When you’re driving a car, there are many things to keep an eye on: your surroundings, speed, fuel level, engine temperature, and headlights—not to mention the warning lights that flag issues with your car’s health.
If you run an online business, you can think of your customer success metrics as the indicators on your car’s dashboard. Metrics like customer health score, Net Promoter Score, churn rate, and recurring revenue are signals that measure customer satisfaction. Just like the tire pressure light or fuel gauge, these metrics help you track the well-being of your business. By keeping an eye on them, you can address issues as they arise and keep your customers happy.
What are customer success metrics?
Customer success metrics are a set of measurements that quantify the health of your customer relationships and how well you’re meeting customer needs. The customer success metrics you choose to track will depend on your business type and business goals.
For example, a subscription-based company hoping to increase customer retention may measure renewal rates, while a clothing brand focused on customer loyalty might track Net Promoter Score (NPS) and customer lifetime value.
Key customer success metrics to measure
- Customer satisfaction score (CSAT)
- Customer effort score (CES)
- Net Promoter Score (NPS)
- Customer churn rate
- Customer lifetime value (CLV)
- Customer retention cost (CRC)
- Renewal rate
- Monthly recurring revenue (MRR)
- Ticket reopens
- Employee satisfaction score (ESAT)
Here are 10 primary metrics you may want to include in your customer success metrics dashboard:
1. Customer satisfaction score (CSAT)
A customer satisfaction score (CSAT), expressed as a percentage, measures customer satisfaction with a product, service, or customer interaction. The first step in obtaining your customer satisfaction score requires asking customers to rate their satisfaction on a scale of 1 to 10, where 1 represents the lowest satisfaction and 10 represents the highest. You can also use a 1–5 scale. Then, you can calculate customer satisfaction scores in two ways.
You can treat only the highest ratings as positive and calculate your CSAT accordingly. This tells you what proportion of your customers are happy with your business. There’s no hard-and-fast rule for what counts as positive. Some businesses consider only the top two scores as satisfied customers (e.g., 9 and 10 on a 1–10 scale, or 4 and 5 on a 1–5 scale), while others accept anything from 6 to 10. Here’s the formula:
CSAT = (Number of positive responses / Total number of responses) × 100
Or, you can ask customers to rate their satisfaction, then simply divide the sum of their scores by the sum of the maximum possible scores, and multiply the result by 100. This reflects your customers’ average sentiment. Here’s the formula:
CSAT = (Sum of all scores / Sum of the maximum possible scores) × 100
Generally, a CSAT score above 80% is considered excellent, while scores between 60% to 80% are good, and anything below 60% may mean you have too many unhappy customers.
2. Customer effort score (CES)
Customer effort score (CES) quantifies how much effort a customer exerts during an interaction. It’s another metric measured through a single-question survey after an interaction.
However, instead of rating the experience on a scale of good to bad (like CSAT), CES focuses on the ease of the experience, asking a customer, “How easy was it to resolve your issue with us?” with 1 being very difficult, and 10 being very easy. In this 1–10 scale, scores of 6 and above indicate positive responses.
To calculate a CES score as a percentage, use this formula:
CES = (Number of positive responses / Number of survey responses) × 100
3. Net Promoter Score (NPS)
While CSAT and CES measure customer satisfaction with a specific interaction, Net Promoter Score (NPS) gauges overall customer loyalty and happiness with your company. NPS is based on a single question asking how likely customers are to recommend your company to others, on a scale of 1 to 10.
“Rate your experience” and “would you recommend us” capture different sentiments: “Rate your experience” measures satisfaction with a specific instance (how well that moment went), while “would you recommend” measures overall loyalty and trust in your brand (how likely they are to endorse it in the future).
Respondents who answer 9 or 10 are considered “promoters,” 7 or 8 are “passives,” and 6 or below are “detractors.” The formula for NPS is:
NPS = % Promoters (9–10) − % Detractors (0–6)
4. Customer churn rate
Customer churn rate measures how many customers your company loses over a given period. To calculate churn rate, count the total number of existing customers at the start of a given period and at the end of that period. If the number stays roughly the same, your customer retention rate is strong. If it increases, you’re seeing customer growth. If it decreases you’re experiencing customer churn.
To calculate your churn rate, use this formula:
Customer churn rate = (Number of customers lost during period / Number of customers at start of period) × 100
Monitoring churned customers can help you understand when customer satisfaction is strong or declining. A high customer churn rate could be for reasons out of your control—like changes in the economy—or it could be a direct result of low customer satisfaction due to things like poor customer service or low product quality.
If your churn rate is increasing, look back at your data to understand when you started to lose customers and determine if this timeline aligns with changes in your business. For example, if your churn rate spiked in February, the same month you switched to new customer service software, you might dig into negative effects the change could have had on the customer experience.
5. Customer lifetime value (CLV)
Customer lifetime value is one of the most fundamental customer success metrics, since it measures the total revenue you can expect to generate from a customer throughout their relationship with your business, highlighting the long-term potential of keeping them engaged. CLV can tell you:
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If you’re retaining customers. A high CLV means you’re able to maintain long-term customer relationships, translating to high customer retention over time.
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Which customers are the highest value. Analyzing your CLV can help you identify your most profitable segments, showing you which customers you may want to prioritize.
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The quality of your customer service. A higher CLV can indicate that your customer service is effective—customers who feel seen and cared for are more likely to stick around.
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If your marketing campaigns are working. Your CLV can help determine if your marketing strategies are targeting the right customers and encouraging long-term engagement.
To calculate customer lifetime value, follow this formula:
Customer lifetime value = Customer value × Average customer lifespan
Customer value is the average revenue generated per customer during a specific period. It combines average purchase frequency and average transaction value.
Average customer lifespan is the length of time your relationship with a customer typically lasts before they become inactive and stop making purchases permanently.
6. Customer retention cost (CRC)
If you run an ecommerce store, you know finding new customers can be tough. This makes loyal customers who make repeat purchases highly valuable. Customer retention cost (CRC) measures how much you spend to keep these existing customers. By comparing this metric to customer acquisition cost, you can see how much more it costs to attract new customers compared to retaining existing ones—and efficiently allocate resources toward retention strategies.
To calculate customer retention cost, add up all expenses related to retaining customers—like salaries of employees in customer success, engagement, and training roles, the cost of marketing campaigns targeted toward existing customers, and customer relationship management (CRM) software subscriptions—then divide by the total number of customers you have at a given time. Here’s the formula:
CRC = Total cost of customer retention / Total amount of customers
7. Renewal rate
If you run a subscription-based business, your renewal rate is a crucial metric for understanding customer experience. It measures the percentage of active users or active customers who renew their subscription in a given timeframe. Renewal rate is a straightforward calculation:
Renewal rate = Total renewals in a given timeframe / Possible renewals in that same timeframe
For example, if 100 customers are up for renewal in a month, and 90 choose to continue their subscription, you have a 90% renewal rate that month.
While this metric is useful for businesses with recurring services, like curated clothing boxes or meal prep subscriptions, it’s less relevant for ecommerce stores or businesses offering one-time products or professional services.
8. Monthly recurring revenue (MRR)
Monthly recurring revenue (MRR) measures the predictable revenue your company can expect each month from its regular customer base. It’s expressed either as a total or as an average revenue per user.
This metric is especially important for subscription-based businesses and any company with a recurring customer base, including software-as-a-service businesses (i.e., SaaS companies), and companies with customer loyalty programs or membership models.
To calculate monthly recurring revenue, simply add up the total revenue generated by subscribers or recurring customers in a given month.
9. Ticket reopens
Measuring customer service ticket reopens helps you assess the effectiveness of your customer support resolutions, which can shed light on service failures and recurring customer issues. This metric is simple to calculate—count the number of tickets, or customer support inquiries, that were closed and then reopened.
10. Employee satisfaction score (ESAT)
An employee satisfaction score (ESAT) measures your employees’ overall satisfaction with your company by asking, “How satisfied are you with the company you work for?” on a 1-5 or 1-10 scale. After gathering responses, you can calculate your ESAT with this formula:
ESAT = Total number of satisfied responses (4–5 out of 5 or 6–10 out of 10) / Total number of responses × 100
Though this is not a direct customer success metric, monitoring your workforce’s well-being can provide a more holistic understanding of your company’s customer experience—satisfied employees often lead to better customer service.
Customer success metrics FAQ
What metrics would you use to measure customer success?
Customer success metrics include qualitative measurements like customer satisfaction score and Net Promoter Score, and quantitative measures like monthly recurring revenue and ticket reopens. These metrics can help you improve customer experiences and target your customer success efforts.
What is a customer success scorecard?
Tracking customer success metrics for a customer success scorecard—or customer success KPI dashboard—allows your customer success team to monitor key indicators in one place. It typically includes data like first contact resolution rate, customer satisfaction score, average purchase value, Net Promoter Score (NPS), and more, depending on the nature of your company.
Why is customer success so important?
Customer success is essential because it minimizes customer churn and helps develop a loyal customer base. Tracking customer success metrics can help your customer support team identify issues and improve overall customer satisfaction.
