • Gathers your customer data into a secure 360 degree view

  • Automates time-saving triggers and alerts

  • Combines task management with conditional sequencing

  • Incorporates visual storytelling to clearly communicate action items

Contact us today for a demo and see how we can reinvigorate your CS team.

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Planhat Leads the Way in Customer Journey Mapping

In the G2 Winter Report 2022 Planhat has been named a leader in seven categories – including a brand new category: Customer Journey Mapping.

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