Dear Growth Molecules: As a member of a Customer Success organization, I find that competing priorities can distract from what’s most important – customer key performance indicators. How do I remain focused on KPIs?

By: Andy TrevinoSabina M. Pons

Within the sphere of business to business (B2B), software-as-a-Service (SaaS), there are a plethora of metrics and key performance indicators (KPIs) that companies track. However, when it comes to true customer centricity, there are a few KPIs that truly drive business outcomes for both the customer and, in turn, your company’s bottom line. Defining the KPIs is one part, but continuously prioritizing them among the noise of the -day-to-day is the other part – and that often proves difficult among competing priorities. In this blog post, we will share five tools and strategies to help you do both well.

1. Identify the Right KPIs

The first step in focusing on customer KPIs is identifying the right ones. These KPIs should be directly tied to customer success and should provide insight into how well the company is meeting customer needs. Some key customer KPIs for B2B SaaS companies include:

  • Customer Churn Insights: In B2B SaaS, “churn” refers to the loss of recurring subscription revenue. This can be where customer licensing contracts to a lesser amount, or where the customer leaves altogether. A high churn rate can indicate customer dissatisfaction or a lack of value in the product. Deriving insights about why customers churn is critical.

    An important part of analyzing churn is to understand the root cause. For example, perhaps there is a correlation between the customer persona and the loss of revenue – the decision maker may not be realizing the value, even if the end users are.

    Andy’s Tip: One process I have implemented with teams in the past is post-mortem outreach: CSMs asked customers to provide feedback about their experience. Most customers say yes if you ask with curiosity and empathy and it typically leads to multiple positive outcomes for both you and your customers. They feel heard and may consider your business in the future, and/or you may get previously unknown product or services feedback that is helpful to rethinking your company’s approach.

  • Customer Temperature Checks: There are many ways to monitor customer sentiment. Net Promoter Score (NPS) is one such example that measures how likely customers are to recommend the product to others. A high NPS indicates satisfied customers who are likely to renew their subscriptions, conversely, a low NPS score indicates likelihood of churn. In addition to NPS surveys, my team asks our customers for an informal ‘Temperature Check’ at the beginning of each Performance Review meeting. You can think of the Performance Review as a Business Review. We ask customers to indicate how satisfied they are with our partnership on a scale from one to five. Regardless of the rating, we ask follow up questions to understand why the customer provided that score. If it is good, we want to double down on what’s working. If the score is bad, we want to understand why and address the issue. Asking at the beginning of the call allows our team time to dig into the details during that meeting.
  • Customer Lifetime Value (CLV): This KPI measures the total amount of revenue a customer is expected to generate over their lifetime. A high CLV indicates that the customer is valuable and loyal. However, customers with high CLV started small at one point. Implementing a digital CS, or a tech-touch, model is a scaled approach to providing value to smaller and large customers alike. Segmenting your customer base with CLV potential is one way to organize this approach. I recently implemented segmentation based on cohorts with varying service level agreements so that we service our customers appropriately and provide as much value as possible to every customer.

2. Set Clear Goals

Once the right KPIs have been identified, it is important to set clear goals for each one. These goals should be S.M.A.R.T – specific, measurable, and achievable within a given timeframe. For example, a goal for the churn rate might be to reduce it by 5% within the next fiscal quarter. Clear goals help to keep the team focused and motivated to achieve success. 

Andy’s Tips:  I have implemented OKRs (Objectives and Key Results) in the past and they worked well. It is important that each department’s Objectives are compatible with each other so that teams are all pulling in the same direction. After there is executive alignment, then teams should agree on the Key Results needed to achieve the Objective. Breaking down the OKRs for each individual is very important as well. This will keep individual contributors focused on the activities the business values the most. 

3. Make Customer KPIs a Priority

Customer KPIs should be a priority for every team member in the company. This means that they should be discussed regularly in team meetings, progress should be tracked, and actions should be taken to improve them. In addition, incentives and rewards should be tied to achieving customer KPI goals. This helps to ensure that everyone in the company is working towards the same goal of customer success. Asking customers about their KPIs across the entire customer journey is critical. The more you ask, the more they are discussed, it will encourage your internal teams’ focus on KPIs. 

Andy’s Tips: It is also important to guide customers towards a realistic KPI during the sales cycle, otherwise you may end up increasing churn even though you are talking about customer KPIs across the customer journey. I have implemented processes where we discuss KPIs during onboarding, and at every touch point along the customer lifecycle. When we are not hitting KPIs, we work proactively to optimize. When we are hitting customer KPIs, we work to expand our partnership with that customer. In my opinion, this is the most important metric to keep top-of-mind. I know of teams who create a user profile, within their systems to represent ‘the customer’. That user profile is invited to all internal meetings as a tangible reminder that everything we do is for our customers.

4. Use Data to Drive Decisions 

Data is crucial when it comes to customer KPIs. It is important to regularly analyze data related to customer KPIs to identify trends and patterns. This information can be used to make data-driven decisions and take actions that will improve customer KPIs. For example, if the churn rate is increasing, data analysis might reveal that a certain feature is causing dissatisfaction among customers. This information can be used to improve the feature and reduce churn. 

5. Continuously Monitor and Iterate

Customer KPIs should be continuously monitored and iterated upon. This means that they should be reviewed regularly, and adjustments should be made as needed. For example, if a goal for the churn rate is not met, the team should analyze the reasons for the failure and make adjustments to their strategy. Continuous monitoring and iteration help to ensure that the company is always improving and moving towards the goal of customer success. 

Andy’s Tips: Companies should value creation of a trusting culture within a business such that feedback is encouraged, and rewarded. The Speed of Trust by Stephen Covey provides an excellent framework to create such an environment. 

In conclusion, focusing on customer KPIs in B2B SaaS despite competing priorities is crucial for success. Some foundational steps are to identify the right KPIs, set clear goals, and make customer KPIs a priority. Other ways to stay laser focused on customer KPIs include  using data to drive decisions and continuously monitoring and iterating. When B2B SaaS companies do this they are primed to nurture customer needs and drive mutual business outcomes.

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