What do you know about your customers’ health? I don’t mean if they’ve been to the doctor lately, though it’s always nice to ask how they’re doing. I’m talking about understanding your customers adoption of, and reliance on, your product. Healthy customers are enthusiastic users who value your company, have incorporated your product into their everyday workflows, and therefore have a low level of churn risk.
How this health is manifested in your metrics is different for every business, but you need to be able to recognize the signs of sickness so you can build a Customer Success strategy that keeps your customers happy, healthy, and coming back for more.
What does a healthy customer look like for you?
At ESG, helping our clients to answer this question is a foundational step in enabling them to build a predictable, scalable Customer Success organization. We’ll typically do a deep dive into your business, help gather and consolidate your data, and engineer reports and dashboards to empower you with this valuable insight.
If you’re already utilizing a dedicated CS platform, we build this right into that tool. If not, we construct an offline dashboard to ensure you’re getting the information you need. As part of our Customer Success Maturity Assessment or an individualized ESG Customer Success Plan, our team will analyze your customer base and help you build a health scorecard for each customer.
To learn more about these techniques, I reached out to ESG’s own Data Analytics expert, Justin Garlock, just as he completed one such program. He let us pick his brain about his recent experience building a customer health score dashboard and how better understanding their customers’ health guided one ESG client on their path to CS greatness.
ESG: Walk us through how you began creating this health score dashboard for a CS organization. Where did you start?
Justin Garlock (JG): “Step one is definitely understanding the business. You don’t want to create a report for the sake of creating a report. It’s not really going to tell you anything about your business or what a healthy customer truly looks like. A lot of the discussion revolves around ‘what defines a healthy customer for you?’ Once everyone has gotten their ideas out on the table, we’ll pinpoint the most important data points. On a recent client project, we selected our top four data points, which became the four pillars that we needed to measure to understand their customers’ health and output a health score based on the results of those categories. This can be challenging because some are clear and concise, simplified metrics. Others can be less clear-cut to calculate.”
ESG: Sometimes, at the start of a process like this, you think one thing is essential, but it turns out to be less critical or vice versa. Can you tell us a little more about how this particular health score dashboard evolved over the course of creating it?
JG: “That happens all the time. Really on both sides. From a client standpoint and from me. I’m working on something, and I’m like, ok, this is what the deliverable is, but then I’ll see some other data and think, oh, what about that? That would be really cool to show.”
ESG: It sounds like you were able to present data the company may not have been aware of, initially, and that testing the metrics out over time is also important.
JG: “It’s all still centered around those ideas of what a healthy customer is. It’s just breaking them down into more meticulous details and output in terms of the client’s analysis. These changes happen all the time. Then comes the fun part of actually testing it. I love to see where clients land in three to six months, and if those systems we established hold up or if they get adjusted based on what they are seeing. It’s not only the additional features that accompany the pillars of the health score. There’s also the shifting and trial and error as they learn, develop, and scale.”
ESG: What advice would you give to someone building their own customer health score formula?
JG: “You need to make sure you’re measuring the right things. In this latest project, for example, early on, the customer identified two user actions they believed were really important. But through our time with them, the team realized those features just weren’t telling enough of a story on their customers’ health. Once we showed them the data, we discovered two completely different behaviors that were actually more important.
Having an outside perspective like ESG can also really accelerate this process. Through our team’s understanding of the CS world, we often ask questions that you may not think to ask to get to the bottom of what a healthy customer really looks like. These conversations lead to the pillars of the health score. You have to ask those right questions because it is different for every business.”
ESG: How should someone narrow down the most helpful metrics to include in a customer health score?
JG: “It’s about always keeping that simple question in mind. Does this really mean the customer is healthy? I think that’s the question to ask all along the way as you’re doing this. Especially on the creation side. Even if you’re in a Customer Success tool on the dashboard design. It can be easy to get lost in. All of a sudden, you’re throwing all these pretty colors in and making it look awesome, but you lose the reasoning behind it. There’s nothing in the end result of this report that I didn’t question several times throughout as to why I was putting it into the dashboard. I think that holds true in that discovery phase of what a healthy customer is as well.”
ESG: You built this particular dashboard in Excel. Do you think it helps to have completed this project before the client implemented a Customer Success technology platform?
JG: “Thinking about everything that we learned about the business by doing it this way, had we had a CS tool, and were like – this is what we have, this is what we’re going to run with – we might not have asked the right questions along the way. Why are we doing this? We have the tool now, so it’s easy to just get it in, do the dashboards, and make everything pop up pretty. Versus, is this beneficial to an actual customer health output? You can definitely still get there without the manual work, you just have to be really thoughtful and keep asking those key questions.”
ESG: Would you say this kind of exercise is beneficial no matter what your level of Customer Success Maturity is?
JG: “Regardless of where a CS organization is or if they have budget for a CS tool, this exercise provides a lot of value. Going through this process, outlining it, and figuring out what you want to see in a compact format is super important. Then, it’s going to be a lot easier to take the lessons learned and apply them in your CS tool when you get to that point.”
ESG: Would you say it helped ESG’s client to have an outsider’s perspective in this process?
JG: “Definitely. I’ve seen that in several of our client engagements. If they are doing something ‘this way’ because it’s always been done ‘this way,’ it’s our job as ESG to ask why. Why are you doing it this way? Sometimes it holds up. Yes, this is a reasonable thing to track and measure against a health score because of its impact. But sometimes it doesn’t, and we’re there to help them figure out why.”