Customer health scores are often associated with proactive Customer Success.
The idea being that monitoring a composite set of parameters, that serves as a proxy to customer health, will identify when customers are at risk for ending their product subscription, or churning.
Too often however, companies create customer health scores based on lagging indicators.
While proactive Customer Success does occur if the set of parameters being monitored are proactive indicators, the opposite is true if the signals are lagging.
Analogous to a doctor diagnosing someone that is already ill, the best the doctor can do for the patient is use the symptoms to assess the illness and then prescribe a get-well plan.
The patient is still sick however.
At that point in time there is nothing the doctor can do to prevent the patient from being sick in the first place.
Similarly, when Customer Success’ work effort is based on parameters that already denote problems and it spends its time focused on resolving them, it is still operating reactively.
Reactive effort to get customers “healthy” and back on track invariably requires more effort, is less enjoyable for employees and affects the customer’s experience.
Proactive customer success occurs when customers are assisted well before they go off-track and become unhealthy.
For this, Customer Success needs to monitor data that consists of leading indicators of customer health.
Preventing the “illness” from ever happening is the objective.
Not only because it requires significantly less effort to assist customers, it is also much more enjoyable for the customer and Customer Success Managers (CSM).
How then does Customer Success determine which parameters to note when observing healthy customers before they become unhealthy?
Build a model for what healthy typically looks like so Customer Success can recognize when customers are not following the expected patterns.
Similar to the stages of human development that doctors use to assess whether a person is tracking to expected health signs for their age and gender, Customer Success can use the customer journey to track how customers are progressing with the use of the product.
The successful customer journey is the healthy path that customers should be following.
Anything that denotes otherwise is an indicator that Customer Success should work with the customer to understand the differences.
If it turns out that there is no cause for concern, then the CSM has spent some time with the customer and acquired more information about them (always a good thing).
If something amiss is identified, then the CSM successfully got to the customer early on before any major problems occurred.
Customer health scores based on lagging indicators to health will still produce reactive Customer Success.
The objective of Customer Success is to be as proactive as possible as it is more effective in reducing churn, increasing customer and employee satisfaction, and more efficient to run.
The company’s customer journey serves as the success path to product adoption and retention and therefore serves as the model to expected customer health.
Observe how customers are tracking on their journey and intervene before they are unhealthy and Customer Success will truly be operating proactively.