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5 SaaS Leaders Share their Most Important Customer Success Metrics

Updated: Mar 4, 2020

5 SaaS Leaders Share their Most Important CS Metrics
Photo by Annie Spratt

Customer Success and the way it’s measured is constantly evolving to keep up with business objectives and changes in customer expectations. From NPS to retention metrics, account growth to value realization, there’s no shortage of ways to quantify Customer Success.

This is the first interview in our 3-part interview series where we take a closer look at how today’s CS leaders are currently thinking about measuring Customer Success and their outlook for the future of CS metrics in the years to come.

We spoke with five of the brightest minds in Customer Success and asked them to share how they’re currently measuring CS at their organizations and how these metrics align to their larger organization’s goals and strategies. What they had to say was incredibly insightful and valuable for CS leaders everywhere.

Dione Hedgpeth, Chief Customer Officer at Sumo Logic:

At Sumo Logic, we have a number of metrics that we focus on and we group them into seven major focus areas. They are: renewals (both retention and gross retention), adoption, (green/red health score based on a list of attributes with defined criteria), advocacy (including NPS and an economic buyer sentiment score), expertise (% of the customer base that has at least one certified user), support (CSAT survey), customer experience map metrics (% of Customer Success Plans and Business Value Reviews we have conducted), and bookings (Premium Support and Professional Service bookings).

All of these metrics align to the initiatives we are running, and we know if our initiatives are working if we see improvement in these Customer Success key performance indicators (KPIs). My whole leadership team has some or all of their MBOs (Management By Objective) based on renewals. Not all our leaders are accountable to all of the KPIs, but this is the roll up of what we will be measuring in 2020.

Jesse Goldman, VP of Customer Success at Sprout Social:

There are 3 key ways we measure Customer Success at Sprout Social. First, we focus on team engagement. Customers can tell when the people they work with are happy, confident and excited about what they are doing, and that can do wonders for their experience working with us. We are focused on coaching, learning, and development to create a culture of excellence, and make Sprout and our team a destination for career growth. We make diversity, equity, and inclusion a priority and believe we are all better when exposed to diverse perspectives and experiences, and when we each are able to bring our true selves to work every day. We focus on building strong cross-functional partnerships, and championing the customer-first mindset.

The second way we measure Customer Success is through our engagement with our customers. Our goal is to make our customers wildly successful, with Sprout and their social strategies in general. We are focused on exceeding expectations to make them heroes in their organizations and help them grow in their careers. To do this we prioritize connecting with our customers on calls, in-person meetings, and conducting business reviews to understand their goals, reinforce our commitment to their success, and help them see the full potential our platform offers to them.

And lastly, we measure Customer Success by evaluating our customers’ engagement with us. Every customer is a VIP and we want to ensure they feel that way. We are focused on ensuring that each and every one of our customers is equipped to achieve their goals (and more) with Sprout. We have the privilege of working with over 20,000 customers and we aim to ensure that each feels equipped for success. A key part of our strategy centers on consumption of the content, learning programs, and group programs we offer, as well as the impact these deliver for our customers.

By measuring these three areas, we’ve aligned our Customer Success focus to Sprout Social’s overall business objectives – notably net dollar retention. These KPIs also align with our Sprout values and our mission to enable meaningful connections with the Sprout brand. We know that happy, successful customers stay with us longer and grow with us and as an organization, we are focused on long term, trusted partnerships that enable new levels of value.

Kevin Scheper, VP of Customer Success at Drift:

At Drift, we focus on the ultimate goals of a fast-growing SaaS company, which are net dollar retention and gross dollar retention. These are great as overall business KPIs and for variable compensation metrics, but they are lagging indicators that aren't useful as day-to-day indicators of whether a company or CS team is doing the right things and having the expected impact. We also track NPS, and largely use it to help us identify ways to improve the product and our interactions with customers.

Where we've found a lot of success is to look at elements of customer health, walked back from expected customer outcomes. In our case, we are trying to drive pipeline and revenue for our customers. Walking that up the sales funnel, we need to make sure that customers are maximizing conversations with their site visitors and then attributing those activities back to the Drift platform. CSMs can monitor this setup and site engagement in real-time and run an established set of plays against target accounts with opportunities for improvement. We set quarterly goals to increase the health of the customer base according to those elements.

Holly Tiessen, SVP of Customer Value at Axonify:

At Axonify, we think of our metrics being in two different categories – lagging indicators, which are top level SaaS metrics, and leading indicators, which are our growth KPIs.

For lagging indicators, we focus on gross retention and net retention, and for each of these ‘best in class’ really depends on the solution space that you’re in. At Axonify, we are working towards 90% gross retention and 110% net retention. For leading indicators, we focus on relationships (with contacts, connections, champions, and advocates), business alignment (having and working on a plan that’s aligned to delivering on the customer’s business goals and objectives), software usage metrics, and business value.

These ways of measurement are most important because they are the indicators of a healthy customer that will typically renew and grow their account with us.

Joceyln Brown, SVP Customers and Revenue at Allocadia:

At the end of the day, the two metrics that I measure my team on at Allocadia are gross renewal rate and net dollar retention. Everything else that we measure and all of the other goals that we set are in service of those two metrics. While I have instrumented a lot about our customer journey and we look at tons of adoption and engagement metrics, these are the two that count.

In a subscription business our purpose is to keep customers and grow them. That’s the best thing we can do to support our organization’s goals.

These five industry experts are leading the pack when it comes to defining what Customer Success measurement looks like in this new decade, but we also want to hear from you. How are you and your company currently measuring Customer Success? What are the metrics you care most about? Join the discussion on LinkedIn now!

Check out the other interviews in this 3-part series:

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