What is the Key Indicator of Customer Success, "Health Score"?

Table of Contents

1. What is a health score in customer success?
2. Benefits of Introducing Health Scores in Customer Success
3. How to Successfully Implement Customer Success Activities for Onboarding
3-1. Achieving Successful Onboarding
3-2. Definition of Onboarding Success
3-3. Setting KGI (Key Goal Indicator) and KPI (Key Performance Indicator)
4. Summary

1. What is a health score in customer success?

The health score is a numerical value that indicates whether customers continue to use products or services. It is an important indicator that measures the "health status" of customers, and shows the health status of customers in using their own services. If they are healthy, it means that they will continue to use the services for a longer period of time.
By quantifying and evaluating whether customers continue to use their products or services, a high score indicates that continued use is expected, while a low score indicates a high probability of cancellation (churn). By utilizing this score, appropriate customer success can be achieved. It is also an important indicator that leads to improved customer satisfaction and retention, and is used to maximize the customer's lifetime value (LTV).

What is Customer Success LTV? Learn more about how to maximize it here
・What is LTV? What is the relationship with Customer Success?
・How to increase LTV

2. Benefits of Introducing Health Scores in Customer Success

The health score is a major indicator for determining what kind of support should be provided to customers. It is difficult to provide the same level of support to all customers when resources are limited. By implementing a health score, it becomes clear how often and to what extent intervention should be made for each customer. By segmenting customers based on their health score and approaching each segment accordingly, customer success activities can be carried out more effectively and efficiently. The benefits are as follows:

●Improves Churn Rate: By monitoring health score indicators, we can detect potential customer dissatisfaction early on. By taking appropriate measures before cancellation, we can prevent customer churn.

●Can promote upselling and cross-selling: Can understand the timing of upselling and cross-selling: Customers with high health scores are in a situation where they are more likely to accept additional proposals. Can promote the success of upselling and cross-selling.

●The ability to choose not to provide excessive support: By using the health score, it is not only possible to narrow down the customers who should be given top priority for support, but also to make the decision to simply not provide support and improve productivity.

The churn rate (or cancellation rate) is an indicator that shows the percentage of customers who cancel within a certain period of time. In particular, in the SaaS business, it is important to keep customers using the service continuously, and a low churn rate can lead to acquiring new customers while maintaining existing ones, resulting in stable profits.
By implementing a health score, it is possible to easily understand the situation of customers and potentially improve the churn rate (or cancellation rate).

Improving Customer Success Role Chain Rate

The procedure for creating a health score is as follows.

1. Define Health Status: Determines the client's healthy state. Set specific indicators such as "login frequency (number of people)", "usage time", and "number of licenses".

2. Define Indicators for Evaluation: Define the indicators used to calculate the health score. Consider factors such as "customer touchpoints" and "satisfaction". NPS® is also available.
Note: NPS® (Net Promoter Score) is an indicator used to measure customer loyalty (trust and attachment to products or services). In customer surveys, responses are obtained on a scale of 0-10 from the question "How likely are you to recommend our products or services to a friend?" NPS® is different from customer satisfaction and is being introduced as a management indicator due to its strong correlation with company revenue.

3. Determine the Health Score Calculation Method: Decide on the method for calculating the health score based on indicators.
The calculation method for the health score may vary depending on the company or service, but here are some examples.
Calculation based on login frequency: Customers who have not logged in for more than 2 weeks: 0 points, customers who have logged in at least once in a week: 5 points, customers who log in once every 2 days: 10 points, customers who log in every day: 20 points
Calculation based on member invitations: If no members have been invited: 0 points, if members have been invited: 10 points
Calculation based on message sending frequency: Customers who have not sent any messages: 0 points, customers who have sent messages 5 times: 10 points, customers who have sent messages more than 10 times: 30 points
These examples are some of the elements used to measure the health status of customers. When implementing a health score, it is important to select indicators that are suitable for your company's business model and customer characteristics, and to choose an appropriate calculation method.

4. Determine Thresholds and Actions to Take: Set a threshold for the score and consider specific actions based on it.

5. Repeating Operations and Improvements: Regularly evaluate scores and implement improvement measures.

By setting the health score appropriately and providing appropriate support to customers, it is possible to clearly define an action plan for each customer and reduce churn, as well as perform upselling and cross-selling.

・High health score customers are expected to continue using our services, so it is important to provide special support, such as sharing successful case studies.

・On the other hand, customers with low health scores require urgent action, such as setting up cancellation prevention measures, as they have a high risk of cancellation.

2. How to Successfully Implement Customer Success Activities for Onboarding

Onboarding and health score are closely related in customer success activities.

●Onboarding:
In customer success, onboarding refers to the activities that new customers go through to understand the service and get the maximum value from it.

●Relationship between Onboarding and Health Score:
The Health Score is an indicator that quantifies the customer's health status. It evaluates the customer's activities and usage, and measures their success experiences.
In the onboarding process, the customer's Health Score improves by smoothly introducing the service and understanding the basic operation methods.
Customers with a high Health Score are more likely to have a successful onboarding, while those with a low Health Score indicate room for improvement.

●Utilizing Health Scores:
We utilize health scores to understand the health status of our customers and provide improvement measures.
We provide appropriate support to customers with low health scores, improving customer satisfaction.
Through the onboarding process, we improve health scores and maximize customer success experiences.

As such, health score and onboarding are important elements that work closely together towards customer success.

3-1. Achieving Successful Onboarding

We have summarized the key points to share with customers when defining the success of "onboarding" that fits our own products and services.

3-2. Definition of Onboarding Success

The success of onboarding refers to the state in which customers can effectively use services and products to obtain maximum value. Consider the following points to define the success of onboarding.

・Achieving Objectives: Whether the customer can achieve their main objectives for using the service (e.g. task automation, efficiency, information sharing).
・Smooth Implementation: Whether the customer can smoothly implement the service.
・Initial Setup Completed: Whether the customer has completed basic setup and is able to use the service.
・Customer Satisfaction: Whether the customer is satisfied with the onboarding process.

3-3. Setting KGI (Key Goal Indicator) and KPI (Key Performance Indicator)

KGI (Key Goal Indicator) is a target indicator used to measure the success of onboarding. For example, specific goals such as "80% of new customers complete basic settings after their first login" are set. KPI (Key Performance Indicator) is a specific numerical indicator measured to achieve KGI.
Below are some examples of KPIs related to onboarding.

・Onboarding Completion Rate: The percentage of customers who have completed the basic settings among customers who have just introduced the service.
・Active Users: The number of active customers who use the service regularly.
・Health Score: An indicator that evaluates the health status of customers. It is calculated by considering factors such as login frequency, feature usage frequency, and number of inquiries.
・NPS (Net Promoter Score): A metric that quantifies how likely customers are to recommend the service to others.
・CSAT (Customer Satisfaction Score): An indicator that evaluates how satisfied customers are with the onboarding process.

Let's regularly measure these KPIs and use them to improve onboarding.

What is Customer Journey? Steps for Creation and Key Points for Operation "2. Steps for Creating Customer Journey"
・Set items to be handed over from sales
・Focus on early success
・Implement and improve. Regularly communicate with customers.

4. Summary

Many BtoB companies (especially SaaS companies) have a high priority for customer success. The tasks of the customer success department are very diverse, so efficient task execution, including the use of health scores, is required. Human Science's services can implement measures that lead to improved efficiency of the customer success department and CX (customer experience).

Service Introduction

To efficiently share information on knowledge for customer success or to improve customer satisfaction, it is important to maintain documentation. It is also necessary to secure resources for this purpose. However, creating manuals and developing training content to improve customer satisfaction requires a large number of personnel and time, making it a high priority and a heavy workload task.

At Human Science, there are many services available for customers in the Customer Success department. In particular, we believe that the quality of the content provided by the Customer Success department is the key to success. Therefore, it is necessary to improve and create manuals, enhance FAQs, and create training content. All of these require costs if done in-house. Additionally, the quality must be easy to understand. At Human Science, we have a proven track record of creating easy-to-understand manuals and e-learning content. We offer the following services:

・Improvement of manual and training text quality
We propose the most suitable instruction manuals, technical documents, help, and FAQs for your environment. We provide consulting services from evaluating current manuals to creating a multilingual support system and building and operating a CMS. We can also handle the production of video manuals.

・Support for creating educational content and introducing LMS (Learning Management System)
Just like manuals, we will propose the most suitable educational content for your environment. Starting with evaluating your current content, we can also optimize LMS and support multiple languages.

・Chatbot Implementation and Construction Support
Many companies are adopting chatbots to streamline their customer support processes. We will propose the most suitable chatbot for your environment. We offer one-stop support from chatbot system implementation to content creation.

Project Achievements

The following are achievements for the Customer Success Department.

WingArc1st Inc.: Consulting and content creation services for the Customer Success department

We also offer services that can handle the creation of easy-to-understand "manuals" and "video manuals", as well as e-learning content, which are necessary for customer success, all in one stop. Please take advantage of them.