5 Ways to Improve Your Net Promoter Score

21 Customer Success Metrics KPIs & Metrics With Benchmarks

Stellar customer support scores are great. What’s even better? When your product or service is intrinsic to your customer’s success — and you can prove it. That’s the goal of measuring customer success KPIs, where you gather data to track churn, recurring revenue, expansion revenue, customer lifetime value and other metrics.

That data can inform actions you’ll take to improve your net promoter scores and continue to increase customer satisfaction.

What Are Customer Success KPIs?

Customer success KPIs are performance measurements that help you evaluate your customers’ satisfaction with your products or services.

Tracking customer success KPIs will help measure the effectiveness of your customer-related efforts. The end goal is to ensure you have happy, loyal and long-term customers that generate dependable revenue for your company.

Key Takeaways

• Measuring customer churn shows whether you’re steadily improving customer satisfaction and retention.
• Examine KPIs connected to repeat customers to determine which clients add most to profitability.
• Expansion revenue measures the additional potential of recurring revenue generated by existing customers.
• Net promoter scores determine the likelihood of a customer recommending your company’s products or services.
• Customer satisfaction KPIs measure how your company’s products and services meet or surpass your customers’ expectations.

What is customer success?

Customer success is a business practice that ensures customers have positive outcomes when using your service or product. As a result, they will be sources of recurring revenue for your company.

This process requires attentiveness to customer care. You need to listen to clients’ experiences and feedback. Then, use that knowledge to implement improvements so that your customers are happy and create lifetime value for your company.

Customer success vs. customer support

Customer support refers to the range of services that give customers the assistance they need to use your products or services.

Customer success encompasses the methods you use to ensure clients are satisfied with your products or services.

Solid, thorough customer support can help increase customer retention. However, customer success measurements will drive substantive changes aimed at improving customer satisfaction, leading to improved customer retention.

Why picking the right customer success KPIs is important

Customer success KPIs measure your company’s performance from the perspective of your customers. The KPIs you choose should align with business objectives and show where you’re succeeding — and where you’re in need of improvement.

In short, the right KPIs provide insights that enable you to:

• Increase customer retention;
• Decrease dependency on new-customer acquisition efforts;
• Expand upsell opportunities;
• Convert customers into advocates; and
• Grow your company’s profitability.

Top Customer Success KPIs

The top customer success KPIs look at customer retention and experience and the cost of keeping existing clients versus recruiting new ones. Select from this collection of metrics to create a customer success dashboard.

Additionally, you may want to look at inventory management KPIs to ensure that products are available and delivered to customers in a timely manner. If there are delivery issues, you should look at logistics KPIs to discover what’s going wrong. On-time arrival of your goods in pristine condition is the first line of defense for ensuring customer satisfaction.

Customer retention metrics

Customer retention KPIs look at how well your company is doing at keeping clients during a given time period. These metrics express how many customers are loyal and expect to continue to do business with your organization.

Customer churn

Customer churn is the percentage of customers that abandon your product or services over a period of time. Measuring customer churn helps determine whether you’re improving customer satisfaction and retention.

Customer churn is useful for identifying problems and implementing changes to ensure customers are satisfied and contributing dependable, recurring revenue. Here’s how to calculate customer churn:

Churn rate = # customers at the beginning of period – # customers at the end of period / # customers at the beginning of period

Renewal Rate

Renewal rate measures how many customers retain the use of your products or services. A low renewal rate indicates that a smaller-than-desirable percentage of customers are experiencing success or can continue to afford your products or services.

Track renewal rates when working to adopt stronger customer-success programs. Here’s how to calculate your renewal rate:

Renewal rate = # customers who renew / total # customers up for renewal X 100

Customer retention cost (CRC)

CRC tracks the amount of money spent to retain existing customers. This metric looks at the expenses — tools, time and materials — companies spend to promote customer success and keep from losing business to competitors.

Here’s how to calculate customer retention cost:

Customer retention cost (CRC) = total retention costs (tools + time + materials) / # retained customers

Average revenue per account (ARPA)

ARPA is the average amount of revenue generated per account divided by a time period. This metric helps you forecast revenue-generating capabilities, your ability to meet sales goals and forecast costs per customer compared with the amount of revenue each generates.

Here’s how to calculate average revenue per account:

Average revenue per account (ARPA) = total recurring revenue in period / total # monthly customers

Recurring revenue KPIs

Recurring revenue is customer revenue that will most likely continue for a time period. Customer success KPIs help determine which customers’ revenue will most likely be recurring and those whose business might be at risk due to low customer success scores.

Monthly recurring revenue (MRR)

Monthly recurring revenue is a month-by-month measurement of consistent revenue. Determine MRR by multiplying average customer revenue by the number of monthly customers that contribute recurring income.

In short, MRR is the expected revenue your company expects to earn within a given month. Here’s how to calculate monthly recurring revenue:

Monthly recurring revenue (MRR) = average revenue per customer X # of monthly customers

Net monthly recurring revenue (MRR) churn

Net monthly recurring revenue churn shows customer revenue churn minus any increases from existing customers that purchased more of your products or services.

Here’s how to calculate net monthly recurring revenue churn:

Net MRR churn = churn MRR – expansion MRR (revenue gained from upgrades or service expansions) / beginning-of-month MRR X 100

This KPI represents the negative percentage of change in your company’s monthly recurring revenue due to cancellations and downgrades. This measurement includes revenue from existing customers upgrading or expanding their use of your products or services.

New customer monthly recurring revenue (MRR)

New customer monthly recurring revenue (MRR) is the revenue your company expects to earn within a given month from new customers. The KPI measures the recurring revenue based on the average revenue of new customers multiplied by monthly new customers that contribute to recurring revenue.

Here’s how to calculate new customer monthly recurring revenue:

New customer MRR = average monthly revenue per new customer X total number of monthly new customers

Annual recurring revenue (ARR)

Annual recurring revenue is the revenue your company expects to earn within a given year. The KPI is a year-over-year measurement of recurring revenue based on the average revenue received from customers multiplied by the number of customers that contribute to recurring revenue annually.

Here’s how to calculate annual recurring revenue:

Annual recurring revenue (ARR) = overall customer revenue per year + recurring revenue from add-ons or upgrades – revenue lost from customer cancellations

Expansion revenue

Expansion revenue measures the additional recurring income generated by existing customers, as agreed to in their contracts.

Expansion monthly recurring revenue (MRR)

Expansion MRR measures any additional monthly recurring revenue existing customers contribute beyond the cost for your products or services. Here’s how to calculate expansion monthly recurring revenue:

Expansion MRR = total additional revenue from current customers within a month

Expansion annual recurring revenue (ARR)

Expansion annual recurring revenue looks at any additional annual recurring revenue (ARR) from existing customers in excess of the cost for your products or services. Here’s how to calculate expansion ARR:

Expansion ARR = overall customer revenue per year + additional revenue from add-ons or upgrades – revenue lost from customer cancellations

Customer lifetime value (CLV)

Customer lifetime value (CLV) is a program-level customer success metric. The KPI predicts the net profit you’ll receive from a customer based on your lifetime relationship with them. Here’s how to calculate customer lifetime value:

Customer Lifetime Value (CLV) = total revenue earned from a customer (annual revenue X average customer lifespan) – initial cost of acquiring a customer

Net Promoter Score (NPS)

A net promoter score is a KPI that indicates how customers view your company and whether your reputation is sound. The score looks at the percentage of your customers likely to recommend your company’s products or services.

Here’s how to calculate NPS:

Net Promoter Score (NPS) = percentage of promoters – the percentage of detractors

Use this metric to determine if you need to make improvements to your customer success criteria and practices. Look at how your NPS score compares with others in your industry to gauge how well customers think you’re doing versus competitors.

Customer satisfaction metrics

Customer satisfaction KPIs measure if your company’s products and services meet or surpass expectations. In short, are your customers happy and willing to recommend you to others? These KPIs can inform customer adoption rates and should be used in conjunction with qualitative customer feedback.

Customer Satisfaction Score (CSAT)

Customer satisfaction score is a KPI that measures your company’s customer service expertise and the quality of your products and services, gathered from surveys or ongoing forms customers fill out at various stages. Here’s how to calculate a customer satisfaction score:

Customer satisfaction score (CSAT) = # positive responses / # responses X 100

Customer health score

A customer health score indicates how happy and satisfied your customers are with your products and services. Use this number to gauge whether they are willing to promote your company’s offerings based on their experiences and continue to use your products or services.

Here’s how to calculate your customer health score:

Customer health score = percentage of satisfied customers – percentage of dissatisfied customers

First contact resolution rate (FCR)

First contact resolution is the percentage of times your service desk could resolve an issue on the first interaction with a given customer. In short, this metric looks at the first time a customer reached out to your company with a problem. Was the issue resolved, or did they leave frustrated?

Here’s how to calculate the first contact resolution rate:

First contact resolution rate (FCR) = resolved incidents on first contact / total incidents X 100

First response time

First response time is how long it takes between a given customer raising an issue and an agent proactively responding to it. Here’s how to calculate first response time:

First response time = # all first-response issues / number of resolved issues

Additional KPIs for SaaS

Software as a service (SaaS) KPIs measure daily usage, user adoption rate, customer service escalations, customer engagement and overall happiness. SaaS firms can use these metrics to make data-driven decisions to enhance sales, marketing and overall customer success.

Daily usage

SaaS daily usage measures how many of your customers are using your SaaS product on a given day. Here’s how to calculate SaaS daily usage:

Daily usage = # of daily users / total # of users X 100

Adoption rate

SaaS adoption rate measures the percentage of new customers adopting and actively engaging with your SaaS product. Here’s how to calculate SaaS adoption rate:

Adoption rate = # new users / total # of users X 100

Escalation to customer success

SaaS escalation to customer success is the percentage of customers whose issues with your service are sent to your customer success or customer service teams. Here’s how to calculate SaaS escalation to customer success:

Escalation to customer success = # customers with an issue escalated to customer success / total # of customers with an issue X 100

Customer engagement

SaaS customer engagement measures the percentage of clients taking part in your SaaS-related programs. Here’s how to calculate SaaS customer engagement score:

Customer engagement = total # customers engaging in program / total # customers X 100

Customer happiness

SaaS customer happiness is a KPI that measures your customers’ overall level of contentment with your SaaS company’s products and/or services. Here’s how to calculate a SaaS customer happiness score:

Customer happiness = # positive responses / # responses X 100

Customer Success Benchmarks

Customer success benchmarks help you monitor and measure the effectiveness of your products and services in promoting customer success. While there are no definitive industry-standard benchmarks, the following suggestions can help you ensure higher customer success scores.

• Customer churn guidelines

  Use customer churn to reflect on why customers are abandoning your product or services over a given period of time. In general, business-to-business (B2B) organizations should aim for a customer churn percentage of 5% or lower. Business-to-consumer (B2C) companies should aim for a customer churn percentage of 7% or lower. While there is no definitive industry-by-industry customer churn breakdown, any business should strive to have a customer churn rate of no more than 7%.

  Customer churn varies by industry. According to Statista, 2018 churn rates include:

  • Cable: 28%
  • Retail: 27%
  • Financial: 25%
  • Online retail: 22%
  • Telecom: 21%
  • Travel: 18%

• Monthly recurring revenue (MRR) benchmarks

  MRR helps you determine how much you expect to earn within a given month. When looking at this number, best-in-class companies should strive for an MRR churn rate of less than 1%. Small and midsize companies should aim for an MRR churn rate of less than 2.5%.

• Net MRR churn recommendations

  This metric measures revenue lost monthly due to cancellations or account downgrades. Strive for a negative net MRR churn score, which indicates expansions outweigh cancellations and downgrades.

• Expansion MRR KPI

  Your expansion MRR, which looks at monthly revenue gained from upgrades or service expansions, should be enough to make up for any negative net MRR churn.

Net Promoter Scores

Net Promoter Scores indicate how customers perceive a brand based on a simple question: On a scale of zero to 10, with zero “not likely at all” and 10 “extremely likely,” how likely is it that you would recommend the company to a friend or colleague?

Promoters are those who choose a nine or 10. Passives give a score of seven or eight. Detractors score a brand between zero and six.

When calculating your NPS, your goal should be 70% or higher; that is, most customers choose seven or above. That indicates your customers are mostly or very happy with your products and/or services. An NPS of 31% to 69% suggests that your customers are generally satisfied with your products and/or services. An NPS of 0 to 30% indicates that you need to improve.

NPS by industry

As with customer churn, it’s worthwhile to compare your NPS score with averages for your industry. According to Retently, here are some 2020 NPS benchmarks by industry:

• Education and training: 71%
• Insurance: 70%
• Advertising and digital marketing services: 61%
• Digital marketing: 61%
• Consulting: 51%
• Ecommerce: 48%
• Software and technology: 44%
• Construction: 43%
• Financial services: 34%
• Software as a service: 30%
• Transportation and logistics: 29%
• Healthcare: 27%

Customer Success Best Practices

Customer success requires reducing churn, upping your NPS metrics and constantly striving to improve your products and services. You need to be dedicated to your customers, listen to their needs and assist them throughout their journeys.

Keep the following customer success best practices in mind:

Pick the right metrics for your business: Whether you measure customer engagement, customer churn, customer retention, recurring revenue — or all of the above — ensure metrics align with company goals. When determining objectives, consult business performance KPIs.

Track metrics consistently with real-time reporting: Use the right tools to ensure you always have up-to-date customer-success-related data. An integrated, cloud-based business system can accurately record, monitor and disseminate metrics that track customer satisfaction.

Share customer-related data across teams: Customer success depends on sales, marketing, support, development, quality assurance and all other parts of the business. Share customer success metrics with departments proactively, so your organization can make company-wide improvements.

Establish company goals for proactive customer engagement: Customer success affects your company’s revenue and reputation. You must set goals — improving NPS, reducing churn — to guarantee continual customer satisfaction improvements.

Customer Success KPI Dashboards

Customer success KPI dashboards provide a visual overview of your company’s relationship with customers.

Customer success dashboard examples

The following customer success dashboard examples include details of their unique purposes and their respective metrics.

Customer success KPI dashboard

A customer success KPI dashboard measures existing customer relationships and can help pinpoint ways to ensure customers are satisfied with your products and/or services. A customer success KPI dashboard includes number of paying customers, number of new customers, MRR change, new MRR, new AAR, number of upsells, number of downgrades, downgrade MRR, downgrade ARR, churn number, churn MRR and churn ARR.

Customer success dashboard for SaaS companies

The KPIs on this dashboard will help you keep tabs on SaaS-specific customer success metrics and track how well customers interact with your products. Besides historical SaaS customer satisfaction data, KPIs include daily usage, adoption rate, escalation, customer engagement, recurring revenue, net retention, net MRR, lifetime customer value, cost to acquire customers, canceled accounts, account retention and customer happiness rate.

Customer success executive dashboard

A customer success executive dashboard is the perfect tool for getting a bird's-eye view of your team's performance and seeing how close you are to achieving positive customer-satisfaction scores. Use this dashboard to drill down into individual KPIs to identify areas for improvement. Customer success executive dashboard KPIs include team-wide metrics for work focus, tasks completed, overdue tasks and weekly trends.

Customer success manager metrics dashboard

Use a customer success manager metrics dashboard to ensure you're meeting the company's customer success goals and milestones. A manager needs to view individual and team-wide KPIs and see how close management is to attaining benchmarks set by the executive team. This dashboard includes customer satisfaction score (CSAT), first call resolution (FCR), mean time to resolve (MTTR), customers impacted by a major case, child cases auto-created from a major case, open backlog blocked, open backlog unblocked and backlog growth.

Customer success team metrics dashboard

The goal of a customer success team metrics dashboard is to ensure all employees are doing their parts to meet a company's customer-success criteria. In addition to team metrics, this dashboard provides a way to drill down into individual performance. KPIs on a team metrics dashboard include average first response time (AFRT), average reply time (ART), number of support tickets, number of ticket backlog, first contact resolution rate, resolution rate, average handle time, NPS and CSAT.

How NetSuite Helps You Track Customer Metrics and KPIs

Monitoring customer success KPIs is crucial for tracking and improving your customers’ satisfaction, which in turn affects your company’s reputation and revenue. Customer service management software gives everyone in your company that interacts with customers — sales, support, service, and fulfillment — access to complete, key customer data in real time to better support your customers and drive upsell and cross-sell efforts, as well as boosting customer satisfaction with self-service tools. That’s why it’s essential to have a real-time customer success tool that powers a KPI dashboard that measures customer satisfaction.