The boss looked at me through the webcam. I could feel his finger hovering over the “end call” button.
“Actually…” I hesitated. “I’m writing a blog on Customer Success Management. It’s early days but I wanted to actually make it for people running start ups.”
“Yep. I was just wondering what were your top concerns?”
“Hmm.” He looked out of the window behind the screen, his eyes glazing over. “Customers that take up too much time. We have to know how to say ‘no’ to them.”
“Mm-hmm.” I was tapping away while keeping my ears peeled.
“How to identify and take of customers that take up too much of our resources.”
“Oh yeah, that’s important.”
“There’s one more.”
I waited, fingers hovering millimeters above the keyboard.
“How do I actually go about measuring reactive customer success vs. proactive customer success?”
The question hung suspended between our virtual faces.
“Customer Success is expensive to hire. I want to know that I’m getting as much leverage from it as I can.”
t’s been a couple months since that first one on one with the founder. He gave me some good topics to write about and I think the last one he mentioned is the one I’ll start with.
Leverage is that sought after quality in all businesses. Getting out more than you put in is literally the definition of profit. In this sense though, it’s a human resource profit, not money. If there is any type of business where it’s particularly important, it’s a start-up.
In thinking about this pain point, the way I understand what the founder was saying was that he wanted a dashboard that would highlight particular metrics that were deemed to be proactive and reactive. The point of this dashboard and these metrics would be that they would have a causal relationship with all the good things you want to see in SaaS business, like renewals, referrals, growing MRR and CLTV.
Here are 10 metrics, five for reactive and five for proactive that a CSM should focus on, based mainly on my experience so far.
- Ratio of inbound to outbound contact: in general, you want to be contacting the customer more than they are contacting you. Obviously in the early days, they might be reaching out a bit more if they are still learning the SaaS, but as their usage matures, you want to be doing more of the active outreach. If this is skewed towards the customer doing a lot of outreach in the long run, it could mean that the CS is not being proactive enough.
- No. of external follow ups: if your SaaS is the type to produce some sort of deliverable that the customer relies on to make decisions, you don’t want to be fielding too many questions from customers asking where that deliverable is. Assuming you’ve set their expectations clearly, they shouldn’t have to follow up with you too much. If they are, it could mean that you’re internal processes aren’t robust enough yet, or that the CSM is letting the customer slip through the cracks.
- No. of external escalations: this is a level up from the previous point and is the equivalent to the dreaded, “I want to speak to your manager” conversation. They’re not happy with you as a CSM and want to speak to someone who cares.
- Number of active users: I’ve yet to come across a SaaS whose business model operates by focusing on one user per company. Even if you don’t charge per user, having more people in a company sharing information that comes out of your platform means that it’s stickier and being relied upon, potentially to make critical decisions. Getting more users in a company should be a key aspect of any CSM’s job.
- Number of champions: if there is one just champion, I’m busting my ass trying to find another champion within the organisation. I don’t know how many times I’ve had to peddle hard to save an account because the champion left. While it might be a bit unclear what constitutes a champion, tracking this information in the CRM should be easy with tags. Having a champion in the organisation is critical for ongoing customer health.
- Average time/interactions to upsell customer: imagine if there was a way for the boss to open up the Customer Success software platform the company’s running on, pull up individual CSMs and see the average time it takes for them to take a new customer from one stage to the next. As long as it didn’t impact on the likelihood of the customer churning, a CSM that’s able to help customers realise more value is an asset to any organisation.
- Average rate of quarterly account growth: similarly to the last point, but expanded across the entire account. Seeing stable, dependable growth triggered by the CSM means that the business can more reliably forecast and confidently show investors how value is being created in the organisation.
- Average Viral Factor/quotient: do you have a way of tracking which customers are referring the most new customers to you? Unless virality is built into the SaaS, this is stimulated by good CSMs actively asking customers if they know any non-competing colleagues who might also benefit from using the same SaaS. Systemise this and you’ve turned word of mouth into a growth engine.
- Proportion of value add conversations vs tech support: as much as we want to get away from it, it’s impossible to completely not take any tech support type calls as a CSM. We know the platform best or we see some of the weirder edge cases that might stump tech support trained on standard SOPs and we get called upon to help. That’s fine. However, the greater proportion of our time should still be spent on proactive, value-building conversations.
- SaaS Behavioural metrics post CS conversations: to be honest, I’m not sure how this would be tracked, but I think it’s important to monitor how users use a SaaS differently after CSMs speak to them about it. It could be a shorter workflow or new feature. Whatever the case, if you aren’t measuring this, you aren’t tracking the results of proactive conversations aimed at building value with the customer.
What do you think? Are these the best metrics to track for proactive vs reactive customer success? I’d love to know your thoughts.