Why is ‘Customer Success with Solution’ a KPI of Customer Success?

By Spencer Altman,
Head of Customer Success

 
 

The logic behind the metric ‘Customer Success with Solution’ is that the more success customers have with a product/service, the more likely they are to keep it, buy more of it and/or recommend it to others. Thus generating revenue for a service provider.

What is ‘Customer Success with Solution’?

We want to quantify how much value we deliver per client, across all clients and for each segment of clients.

We need a number.

Ideally, this number is measured in money. Money talks. Profit, revenue increases and cost savings. Period.

If your product/service directly impacts the profit (revenue and/or costs) of your customers, then try to measure it and make that your KPI here.

It makes selling your services so much simpler to argue profit figures that your services are directly responsible for.

Your services can come under fire for various reasons: Your customer is considering your competition. Budgets get tight. Your main supporter in the department/organization leaves the department/company. These are just a couple examples of situations where a customer will start looking for a number to justify staying with you.

‘What is the ROI of your product/service?’ is a question that, even if not directly posed by your customer, may not be too far in the background if and when the customer is considering your services.

If your services, however, do not directly impact the bottom line of your customers, then you need to look for alternatives. Try to keep these alternatives focused on being as close to revenue generating and/or cost saving as possible.

Or, another way of looking at it:

What is the business value that customers get from your solution?

Examples could be:

  • Time saved for process X
  • Increased lead generation
  • Increased employee satisfaction
  • Increased customer satisfaction of the customers of your customer 

These types of metrics may be easier for your customers to provide to you, as your customers may already be measuring them in their department or part of the company.

That is fine. Just remember that when it comes time to renew a contract or tighten budgets, in the end, ROI will be increasingly likely to become a criterion. Thus, try to make sure you take a critical eye to using the above metrics in order to make sure that, in the eyes of your customer, you are truly delivering value for them. And not just delivering a service that is ‘nice’ or ‘nice to use’.

Against tough competition or tight budgets, you might have a hard time convincing customers to stay with you with ‘nice’ and ‘nice to use.’

Is this KPI even realistic to measure?

If you can measure this metric for all your customers, then all the better.

For many SaaS companies, measuring this KPI may just be entirely unrealistic. But that does not mean the metric is worthless.

Having the KPI itself, even if it cannot be measured for all customers, can still deliver a lot of value.

For one, if you truly know the value that your customers get (or perceive that they get) from your product – even if the exact quantity cannot be measured – then you can use this information to feed directly into the messaging and targeting of your marketing and sales teams. Knowing the language of the customer and what triggers them to buy your solution helps your sales and marketing teams in their messaging.

A second reason that this metric is valuable is that even if it cannot be measured for 100% of your customers, you can still try to measure it for a subset of your customers and use these as flagship success stories. These success stories then help to sell your solution.

 
 
 

Spencer Altman is Webtrekk's Head of Business Consulting. Since joining Webtrekk in 2009, he has been working with companies around the world to help them get the most out of their digital business. His journey in digital analytics began in 2006 as Business / KPI Analyst for weeworld.com, a social network based in the UK. Previously, he spent six years at Accenture in Business Process Consulting in Telecommunications. Spencer can be reached at spencer.altman@webtrekk.com and followed on Twitter @spenceraltman.