customer success metrics

Top 10 Customer Success Metrics to Track

Here is a list of top customer success metrics you must track. Get details into what they are and how to calculate them in this guide.

It is often assumed that the primary growth of a business depends on its ability to bring in new customers. Whilst bringing in new deals can certainly boost up the revenue numbers, it is equally important not to let the existing revenue dwindle.

To ensure that the existing customers remain with them, more and more companies are focussing on their customer success metrics. The correlation between the well-being of your customers and the prosperity of your business is evident. When your customers are content, flourishing, and actively advocating for your business, it paves the way for growth and success.

However, it’s not merely about ensuring customer satisfaction; you should delve deeper to grasp what aspects of your product they adore, which features provide the most value, and what they wish for. To understand this, businesses first need to specify which customer success metrics they are necessary for them to target and the value each of them brings to the table.

Let’s understand the various customer success metrics for SAAS businesses and why you should track them.

Why Should you Track Customer Success Metrics?

Customer success metrics aren’t just solely vital for your customer support team but also your product development, marketing, and sales teams. The better you comprehend your customers, the more effectively you can integrate this knowledge into every aspect of your organization, be it strategies, decisions, or priorities. This alignment will instill a customer-centric ethos throughout your workforce, resulting in a more robust product offering and a customer-focused team.

Furthermore, the impact of customer success metrics extends well beyond individual departments. When these metrics are integrated into every facet of your organization, from product development to marketing and sales, a holistic customer-centric culture emerges. This alignment ensures that customer needs and preferences are at the forefront of all decision-making processes. 

Top 10 Customer Success Metrics to Track

With the right tools and processes, your customer data can be a catalyst for remarkable growth. However, it all commences with accurate tracking of the essential metrics. Here’s a list:

1. Gross Revenue Retention (GRR)

Gross Revenue Retention (GRR) assesses your capacity to keep customers for a specific duration. What sets GRR apart from NRR is that it doesn’t consider the income generated through expansion, upselling, or cross-selling. GRR reflects how well you maintain your current customer base, indicating your success in customer retention.

How to calculate GRR:

gross revenue retention

2. Net Revenue Retention (NRR)

The net retention rate, a key SaaS metric used to gain insights into customer attrition, essentially quantifies the portion of an organization’s recurring revenue that originates from their current customer base. This metric can be presented as either a numerical value or a percentage.

How to calculate NRR:

  • NRR as an amount: Revenue total (ARR, MRR, or QRR) + Upsells – Losses
  • NRR as a percentage : Calculate NRR as an amount, and then divide that number by the (ARR, MRR or QRR) total

ARR (Annual Recurring Revenue), MRR (Monthly Recurring Revenue), and QRR (Quarterly Recurring Revenue

3. Customer Lifetime Value (CLTV)

Customer lifetime value (abbreviated as CLV or CLTV) is a measurement that represents the overall revenue a company can anticipate from an individual customer account over the course of their relationship with the business.

This metric takes into account the revenue attributed to a customer and matches it against the estimated duration of the customer’s association with the company. 

How to calculate CLTV:

4. Net Promoter Score (NPS)

The Net Promoter Score (NPS) is an indicator of customer contentment, allegiance, and endorsement. It is derived from a concise two-question survey that offers valuable insights into your company’s performance. Integrating NPS into your customer success strategy can enhance the quality of your customer interactions and foster the expansion of your business.

The NPS, along with the feedback received, serves as a tool for assessing your existing procedures and products, empowering you to make well-informed decisions regarding necessary adjustments and enhancements.

How to calculate NPS: 

For example, if 70% of respondents are Promoters, and 15% are Detractors:

NPS = 70% – 15% = 55

Your NPS in this case would be 55.

5. Churn Rate

Customer churn, also known as customer attrition, refers to the pace at which customers discontinue their association with a company within a defined timeframe. It stands as a pivotal metric for organizations to monitor, as it offers valuable indications of the company’s performance and its ability to retain its customer base over time.

How to calculate customer churn rate:

6. Customer Retention Rate 

The customer retention rate is a metric that gauges the proportion of a company’s ongoing customer base that stays committed to the business throughout a specified duration. This rate is typically represented as a percentage, reflecting the portion of existing customers who maintain their loyalty during that time window.

How to calculate customer retention rate:

7. Monthly Recurring Revenue (MRR) 

Monthly recurring revenue, often referred to as MRR, serves as a valuable metric for assessing the growth and spending patterns of your customer base since they began their association with your company. It quantifies the funds your customers allocate to your products and services on a monthly basis.

Tracking MRR over time enables you to gauge the effectiveness of your products in meeting your customers’ needs. This metric is especially pertinent for Software as a Service (SaaS) enterprises that operate under a subscription-based model.

How to calculate MRR:

For example, if you have three customers with the following monthly payments:

Customer A: $100

Customer B: $150

Customer C: $200

Your MRR for that specific month would be:

MRR = $100 + $150 + $200 = $450

8. Customer Satisfaction Score

A Customer Satisfaction Score (CSAT) is a metric that quantifies the level of satisfaction customers have with a product, service, or interaction with a company. It is typically measured by asking customers to rate their experience on a scale, often using a question like “How satisfied are you with our product/service?” 

The results, usually expressed as a percentage, provide valuable insights into customer contentment and help businesses identify areas for improvement or measure the success of specific initiatives aimed at enhancing customer satisfaction. CSAT scores are a vital tool for businesses to gauge the quality of their offerings and maintain a customer-centric approach.

How to calculate customer satisfaction score:

Add up all the responses and then divide by the total number of responses. This will give you the average satisfaction score.

9. Customer Acquisition Cost (CAC)

A company’s Customer Acquisition Cost (CAC) represents the complete expenses associated with sales and marketing efforts to acquire a new customer within a designated time frame.

These expenses encompass all costs related to marketing programs, staff salaries, commissions, bonuses, and operational overhead tied to the process of attracting potential leads and successfully converting them into paying customers.

How to calculate customer acquisition cost:

For example, if your total sales and marketing costs for a particular quarter were $50,000, and you acquired 500 new customers during that same quarter:

CAC = $50,000 / 500 = $100 per new customer

10. Customer Health Score

A Customer Health Score is a data-driven metric used by businesses to assess the overall well-being and satisfaction of their customers. It aggregates information from various customer interactions, such as product usage, support inquiries, feedback, and more, to provide a holistic view of customer engagement and sentiment.

The score helps companies proactively identify at-risk customers, address their needs, and foster long-term relationships. By monitoring customer health, businesses can enhance customer success, reduce churn, and drive loyalty, ultimately contributing to their bottom line.

How to calculate customer health score:

Calculating a customer health score involves assessing various factors related to a customer’s engagement, satisfaction, and overall relationship with your company. The specific components and weights can vary depending on your business and goals. For example, you might decide that product usage is more critical than customer feedback.

However, it is crucial to tailor your customer health score model to your unique business and customer base to ensure its accuracy and usefulness.

Tracking customer success metrics is vital for businesses as it allows them to gauge the effectiveness of their products or services in meeting customer needs and fostering loyalty. By monitoring these metrics, companies can identify areas for improvement, adapt their strategies, and enhance overall customer experience. 

This data-driven approach not only helps in retaining existing customers but also in attracting new ones, ultimately leading to long-term growth and profitability for the business. Incomes Nektar, the data-driven platform for all your customer success needs.

Increase Your GRR With Nektar

Nektar is an industry-first RevOps platform that automatically captures and integrates full-funnel activity and buyer data across your customer-facing teams. It is the data capture and intelligence layer built for customer success leaders. 

At Nektar, we help our customers reach their GRR goals. Most organizations only have visibility to 10% of their existing customers and their needs. With Nektar, you can know what’s happening with the remaining 90% of your customers.

Nektar allows you to elevate your customer success department into an efficient growth channel

Using Nektar, you can get the following:

1. Employ AI-powered time travel to fill in CRM data gaps, both past and present.

2. Identify fresh opportunities in your sales pipeline and promising leads through seller interactions and changes in champions.

3. Convert Slack or MS Teams into a proactive revenue risk mitigation system.

4. Address your CRM data issues before unleashing the full potential of generative AI for your Go-To-Market (GTM) procedures.

To know more about Nektar and how we can help you track your customer success metrics, get in touch with our team.


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