How To Track The Effectiveness Of Your Customer Success Team

Customer Success is a key function in B2B organizations. It’s also one of the most complex roles to measure.

Unlike some roles where a team or individual contributor’s performance is reflected in neat, quantifiable metrics, Customer Success defies simple evaluation. Why? Because it touches on so many different aspects of the business, from customer communication to sales and even product development

Trying to measure your CS team’s performance across all these functions can be too much to keep up with. So, we asked CS leaders from Vitally and Compt what they focus on when it comes to tracking their team's efforts.

1. Keep an Eye on Customer Success Metrics

CS metrics are the ongoing parameters for measuring the overall health of a business. You can use them to assess whether your CSMs are on track to meet their business-focused KPIs (which we’ll cover in a bit).

You can track CS metrics in a homegrown BI tool, or with an off-the-shelf Customer Success Platform. 

Related: Build vs. Buy: Why Developing Your Own CSP Is Never a Good Idea

Product Adoption and Usage

Product adoption and usage refers to how well customers are using your tool. 

“Increased product usage can directly translate into revenue in the case of variable pricing, where the more a customer uses the tool, the more money you earn,” explains Sarah Steingraber, Manager of Customer Success at Vitally. “It can also be an account expansion and renewal indicator.” 

The typical way to measure product adoption and usage is to track your number of daily and active users. But Sarah puts a twist to this.  

“We specifically monitor the adoption usage of the tool by our end users. So, it’s not only about the product usage of the champion we work with day-to-day. It’s about their team. Are they using the tool too? What are the team’s monthly, weekly, and daily active user percentages?”

Compt, an employee benefits reimbursement platform, uses a similar tactic. 

“We are very engaged with our platform metrics. In our CS platform, we measure user activation, engagement, and overall product utilization. As a customer experience team, we need to make sure our administrators and end users engage with our platform regularly and that we give them the help they need. This engagement also helps us prioritize enhancements and process updates,” explains Mary Migiano, Head of Customer Success at Compt. 

Related: Vitally’s product event history dashboard

Net Revenue Retention Growth 

Net Revenue Retention measures the percentage of revenue retained from existing customers after accounting for any churn, contraction, or expansion in their spending. Increased NRR indicates that your CS team is proactively addressing churn risks and capturing expansion opportunities.

NRR = [(Starting MRR + Expansion MRR) – Churned MRR] ÷ Starting MRR

Let's say a SaaS company started the quarter with $100,000 in monthly recurring revenue (MRR) from its existing customer base. Over the course of Q2:

  • $20,000 worth of contracts were renewed or upsold to existing customers
  • $10,000 worth of contracts were lost due to churn (customers who cancelled their subscriptions)

To calculate NRR: [(50,000 + 20,000) – 10,000] ÷ 50,000

That is: 60,000 ÷ 50,000 = 1.2

Multiply the result by 100 to get the percentage value. That is 1.2 x 100 = 120%

This indicates that the company retained 120% of its revenue from existing customers after accounting for churn, upgrades, and additional purchases.

Net Renewal Rate 

Net renewal rate is the percentage of customers that renewed their subscriptions out of the total number of possible renewals, including any expansion revenue from upsells or additional services. It clearly measures how successful a company is at retaining its existing customers.

Net renewal rate = [(Revenue renewed + Expansion revenue)/Revenue up for renewal] x 100

Let's say a SaaS company has the following data for a given period:

  • Total revenue up for renewals: $100,000
  • Revenue renewed: $80,000
  • Revenue gained from upsells or upgrades: $28,000

To calculate the Net renewal rate: [(80,000 + 28,000)/100,000] x 100

That is: 108,000/100,000 x 100

So, the net renewal rate for that period is 108%

If you want to avoid crunching these numbers manually, you can use our free CS metrics calculator. You only need to input the data (per the formula) to automatically get your net renewal rate. 

2. Set Performance KPIs Based on Business OKRs

Break down revenue and retention OKRs into specific performance goals (KPIs) for your Customer Success team and track them using CS metrics. This helps you directly quantify your CS team's impact on the organization's bottom line.

Suppose one of your organization’s OKRs is: increase revenue by 15%. In that case, your CS team’s KPI can be: upsell [x] number of accounts per quarter or open at least 15 opportunities per month. Then, track metrics like net revenue retention growth and net renewal rate to see if the team is on course to hit these goals.

“It is even more important to set attainable goals,” says Mary Migiano. “Many times during my career, I have seen very aggressive goals set. So aggressive that it was commonly acknowledged that meeting them was impossible.”

As a CS leader, it’s your job to set your team up for success. As you set KPIs, think about how your CSMs will accomplish them and if there are any obstacles out of the team’s control. 

For example, when setting your retention goal, you should clearly identify which customers will likely churn in the given timeframe. Say you have 1,000 customers and set a goal for 95% retention, but you know that 75 customers have already expressed their intentions to churn. In this case, you are setting up your team for possible failure. 

3. Collect Customer Feedback

There are two ways to collect CSM feedback from your customers. 

Ask Them

Ask customers for feedback about their experience and indirectly surface feedback about a CSM through that process. Compt does this by measuring Happiness Scores through its help desk software. 

“We administer customer satisfaction score (CSAT) surveys each time our users communicate with our support team to determine their “happiness” with the interaction. We also survey administrators and platform users on their experience using Compt,” says Mary Migiano.

Vitally does something similar. “We use Customer Health Scores to track key metrics for every book of business, including net promoter scores (NPS),” says Sarah. 

“Suppose I have two CSMs managing their books of business, and one person's book is healthy while the other is unhealthy. In that case, the person with the healthy book may be doing something differently or more effectively.” 

Listen to Customer Calls

Surveys don't always tell the full story of a CSM’s interaction with the customer. Say the CSM didn't challenge the customer enough; that's not something you'll know through CSAT and NPS surveys. The only way to discover it is to listen to the call firsthand. 

Sarah suggests you do this as a team coaching activity. “Organize call reviews where you and the team listen to recorded customer conversations. You’ll discuss what worked really well and what didn’t and brainstorm ways to improve future calls.” 

4. Set KPIs Outside of Business OKRs

“Understandably, the CS team is held accountable for business OKRs because, ultimately, our work drives these results,” says Sarah Steingraber. “However, in the market that we've seen in the last year, organizations are cutting budgets, and most retention and revenue OKRs are now out of your CS team’s control. So, you need to benchmark their performance against other things.” 

The best way to do this is to set targets for core tasks. “Say we’re rolling out a new feature; I’m setting a target for my CSMs to identify [x] number of beta testers within a specific period,” says Sarah. 

You can also set targets for core role competencies. “I typically highlight these competencies in my one-on-one conversations with the CSM and give them a chance to be coached first, explains Sarah. “Then, I’ll measure how well they develop and apply these skills over the next quarter as part of their performance review.” 

You can track these KPIs as Projects in Vitally. This gives you complete visibility over tasks and milestones — so you'll see what your team has accomplished and if they're on track to hit their other targets. 

5. Create Visibility For Team Tasks and Goals 

That's where a Customer Success Platform like Vitally comes in. It serves as a single source of truth for tracking customer interactions, CSM activities, and team KPIs. 

Some Vitally features that really stand out for CS team management include: 

  • Dashboards: Create custom dashboards based on customer data, KPIs, and CSM activities. 

  • Customer health scores: Automatically track key engagement metrics across customer segments and customer life cycle stages to identify churn, renewal, and expansion opportunities proactively. 

Learn more: What are customer health scores? 

  • Projects: Organize team tasks to have a bird eye's view of what everyone is working on. You can group tasks to form milestones and track how close the team is to hitting them using custom status updates.

Here’s what Compt’s team says about integrating Vitally into its CS workflow. 

“Vitally has given us much more visibility on our platform metrics, tasks, and project-oriented items. Since implementing Vitally a year ago, we have transitioned many processes into the CSP to measure and track our progress more effectively in one place. This includes onboarding implementations, contract renewals, Quarterly Business Reviews (QBRs), customer check-ins, and our day-to-day tasks.”

Create the Processes and Capacity to Help Your CS Team Thrive

If you want your CS team to be effective, you must invest in the right tools and processes. Setting realistic goals and using a CSP are essential parts of this, yes. But, maintaining a good CSM-customer ratio is often overlooked. 

“So many companies wait until they are behind in their goals or until their team has too large of a workload before they even begin considering recruiting a new employee or posting a new job opening for the team,” says Mary Migiano. 

Assess your CSMs' bandwidth regularly to ensure they can handle new tasks and meet KPIs without burning out. That’s how to maintain a healthy and high-performing team.  

Enjoyed reading this? Check out our Success Network for other CS team management resources. 

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