How I Built This: Customer Health Scores

How I Built This: Customer Health Scores

If you work in customer success you have heard of health scores. Customer health scores provide a standard scoring system by which you measure the performance of your customers. These scores help drive measurable outcomes with customers, help inform KPIs of your success org, and help your CSDs be more effective and efficient. Without these your client success organization is flying blind.

As I mentioned before, it is a long road in requesting, receiving, and organizing the customer data your teams needs to implement scoring and proactive triggers. Over the last year, we laid the groundwork with our leadership team to prioritize the integration of product data to form a cohesive view of the customer.

How did we know what data we needed?

Start with what you know

Your teams already know what make customers successful. Start there. Your client success teams are already likely using benchmarks and KPIs to measure effectiveness with customers. Below are a few steps you can take to help gather this information.

  • Ask your CSMs - Ask them what they use with their customers. What would they use to score customers? Ask them for a few examples of top and bottom performing customers
  • Ask your customers - Reach out and ask customers how they measure their performance. Do they have KPIs they report to their leadership? Are there metrics you're not considering? It's okay to show customers your scores, these don't need to be secret.
  • Customer Data - Do you have data already on customers? Start documenting the sources. If you can, quickly summarize the major data points.

At Bazaarvoice, we already had a framework for communicating customer performance in business reviews. It was only a matter of validating these and requesting the same data from product.

For example, Bazaarvoice customers collect user-generated content to share across their retail partners. We know that volume, coverage, rating, and rejection rate were the KPIs that would make up the scorecard measure.

Building an MVP

Now that we had a general idea of our health scores, it was time to build an MVP. Starting manually in spreadsheets is recommended. This is harder up front but allows you to validate your health scores against actual client data before configuring anything. Here's what we did: 

  • Ambassadors - We created a team of CSM ambassadors. These CSMs chose 5 customers each. They met with us bi-weekly to validate our scoring algorithm against their actual customers.
  • Score Table - List out all the health scores, weights, and definitions in one sheet.
  • Customer List - Apply these scores using health score definitions and weights in first sheet. Then actually score these customers using the framework.
  • Calculations - Use functions to build the scores. It takes manual work up front, but then it becomes very easy to tweak weights and calculations to assess how scores should be calculated

Iterate

We went through several cycles of updating score formulas, assessing with ambassadors, receiving feedback, and making changes. Then we decided to end the MVP phase once changes were becoming less frequent and any major objections or concerns were address.

A key here is to not wait for consensus. This may kill your project. Receive feedback from your ambassador team, work towards your goal of maximum clarity and validity, but don't let perfection and group consensus thwart your progress. The goal of the ambassador group is not approval, it is feedback.

Build

Once you have your working health scores the build portion is easy. You simply ensure the data is flowing where it needs to be and configure the scores based on your model. The only gotchas here worth mentioning are: 

  • Data - Is the data in the correct format that you expected?
  • Changes - If you have existing health scores, be sure to communicate changes across your organization. Get with leadership to discuss this communication
  • Iteration - I recommend launching and making quick iterations upon this first version. But limit major changes (adding, removing scores) to longer-term 'sprints'. But if your calculations just need adjusted, make them quickly.
  • Document - You will inevitably receive questions from the field. Be ready with documentation or training on how scores work and are calculated

There you have it. A short guide on creating and launching a health score MVP in your client success org.

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