- Hi there, Dan Martell here.
Serial entrepreneur, investor, and creator of SaaS Academy.
In this episode, I'm gonna share
with you the top seven customer success metrics
that you can use to monitor all your accounts,
and make sure you don't lose or churn any accounts,
and most importantly, grow your expansion revenue.
And be sure to stay at the end,
where I'm gonna share with you
how to get access to my Precision Scorecard framework,
which is gonna teach you
exactly how to look at quarterly, monthly,
and weekly metrics to make sure you crush your numbers.
Let's get into it.
(energetic music)
Over the last five to seven years,
I've been involved in hiring
probably 50 different customer success managers
across my portfolio company
and 40 plus investments, my own companies,
and really trying to ensure
that we create the best onboarding experience
to make sure that when they land,
they hit the ground running,
and we get the value.
To me, investing a dollar in a customer success manager
should produce $5 of new revenue
if you manage and monitor the right metrics.
Here's how you do it.
These are the seven
that I believe you should be asking those CSMs,
Customer success manager, to be accountable to, report,
and make sure they improve.
Number one, customer churn percentage.
This is the amount of, so it's really simple math.
The month before, how many customers did you have
at the end of the month?
At the end of the following month,
or in that weekly interval if you do kind of a rolling 30
so that it updates a 30-day window, the previous 30 days,
what percent of customers did you lose?
Sometimes it's called logo churn, or account churn,
so be sure to measure this and track it.
Number two, MRR churn percent.
This is the amount of revenue.
So same thing as the customer churn percent.
It's revenue-wise because you have different packages,
plans, upsells, add-ons, et cetera.
So you wanna make sure
that you measure the total revenue, MRR-wise,
at the end of the previous month,
and then you can use that same weekly 30-day rolling average
for the end of the next month
to know how much revenue have you lost.
Total including expansion revenue.
Number three, net MRR churn.
This to me is probably the most telling
on the revenue churn because it's gonna take away
any expansion revenue.
And really just look at the revenue churn on a monthly basis
so you know if people are sticking around
with their payments,
and making sure they're getting ongoing value
from your product.
Number four, expansion MRR percentage.
Expansion revenue for a lot of first time SaaS founders
is a new concept.
Essentially, it's the idea that if somebody starts off
on a $50 plan or $500 plan,
over the lifetime of that account,
what additional revenue do they add on?
And for a lot of SaaS companies,
they have to figure out their pricing, their packaging,
and their plans, make sure that they have a value metric
and some add-on metrics.
And these are all things
that you can Google my name plus those terms
to find a video on my YouTube channel
that covers these in depth.
But understanding on a month-to-month basis
what your expansion revenue,
especially from a customer success manager,
'cause they're accountable for upsells, cross-sells,
and really, revenue retention.
That's why we wanna measure these metrics.
Number five, Net Promoter Score.
Sometimes called NPS.
NPS is actually owned by a company.
They licence the brand, but a lot of people use it,
and it's a really a way for you to measure, and it's great.
When I buy companies, I use an NPS score to understand
how many of their customers would actually be promoters.
Sometimes it's called the growth score.
If you can only get one number
from some company's customer base,
that number would tell you so much
about not only the product experience,
but the customer support, the sales process, everything.
Because it's a simple question that says,
"How likely are you to recommend our company
"to a friend or colleague?"
Score of one to 10.
Nine and 10s are you promoters.
One to six are you detractors.
Seven to eights are your neutral.
And there's a simple math equation
that I'm gonna link to below in the description
that tells you how to get your NPS score.
Just to give you some context.
Most telcos, like an AT&T or Rogers,
they have like a 12 or 13 NPS.
And companies like an Apple or a Virgin,
they'll have upwards to a 60 to 75% NPS,
which is just out of the world.
Most SaaS companies when they start working with me have,
unfortunately, kind of a 25 to 30 NPS score.
We wanna get it up to 55, 60, to really make sure
that we're creating not only customers that are satisfied,
what I call green, but we wanna get them to purple.
Purple are referenceable.
They're ambassadors of your brand.
They're the ones that are gonna promote
and get you referrals.
Incredible metric for you to monitor
on a maybe quarterly or monthly basis
to make sure you customer success manager
is always reporting that feedback to you.
Number six, Customer Satisfaction Score,
also known as CSAT.
The Customer Satisfaction Score is something
that you wanna prompt and ask after
some kind of interaction with your company.
The easiest one that's built
into most customer support tools
is just post support questions.
Having that asked intermittently.
You don't want to do it every time, you may,
but it's really just a quick question of one to five.
Think of it like five stars.
It's like, on a five star level,
how satisfied are you with your customer support experience?
One star, two star, three star, four star, five star.
And that'll give you, as the leader in the organisation,
as you hire those CSMs to make sure that,
because customer success managers should be accountable
for the support side
and really any other interaction with your company.
Could be after they do an executive business review,
or quarterly business review, or QBR,
or any other experience that they have at your company.
You wanna ask them, "How happy were you with it?"
That'll give you a CSAT for that interaction
to allow you to monitor and improve that goal.
And number seven, customer experience score, CES.
CES is one that's not very much talked about,
but it's one that I think is incredibly important
because if you think of a customer's journey
having multiple steps.
My buddy, Joey Coleman,
wrote a great book called "Never Lose a Customer."
He talks about the first hundred days experience
and seven distinct phases that a customer goes through
for all businesses, but specifically to software.
If I think about onboarding, activation, adding a module,
adding an integration, et cetera,
I'm gonna wanna monitor the experience score
for those specific actions
so that my customers can give me feedback
on a one to five effort.
One is a lot of effort, and a five would be little effort.
So if you wanna get some feedback on like,
"Hey, when you added that integration
"for your financial system, what was your CES score?"
Or asking that question
to get that feedback on effort level
will let you know how to prioritise
not only your customer success activities,
but also, potentially, product roadmap.
So quick recap.
Seven customer success metrics you need to be monitoring.
Number one, customer churn percent.
Two, MRR churn percent.
Three, net MRR churn percent.
Four, one of my favourites, expansion MRR percent.
Five, another one of my favourites, Net Promoter Score,
also know as your growth score.
Number six, Customer Satisfaction Score.
And seven, customer experience score.
So as I mentioned at the beginning of this video,
I wanna share with you an exclusive resource
called the Precision Scorecard.
You can click the link below to download your copy.
In it, I share with you the exact template
that I use for managing all my companies
in regard to the KPIs or metrics,
key performance indicators.
How I structure that on a quarterly basis,
looking at the targets, breaking it down per month,
also measuring targets in actuals, rolling averages,
for the weekly score.
And I even give you the list of the metrics
if you're seven million in revenue in SaaS,
and if you're a million plus in MRR,
then you can look at the other.
There's two lists of metrics.
It's all included in that Precision Scorecard.
Click the link below to download that.
If you like this video, be sure to subscribe to my channel.
Click the notification bell,
and leave a comment letting me know
if there's any other metrics that I've forgotten.
As per usual, I wanna challenge you to live a bigger life
and a bigger a business, and I'll see you next Monday.
Investor and creator of the, (sighing) nevermind.