Free Customer Success Tool - Customer Success Metric Metric: Customer Health Score (CHS)

Formula for Customer Health Score (CHS)

CHS doesn’t have a universal formula as it depends on the factors a company values most. Typically, it’s calculated as a weighted score based on individual metrics.

What CHS Includes

Engagement Metrics

• Frequency and depth of customer interactions with the product.
• Example: Daily or weekly active users, feature usage.

Customer Satisfaction

• Measures like NPS (Net Promoter Score), CSAT (Customer Satisfaction Score), or feedback surveys.

Product Adoption

• Tracks how thoroughly customers are using the product’s core and advanced features.

Support Interaction Quality

• Evaluates responsiveness and resolution of customer support tickets.

Revenue Indicators

• Payment history, upsell opportunities, or likelihood of renewal.

Why CHS Matters

Proactive Risk Management

• Identifies accounts at risk of churn before it happens.

Resource Allocation

• Helps CSMs prioritize high-value accounts or those needing immediate attention.

Customer Success Insights

• Indicates where customers might be struggling and informs targeted interventions.

Impact on Business Goals

• A strong CHS correlates with better retention, renewal rates, and upsell opportunities.

Key Drivers of CHS

Timely Onboarding

• Faster Time to First Value (TTFV) boosts customer confidence and engagement.

Regular Engagement

• Continuous usage and communication improve customer perception of value.

Positive Support Experiences

• Quick resolutions and proactive outreach increase satisfaction.

Effective Product Fit

• Clear alignment between the product’s capabilities and the customer’s goals.

Aligned Expectations

• Ensuring the customer’s experience matches what was promised during the sales process.

How to Improve CHS

Track Usage Data

• Identify and address feature underutilization or usage declines.

Regular Check-Ins

• Maintain open communication to understand customer goals and challenges.

Personalized Support

• Tailor solutions to customer-specific pain points or requirements.

Educate and Enable

• Provide resources and training to increase product adoption and efficiency.

Close the Feedback Loop

• Act on customer feedback to show you value their input and are improving based on it.

Tools to Track and Improve CHS

Customer Success Platforms

• Churn Assassin, Gainsight, Totango, ChurnZero to calculate and monitor health scores.

Analytics Platforms

• Tableau, Looker for analyzing health trends and drilling into problem areas.

CRM Systems

• Salesforce, HubSpot to centralize account data and monitor customer behavior.

Conclusion

Customer Health Score (CHS) is essential for CSMs to assess account stability and satisfaction. By combining data from multiple touchpoints, CHS provides actionable insights for improving customer experiences and minimizing churn risks. A robust health score framework ensures CSMs focus their efforts where it matters most, driving stronger relationships and better outcomes for customers.