Customer-centricity lies at the core of B2B branding & advertising endeavors & as such it gets imperative for marketers to trace the determinants of customer success.
B2B marketing is a highly-interactive process wherein brands need to proactively interact with their preferred audience groups on diverse platforms. The value proposition of the products & services has to be shown by the marketers & simultaneously the customers have to find the products or services helpful to be adequate for their pain-points.
Constant improvement in the B2B products or services isn’t possible without giving ample weightage to the metrics to quantify customer success.
Customer success is the business methodology of ensuring that customers achieve the desired actions by using certain specific sets of products or services. It is relationship-focused client management that aligns client & vendor goals for fetching mutually beneficial outcomes.
Effective customer success results in decreased customer churn & enhanced up-selling opportunities. The goal of customer success is to make customers very successful in improving customer lifetime value (CLTV) for the company.
Defining customer success metrics can be a daunting task, however, understanding the vital metrics to define customer success can help the marketers understand campaign success & decipher recurring problems by working on data-driven insights.
Defining the metrics for customer success is also beneficial for tracking the customer lifetime value (CLV or often CLTV) which is the prediction of the net profit amassed from the entire future relationship with a customer. Ranging from a crude heuristic to the use of complex predictive analytics techniques, the prediction model can possess varying levels of sophistication & accuracy.
Let’s have a look at some of the key metrics that can be used by B2B brands to measure customer success:
1. Customer Health Score:
Customer Health Score assimilates multiple dimensions of customer data metrics & classifies them into a single representation of green, yellow or red. The metric by & large condenses all the information that a company possesses about a customer, from all probes, people amp; systems, past & current.
According to Kate Leggett, Vice President & Principal Analyst at Forrester, customer relationship management ensures that customers realize the economic value of their investments. Customer Relationships are actively managed by a reduction in customer churn, an increase in existing revenue & an increase in the total number of new sales.
B2B marketers need to have an excellent customer support system in place to ensure that customers are proactively offered assistance with problems & thus, can proactively strategize for the future.
The customer health score is a major determinant of customer success & businesses need to formulate a customer health score. They can also measure customers’ growth as the best sign of business success is growth.
Marketing endeavors such as improvement in customer retention rates help marketers assess the success of a customer.
2. Net Promoter Score (NPS):
Net Promoter Score is another important indicator of customer success for B2B brands. Businesses can analyze feedback based on the NPS, and then examine the customer experiences to see if they come across any abnormal results or outliers.
NPS simply introspects whether someone is likely to recommend their company to someone else. The sales representatives & their relationship with customers play a major role in assessing the Net Promoter Score.
NPS provides both qualitative & quantitative data about customers & asks participants to rate their experiences on a numeric scale. The participants are also asked to provide an explanation for their score.
NPS can be measured from a tool. The only question asked is, “On a scale of 1 to 10, how likely are you to recommend a product or service.” Also, adding a comments section allows participants to explain their scores.
3. Qualitative Customer Feedback:
Customer feedback is another important thing that marketers can measure. Businesses need to understand what their customers think of them & the services they render.
Tracking qualitative customer feedbacks, like survey or questionnaire responses allows marketers to track the sentiments of the customers for the company as a whole.
Customer feedback isn’t solely about the products but also about how clients feel about the company as a whole.
4. Customer Churn Rate:
Customer churn is a great metric to measure on a rep-to-rep basis. While calculating customer churn rate the marketers need to exclude the number of new customers acquired during a particular month from the existing total. These customers will be added to the existing customer total during the next assessment.
As the customers churned during the time period, the inclusion of the time period is important when measuring the churn rate.
Also, include the new customers who churned during the time period with the overall churn total. Since these customers churned during the assessment period, they should be included in measuring the churn rate.
5. The Recurring Revenue for the Month:
Monthly recurring revenue is defined as the income that a business can count on receiving every single month. It’s predictable revenue. Being a consistent number, this number can be used to track all the recurring revenue in monthly increments.
This metric is a byproduct of subscription business –a service billed & paid for on a monthly basis. MRR is amongst the most important metric for subscription business & for determining customer success.
6. Customer Lifetime Value:
Customer lifetime value (CLV) is amongst the most fundamental customer success metrics that businesses can use to measure their success. CLV compares customer revenue value to their predicted lifespan.
CLV can be calculated by multiplying average purchase value by the frequency rate for purchases.
7. Cost of Customer Retention:
When employing measures for ensuring customer success, brands need to ensure that they are cost-effective. Customer Retention Cost or CRC includes the total cost of the customer success program & compares it with the total amount of customers. Thus, brands can estimate how much money they are spending to retain their customers.
CRC helps businesses invest in customer success programs. Measuring CRC allows businesses to make smart business moves.
8. First Contact Resolution Rate:
The first contact resolution rate is calculated by dividing the number of service tickets closed after the first customer interaction with the total number of service cases.
According to HubSpot, 67% of churn can be avoided if the service inquiry is resolved during the first interaction. A help desk can provide reporting tools needed to calculate the first contact resolution rate, without manually crunching the numbers.
9. Customer Satisfaction Score:
CSAT is similar to NPS. CSAT asks employees to simply rate their experience with the company. Thus, businesses get an idea of how customers feel after an interaction with the success team.
This customer success metric is meant to analyze customers’ immediate reaction to individual experience & doesn’t consider the overall perception of your brand.
10. Renewal Rate:
This is amongst the most important customer success metrics for B2B SaaS business. The number of people who keep signing up & using the product is analyzed. A high renewal rate means that a particular product is successfully driving customer success.
A low renewal rate means that customer success with products is low. Thus, businesses can analyze how they can improve their marketing programs to architect seamless & long-term customer success by delighting the customers.
Renewal rate can be calculated by dividing the number of customers who renewed their subscription with the users who were up for renewal & multiplying the result by 100.
Wrapping Things Up
Building an enticing customer success platform requires marketers to measure B2B customer satisfaction – both qualitatively & quantitatively. Keeping an eye on your customer satisfaction indexes & competitively benchmarking them can help the marketers in making actual changes to handle their customers. Selecting a random group of people from businesses can help marketers to establish mechanisms to optimize the determinants of customer success.
Designing real-time surveys, tracking NPS & CSAT & real-time data monitoring helps marketers to optimize their customer success parameters after particular tractions.
Valasys Media provides hyper-tailored B2B services including lead generation, account-based marketing, lead nurturing, event promotion services, list building services & content syndication services to help you achieve business success with clearly defined marketing objectives.