Customer health score

A customer health score is a metric that allows customer success teams to predict which consumers will grow and which will churn out. It helps reduce churn, understand customers’ needs and desires, and improve products.

In this article, we’ll unveil the reasons to calculate the customer health score. We’ll also learn how to assess and enhance this indicator.

Why is a customer health score important?

Often, entrepreneurs who own startups make a wrong focus. They care too much about customers who will leave the brand anyway without noticing those customers who contribute more to the business's success. You need to evaluate a customer success score before the situation escalates and leads you to clients who have already decided to leave. This indicator is essential since it helps you avoid a high level of customer churn. Once you have it identified, you’ll be able to address risks and prevent unpleasant scenarios.

A customer success team uses a customer health score to determine standards that aren’t met. As a result, some customers become unsatisfied. Customer success managers investigate the issue to solve a product or service problem. Knowing that they are cared for, customers stay happy and loyal.

The executive and product teams also analyze the score to stay in the know of the healthy customers and those at risk. They can conclude what is wrong and fix the problem in the product, improve customer support, increase usability, or ensure a better user experience.

Now that you know about the importance, let’s move to the ways to measure the metric.

How to measure a customer health score?

Once you decide to evaluate your customer health score, you should pay attention to the 6 main metrics. We’ll review them one by one so that you know what exactly you should analyze.

• Customer engagement. The metric evaluates interactions and communication with your customers through various channels. You can use many effective tools, such as email campaigns, messengers, social media, websites, events, etc. To get customers involved, you need to communicate with them and provide different offers that might be interesting. Make use of the most essential customer engagement tools such as chatbots, surveys, emails, listening tools, and push notifications. With LIKE.TG, you can develop outstanding email campaigns, set up chatbots and web push to inform customers about your new offers.
• Product usage. In SaaS products and services, it’s crucial to track product usage. Pay close attention to stages like customer onboarding, training, and resources you provide. Identify the issues that occur with your product. Consider conducting a survey or asking for customer feedback. This process will help you identity bugs and problems before they escalate. Remember, customers always expect a seamless experience.
• Customer relationship. To have healthy customers, you need to establish strong relationships with them. Good customer relationships bring you good ROI, a loyal customer base, and growth. To achieve that, you should meet customer service expectations, help solve clients’ problems, establish trust, reward existing customers for their loyalty, show empathy, be consistent in communication, and ask for feedback.
• Customer advocacy. If your customers tell about your brand and recommend it to their friends, it means that they approve and appreciate everything you do. They feel happy with your product. Moreover, word-of-mouth promotion is the most powerful tool that helps you win more clients.
• Customer sentiment. This is the most difficult metric to measure since it relies only on your feelings about certain accounts. Customer feedback is the main source of information. There are many points you should count on when estimating customer sentiment. They include the level of contempt with onboarding, product’ features, customer support, website, etc.
• Customer ROI. This metric shows the benefit your product brings to customers. You need to figure out whether your customers earn more than they spend on your service. For example, if your customer spends $3 on your product and earns $20 per month, it means that you managed to bring profit.

The metrics are clear, so it’s time to proceed to the ways to improve the score.

How to improve your customer health score?

There are several ways you can find out about the problems in your product or service and eliminate them.

• Ask for customer feedback. The most effective way to unveil why customers are unhealthy is to ask about the problem that bothers them. You should do it quickly before the issue escalates and influences customer retention. If you don’t want to lose customers, you should act. Ask customers to answer several questions about your product, customer support, user experience, usability, etc. Once you have the answers, you’ll get to know the areas that impact customer experience. Work hand in hand with other teams to solve the problem as fast as possible. For example, if the analytics indicates that users churn out after registering with the service, you should think about the quality of onboarding.
• Analyze usage patterns. The second way is to analyze and evaluate the usage patterns of your product or service. Maybe it’s time to review your product and incorporate new features to help customers explore your product. For instance, consider creating in-app guides to bring clients to success faster. With deep analysis, you’ll know which areas require your attention. Since it’s related to the customer success team, its members should work on it.

Congrats, now you know the most important facts about the customer health score. This information will help you measure your metric and improve it.