If there is a singular secret weapon in the war on SaaS customer churn, it's ensuring that you have happy customers. It's not by accident that the most successful B2B SaaS companies invest heavily in optimizing customer experiences and consistently generate more revenue than those that don't. In fact, research shows that 86% of buyers will pay more for goods and services if a company also provides a stellar customer experience.
So now that you know how much the customer experience (CX) matters, how do you measure the quality of your own company's CX strategy, and why should you? Read on to learn more.
Why Tracking and Measuring Customer Experience Matters
The B2B SaaS business model highly depends on customer retention and subscriptions. This means offering an outstanding customer experience is vital to a SaaS company's long-term success. To determine if a business is hitting crucial key performance indicators (KPIs), it must regularly track and measure customer performance data.
Properly measuring the success of your customer journey requires a systematic approach to gathering and analyzing key CX metrics. By engaging in this behavior, your business can significantly reduce customer churn and extend customer lifetime value. Measuring the customer experience will even allow you to pinpoint opportunities for improving your products and services, which is also essential in reducing churn.
Several CX Metrics B2B SaaS Companies Should Explore
Net Promoter Score, also called NPS, is a popular metric used to monitor customer happiness. However, NPS is not the most effective metric to track when relied upon exclusively. You will also want to follow the metrics listed below to enhance the insights you can draw from your customers' journey.
Customer Effort Score
The Customer Effort Score, or CES, is a transactional metric that tracks how much effort a customer must apply to get what they need from your product or service. The more effort a customer must exert to find information or to reach out to customer service, the more negativity this metric will reflect. Ideally, your CES should indicate a high level of ease of use.
The Customer Satisfaction Score, or CSAT, helps companies understand how satisfied customers are with a particular product or service. CSAT responses are often explicitly tied to a specific product, service, or experience. This means they can deliver granular insights on a micro-scale.
Customer Retention Rate
Customer Retention Rate measures the number of customers that stay subscribed to a B2B SaaS company's product or service over time. Observing the Customer Retention Rate can help you better understand what you're doing right to build customer loyalty so you can lean into a winning strategy.
Customer Churn Rate
Closely tied to Customer Retention Rate, the Customer Churn Rate tells a B2B SaaS company how many customers it's losing over time. Tracking Customer Churn Rates helps a business gain insight into problems or weaknesses in products, services, or the Customer Success process so that problems can be eliminated.
Customer Lifetime Value
Customer Lifetime Value, or CLV, is a direct indicator of the strength of your Customer Success strategy. It's a metric that predicts the total revenue generated over the entire customer life cycle. The longer a customer stays with your company, the higher the value. At a glance, CLV can be used to forecast future revenue and make adjustments to Customer Success models as needed.
Brand Alignment Score
Developed by CX Strategist Nicholas Zeisler, a company's Brand Alignment Score measures customers' perception of how well you deliver on your brand promise. It tracks customers' experience with your brand and provides insights on how a company can better deliver on its value proposition.
Customer Health Score
A Customer Health Score is a comprehensive metric built from multiple data sources. Each company can use several customer experience KPIs to determine if a customer's relationship with the business is healthy or in jeopardy of resulting in a churn event. A Customer Health Score can predict future customer behaviors, allowing CS teams to take proactive measures to circumvent churn.
How Do You Choose Which CX Metrics to Track?
No two B2B SaaS companies are exactly alike, and each one will have its unique approach to choosing which customer experience metrics to track. Most important is that a company has a strategy behind which specific metrics it chooses to use. The goal of any data analytics plan is to glean insights that directly apply to making improvements. Ultimately, B2B SaaS companies should select metrics that deliver the data they need to be proactive.
What Tools Do You Need To Measure Customer Success
You need the right tools to track and measure the customer experience. When determining the data stack for the job, you should know precisely what you need to track and why to avoid buying multiple apps you may never use.
At a minimum, the selected software should include strong data analytics capabilities, robust automation to minimize manual tasks, intuitive visual reporting that can be quickly and easily understood, and the ability to build 360-degree data views of every customer.
Vitally.io is one such software offering a full-featured Customer Success platform that replaces the requirement for building a bespoke CS tech stack from scratch. As a comprehensive SaaS product, Vitally provides B2B companies with every tool needed to effectively manage and measure the customer journey from end to end in one platform.
Investing in the customer journey is a requirement when running a sustainable B2B SaaS company. Any company that wants to tackle customer churn needs to measure the customer experience to gather actionable insights. Doing so requires using the right software to ensure your company is timely and competitive with its Customer Success strategy.
Vitally allows B2B SaaS companies to achieve the most from their Customer Success process with minimal effort. Request a demo of our platform today to see how easy it is to track and measure your company's customer experience!