Ignoring customer success metrics is like navigating a ship without a compass. These KPIs provide a pulse on the health of your customer relationships and offer a roadmap to improving your products or services.
Customer success has become a red-hot topic. By 2026, the global market size of customer success platforms is forecast to rise by over 20%, reaching $3.1 billion.
In this article we will touch upon the most crucial customer success metrics your business should track. They are organized into two major categories:
Let’s start with the fundamental question…
Customer success KPIs are the quantitative expressions of the customer’s progress in adopting and using a product and recommending it to other potential users. Customer metrics are indicative of the performance of the customer success team and the efficiency of your customer contact and support channels.
They can provide valuable insights into critical areas like customer journey, support quality, satisfaction, and more.
In addition, measuring your clients’ success keeps your business on track and helps improve your products and services.
Now, let’s take a closer look at the customer success metrics related to support and engagement.
Net Promoter Score is a business metric that measures the likelihood of a customer recommending a product or service to others. It’s also used to measure the loyalty of customers toward an organization.
NPS is a leading indicator of future growth, creating a feedback loop between your customers and business. With it, you can find out how satisfied your customers are with your company, products, and services. This gives you valuable insight into what areas need improvement to enhance customer satisfaction.
To calculate your Net Promoter Score, ask your customers: “How likely are you to recommend [your business/product] to a friend or colleague?” Then assign each response on a scale from 0-10. Based on the respondents’ answers, they fall into three categories:
To calculate the NPS, subtract the percentage of detractors from the percentage of promoters.
The results vary between -100 and 100, so don’t panic if your NPS is negative. It’s not a disaster but a call for prompt attention and response from your side.
This is where the free TextMagic NPS Calculator comes in handy and allows you to quickly and easily summarize the results and get your Net Promoter Score.
Remember that an NPS greater than zero is acceptable, over 30 is great, beyond 50 is amazing, and anything above 71 is absolutely outstanding but hardly attainable.
The customer satisfaction score measures how satisfied customers are with your product and brand. It’s one of the most direct and reliable indicators of a company’s performance that can be used to measure specific interactions.
A high CSAT score presupposes high customer loyalty and, thus, an opportunity for further customer acquisition.
CSAT has been shown to directly affect revenue growth, making it one of the critical customer success metrics for businesses to track. Generally, it involves two aspects – your product and your support.
A study by Khoros shows that 83% of buyers consider good customer service their most important criterion when purchasing. And over 65% of customers who experience poor service will not engage with that brand again.
Knowing your CSAT score will help you identify your weaknesses and improve your business processes.
The first step to calculate your CSAT score is to create a survey asking customers how satisfied they are with your products or services. We recommend asking customers to answer questions on a scale of 1 to 5 (1 being very unsatisfied and 5 being very satisfied).
Once you have collected data from your survey, take the number of customers that rated you 4 or 5 and divide that by the total number of responses.
According to the American Customer Satisfaction Index (ACSI), a good CSAT score varies between 73% and 77%. So, when tracking this metric, ensure your score is in this range.
Recommended reading: CSAT vs. NPS: Which is a better indicator of customer satisfaction?
The customer health score is a customer support metric that measures the likelihood that a customer will continue using your products/services or leave your brand. You can use it to track the risk of losing your customers and see if there’s anything you can do to improve their experience.
Customer health score allows you to understand which customers are likely to churn. Equipped with this information, your account managers and customer service teams can take action before that happens.
Note that not all Health Scores are of equal importance and weight. This is something you should consider when calculating the Global Health Score.
The first contact resolution rate (FCR) is an essential metric for the number of customer issues resolved during the first interaction with the support team.
Resolving a problem on the first contact is the ideal customer service scenario because it eliminates the need for follow-up for both sides. This positively impacts your customers and support staff, freeing the latter to serve even more clients.
A high FCR generally translates into customer satisfaction and better retention. And it’s long established that retaining customers brings considerable savings from acquiring new ones.
Divide the number of cases resolved on the first contact by the total number of issues handled by agents. To get the corresponding percentage, multiply the quotient by 100.
For example, if 200 out of 500 customer issues are resolved on the first contact, the FCR rate is 40%, which is considered low. Although it depends on the particular niche, FCR rates of about 75% are generally accepted as satisfactory, and FCR rates of around 90% are considered high.
Self-service rate, or self-service success rate, indicates the percentage of issues that customers can identify, diagnose, and resolve on their own without contacting a support agent.
The self-service rate is particularly indicative of the effectiveness of your customer support. The figure shows how well your customer success managers adapt to modern support trends. The higher the self-service rate, the better chances you give your customers to educate themselves about your products or services.
Not only does a high self-service rate improve customer experiences with your brand, but it also means savings in terms of the time your support team invests in dealing with less complex issues. Customer contact channels such as social media or self-serve portals, which include FAQs and knowledge bases, can help you quickly increase your self-service rate.
This customer metric can be calculated as the ratio of the number of issues users deal with without the help of a live support agent and the total number of issues, including those handled by the support team for a particular time frame.
Imagine 200 users forgot their passwords for an application and were locked out of their accounts. If 150 of them recover or change their passwords on their own by using the user guides provided in the app, the self-service rate is 75%.
Customer churn rate is the percentage of customers who cancel a subscription or don’t renew it for a given period of time. A low customer churn rate means that most of your customers are paying for your product or service.
On the other hand, a high churn rate means that customers are leaving in droves and canceling their subscriptions at an alarming pace.
The customer churn rate shows how well your company retains customers over time. What’s more, it helps you:
The customer churn rate formula is:
Let’s say your company had 500 customers at the beginning of the month. By the end of the month, you had lost 5 customers. Divide 5 by 500 to get 0.01. Multiplying 0.01 by 100 gives a monthly churn of 1%.
If this sounds too complicated, there’s a quicker way to calculate your churn rate. Use the TextMagic Churn Rate Calculator to get faster results and easier-to-understand reporting.
With these details in mind, your next question may be, what is a reasonable customer churn rate? While there’s no one-size-fits-all standard, a churn rate between 3% and 5% monthly is considered healthy.
Customer retention rate is the percentage of customers who continue to purchase from a company over a particular period. It’s among the most important customer success criteria that you can use to assess your company’s performance and track its progress over time.
As a business owner, you know that repeat customers are the lifeblood of your business. One of the most obvious benefits is that your business will continue to thrive and grow. Did you know that about 59% of loyal customers will strongly recommend their favorite brand to friends and family?
Also, the cost of acquiring a first-time buyer is 5 times higher than the cost of retaining a repeat one. All these figures point to the great importance of customer retention as a marketing strategy and a KPI to keep an eye on.
Here’s the formula:
Start by calculating the number of customers you have at the end of the period (E). Deduct the number of new customers acquired during the period (N) and divide the result by the number of customers at the beginning of the period (S). Finally, multiply the result by 100 to get your customer retention rate in percentage.
For instance, let’s say you have 25 customers at the beginning of the year, gain 10 new customers in the first half, and have 4 customer churns. Your retention rate will be:
[(31 – 10)/25] x 100 = 84%
Product or service adoption rate is the number of subscribers implementing a solution or a service versus the total number of signups within a set timeframe.
This is one of the key customer success metrics SaaS companies use to get valuable insights into the quality of their products and the effectiveness of their support teams.
This rate clearly indicates the effectiveness of the engagement and retention of the users you acquire. It also provides insights into the number of new subscribers you lose so you can adjust your interactions and engagement strategies accordingly.
If you have 50 newly subscribed users this week, and 5 of them have become active users of your product or service, your adoption rate is 10%. You can calculate it daily, weekly, monthly, quarterly, or yearly.
Now, let’s focus on customer success metrics related to business health and revenue.
ARPA measures a company’s profitability and identifies the average revenue per user account. ARPA (or ARPU) can be measured over different periods – monthly or yearly.
ARPA is an essential profitability metric, particularly for subscription-based services. It’s used to forecast predictable revenue and future growth.
Also, it’s applied when analyzing and segmenting subscribers to identify the best products or services. Therefore, ARPA provides valuable insights that can help you keep track of your company’s performance and profits and identify your strengths and weaknesses.
To determine ARPA for a given period, you have to divide the company’s revenue for the time frame considered by the number of accounts for the same timeframe.
For example, if you have a monthly recurring revenue of $33,000 and 11 subscribers, your ARPA is $3,000.
Customer Lifetime Value (CLV) measures the total revenue a company can generate from a typical customer over the period they remain active with a company.
To maximize CLV, you should understand what drives customer retention and loyalty so you can use this data and deliver better experiences.
Your total CLV determines your profitability and translates into a steady cash flow. It also provides a reliable basis for planning your budgets and campaigns.
CLV indicates how much your customers are spending now and how much they will spend in the future. Without this information, your planning is based on guesswork.
You can calculate CLV by multiplying the average purchase value of your customers, the average purchase frequency, and the average lifetime of your customers.
You can also use the TextMagic Customer Lifetime Value (CLV) Calculator to get faster results and vital insights into your company’s customer base.
Conversion rate is a percentage that measures the number of people who take a desired action, such as buying a product or signing up for an email list. It’s one of the most important metrics for measuring your marketing success and effectiveness.
Conversion rate indicates how well your marketing campaigns are performing. A sign of successful marketing is a high conversion rate which translates into more sales and revenue.
You can calculate the conversion rate by dividing the number of conversions during a given period by the total number of interactions with your website/ads. And to get your conversion rate in percent, multiply the result by 100.
Let’s say you have a website with 1,000 visitors per month, and only 5 people purchase your product monthly. Your conversion rate would be 0.5% which is considered low. When tracking customer success metrics, you should aim for between 2.7% and 4.40% conversion rate.
The repeat purchase rate is the percentage of customers that purchase from a company more than once. Actually, this is the ratio of returning buyers against the total number of customers. The higher your Repeat Purchase Rate, the more loyal customers your brand has.
Increasing the proportion of repeated and loyal customers by only 5% boosts profits by 25-95%. Therefore, keeping an eye on your repeat purchase rate is crucial.
The repeat purchase rate is calculated by dividing the number of customers that have made a repeat purchase by the total number of customers. The percentage figure is obtained by multiplying the result by 100:
The commonly accepted figure of a good repeat purchase rate depends on the particular company and industry. The benchmark for eCommerce, for example, is 25-30%.
Customer success is a broad term that encompasses all the elements of an outstanding brand experience–from the first interaction, to repeat purchase, and loyalty.
Touchpoint’s Serve module makes it easy to engage customers on any channel and work towards improving your customer success metrics. Track your customer’s overall health, and analyze their interactions or important milestones to bring about positive changes, one step at a time.
Marketing manager for TextMagic. I like figuring out how things work. Passionate about fitness and video games.
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