8 Ways to Measure Customer Success ROI

customer success ROI metrics Consider it a buzzword or not, ROI is still important.

Executives care about it. They want to know that company investments are worth it.

When it comes to building or growing a new department such as Customer Success, especially if you don't have experience in it, ROI is equally important.

It's normal to ask if it's worth it and to wonder how to measure the success of the investment.

I've always advised channel partners to ensure that they have a way to measure Customer Success and how their CSMs are doing from the very start. You don't want to start a new division or a new initiative and have your boss drop it a few months down the line because you forgot to measure its success.

With Customer Success still being a relatively new and sexy job, how to measure it is not as clear cut as it is in Sales for example.

Customer Success is also a lot more about relationships than it is about numbers. but even though it can be subjective, there are still certain activities and outcomes you can track.

I recently spotted two infographics about metrics to measure Customer Success ROI that I want to go over today.

8 Ways to Measure Customer Success ROI

The infographics go through the below measures in a different order but I'm listing them based on importance and monetary value because like it or not, you still have to prove numbers-wise that Customer Success is worth it.

#1. Upsells - when your customers start upgrading their product or service looking for more features then your Customer Success efforts are working because your customer is getting the most out of your offering and is happy to pay you more to get more value.

#2. Cross-sells - similarly to upsells, if your customer starts buying additional products or services from your product line, then again they trust your offerings and want to taste more of them.

#3. Renewals - if your customers renew their purchase for another year or more, then you know that your product or service as well as your Customer Success team are truly adding value.

#4. Monthly Recurring Revenue (MRR) - this is how much revenue you expect in the next month and a Customer Success Manager's job is to ensure that you don't lose out on it through cancellations or downgrades. This is especially important if your subscriptions are monthly.

#5. Annual Recurring Revenue (ARR) - just as MRR, ARR looks at the revenue amount for the year and quite important when your subscriptions are annual or longer.

#6. Conversions - often in SaaS you offer free trials so that your potential customers can get a taste and your Customer Success team nurtures this testing phase ensuring the the prospect gets the most of it. If they purchase, then you know your methods are working and this is a direct monetary value.

#7. Net promoter score (NPS) - lots of companies use surveys to understand how willing customers are to promote your product or services to others. It's important to track this on an ongoing basis, note trends and see if the score is going up or down and always have open-ended questions so you can analyse why certain things are changing.

#8. Ticket resolution time - when something goes wrong or when your customer needs immediate help, they often submit support tickets and they get impatient because they want them solved ASAP. If you don't react quickly, your customer might get angry and that diminishes their relationship with you or things could escalate. That's why you should track how quickly you're resolving customer issues.