Measuring Customer Health
It might sound obvious, but tracking the health of your customer base is so unbelievably important, especially in the “new world” we now inhabit.
Reducing churn and protecting revenue should be at the top of every Founder’s post-apocalyptic priority list.
But, tracking customer health in a way that gives you full visibility to identify issues/blockers and take necessary action is not easy.
I’ve seen many instances in organisations where a black hole exists between contract signature and billing; where the intelligence on customer performance (i.e., time to onboard, time to value, at-risk ARR, etc.) is non-existent or resides in the heads of the CSMs.
In my experience, this happens for three reasons:
𝗣𝗼𝗼𝗿𝗹𝘆 𝗱𝗲𝗳𝗶𝗻𝗲𝗱 𝗽𝗼𝘀𝘁-𝘀𝗮𝗹𝗲 𝘀𝘁𝗮𝗴𝗲𝘀: the stages of the post-sale journey are not well defined; critical components like entry/exit criteria, required activities, and product adoption milestones aren’t set. This ultimately means the post-sale journey is not being measured.
𝗗𝗶𝘀𝗽𝗮𝗿𝗮𝘁𝗲 𝗱𝗮𝘁𝗮 𝘀𝗼𝘂𝗿𝗰𝗲𝘀 𝘁𝗼 𝘁𝗿𝗮𝗰𝗸 𝗽𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲: relevant customer data (i.e., contract variables, product usage, support tickets, etc.) sits in silos and is manually triangulated by the CS team. Manual = reactive = diminished chance to course correct.
𝗜𝗻𝗲𝗿𝘁𝗶𝗮: by owning the billing process, Finance is the common denominator of the overall revenue process. Customer performance ends up being flagged during the billing run, which ends up being “good enough” well past its expiry date.
In essence, the black hole exists due to a misalignment of processes, people, and systems.
There is, of course, a tooling solution to handle this. But, effectively measuring the health of your customers starts and stops with a well-defined post-sale journey, which looks something like:
𝙃𝙖𝙣𝙙𝙤𝙫𝙚𝙧 > 𝙊𝙣𝙗𝙤𝙖𝙧𝙙𝙞𝙣𝙜/𝙄𝙢𝙥𝙡𝙚𝙢𝙚𝙣𝙩𝙖𝙩𝙞𝙤𝙣 > 𝘼𝙙𝙤𝙥𝙩𝙞𝙤𝙣 > 𝙑𝙖𝙡𝙪𝙚 𝙍𝙚𝙖𝙡𝙞𝙨𝙖𝙩𝙞𝙤𝙣 > 𝙀𝙭𝙥𝙖𝙣𝙨𝙞𝙤𝙣 > 𝙍𝙚𝙣𝙚𝙬𝙖𝙡 > 𝘾𝙝𝙪𝙧𝙣
Once these have been clearly defined and mapped, you can start thinking about how Customer Health comes into play. Your Customer Health score is an index of qualitative, quantitative, and behavioural inputs that should give you an indication of how a customer — or cohort of customers — is performing at any given stage of the process.
And with your process embedded in your CRM or dedicated CS tool, your post-sale journey becomes measurable and the insights actionable… before it’s too late.
