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Using customer health scores to improve customer experience

8 min read
What is a customer health score, and how can it help you improve customer satisfaction and retention? Learn more about reducing churn and improving account health using our guide to customer health scores.

You might be using several metrics to measure your customers’ interaction with your brand, but account health can often be left to your customer success and account managers to estimate.

A health score can help you check what’s working in your customer relationship, what further support might be needed, and how your customer success team can build the relationship further. It also helps account managers to think about the holistic account health, not just the stakeholders they interact with most often.

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What is a customer health score?

A customer health score is an understanding of how your customers measure up against an outcome you find valuable. Metrics you might include in the judgement of your account “health” are:

  •         The length of time they’ve been a customer
  •         Rate of product usage or service usage (the number of products in a range that they have bought, for example)
  •         The number of times they’ve been successfully upsold a product or service
  •         How often they contact support
  •         How their account has grown over time (more products or services bought, for example)
  •         Their customer feedback
  •         Their engagement with the community (on social media, in feedback surveys or comments, in recommendations and more)
  •         How often they participate in marketing efforts (such as giving references)

These are only some of the metrics you can use to build a picture of what your customer health looks like. There are going to be many overlapping details across businesses, but personalization is important. Each companies’ understanding of “health” is likely to be different depending on their goals.

Your customer health score formula will take all of the metrics you find valuable and condense them into a score, with weighting given to each metric. Your scoring system will summarize all of your metrics’ data points and give you a simple way of understanding which customer relationships are “healthy” and which are in need of some input from your customer success team.

Why is a customer health score important?

Your customer health score is an efficient way of taking several metrics and viewing them at a quick glance. As customer health scoring is so personalized to each business’ goals and values, the scoring system helps customer success managers to easily see where improvement might be needed. This will help account managers and executives know where they have opportunities to grow accounts to increase revenue or where to proactively take action to reduce the likelihood of accounts churning.

Discover best practices for improving your B2B account management. 

Calculating your customer health scores

To create a useful customer health score formula, you will need to take a few steps to establish what you find valuable as a measurement, and how you will weight each useful metric to develop your overall score.

1. Determining valuable metrics

Collecting customer data across all your platforms, outreach channels and accounts is useful, but narrowing down precisely what “success” looks like is the best way of creating a meaningful health scoring system.

For example, you could select customer satisfaction as an important factor. Here you might use their NPS and CSAT responses alongside the number of times they have contacted support within a given time period. This can provide a helpful indication of whether customers are happy with your product or service.

2. Applying weighting

Now you have your datasets, you need to apply customer health score weighting. Which metrics are more valuable to your business, and which ones aren’t as helpful for determining account health?

As per the example above, while prioritising NPS, CSAT and Service Management metrics as key factors in the calculation of customer health, you might assign a lower weighting to the rate of customer engagement with user community forums.

The weighting system you’ve assigned can be scaled in any way that makes sense to you. You could choose a scale between 0 – 100, with scores from all your metrics assigned a plus or minus number on the scale.

Create segmentation to separate “healthy” from “unhealthy”

Once you’ve clarified what you’re measuring and how important each metric is, your combined score for each customer needs to be broken down into “healthy” and “unhealthy”.

For example, scores from 75 – 100 could be “healthy”, 50 – 75 could be “at risk” and 0 – 50 could be “unhealthy”.

Whatever labels you give these groupings, it is critical to do some analysis with historical data to verify that customer behaviours are in fact leading to the outcomes expected – ie. customers in the unhealthy category are churning more or spending less over time than those in the health category.

How to improve customer health scores

Once you’ve built out your customer health score system, the next step is to assign actions to take depending on how the health score for each customer is now and how it changes in the long-term.

First, you need to make your scoring system clear to your customer success managers and the wider business. It’s helpful for customer service staff to know which customers might need more care, so make sure your customer health scoring system is easy to understand and access for all your team members. You could also link your customer health score to your CRM to efficiently link all your data in one place.

Once the system is understood, it is time for action. Improvement actions could include extending further marketing outreach or implementing improvements that remove any blockers to product adoption or usage.

Your customer support will likely be a great help here to understand customer behaviors and resolve any issues. For example, if customers are frequently scoring low because they are often going to customer support with issues, there might be a product fix needed to help avoid this problem in future.

By taking the actions above, you will already likely have improved customer health across your accounts by making progress in areas that need work.

Further improving your customer health score may require taking a look at the entire customer journey, from onboarding to customer churn, to understand which of your measured metrics are the best indicator of success and customer retention.

Your customer health scoring system will also likely need updates over time. Your original assumptions about what metrics are useful or correlated might turn out to be an inaccurate prediction of customer churn, so you will need to keep a close eye on data trends to ensure it’s right. Additionally, your customer base is likely to grow over time, and new needs and behaviors will appear that need to be captured.

Using customer health scores as part of a wider CX program

Your customer health score benchmark and strategy for improvement is part of the ongoing process of creating great customer experience. Developing a CX program that takes customer health scoring into account alongside other factors is a good way to not only improve customer experience, but augment business outcomes.

Your CX strategy should encompass complementary account management activity, such as:

Discover Best Practices For Improving Your B2B Account Management