5 hidden metrics that market leaders use to drive success

[email protected] (415) 990-5797©2015 Gainsight. All Rights Reserved. July 16, 2015

5 Hidden Metrics that Drive Customer Success

©2015 Gainsight. All Rights Reserved.


July 16, 2015

[email protected] (415) 990-5797©2015 Gainsight. All Rights Reserved.

Housekeeping

• Q&A panel on your right • Recording for colleagues who can’t

make it• All attendees will receive slides• Twitter hashtag #customersuccess


Presenter

Lincoln MurphyCustomer Success Evangelist

Gainsight@lincolnmurphy


What Is Customer Success?

Customer Success is when your customers achieve their Desired Outcome through their interactions with your company.


Customer Success Management

1. Define what success means to your customer

2. Determine if the customer is achieving success

3. Drive internally and externally toward success

4. Demonstrate success back to the customer


David SkokMatrix Partners

http://www.forentrepreneurs.com/why-churn-is-critical-in-saas/

Customer Success Drives

First-order Growth


CSM Drives Second-order Growth

Source: http://www.saastr.com/its-not-just-cltv-its-your-trgcltv-that-matters-total-all-in-revenue-generated-by-your-customer/


CSM Drives Third-order Value

0x

5x

15x

20x

60% 70% 80% 90% 100% 110% 120%

Source: Altimeter and FactSet 10/2014

10x 7X

15X


Customer Success Metrics

• Financial Metric• Revenue• Churn

• Customer Success-specific Metric• Customer Health• Satisfaction



2 Headwind

3 Tailwind

4 Net Revenue Retention

5 Magic Number

Batting Average1


1. Batting Average

# Customers Renewed In Period

÷# Customers Renewable In

Period

Are customers voting with their signature on the

value of your product or service?

Best-in-class:> 90%


2. Headwind

ARR/MRR of churn dollars including price decreases

and downgrades

÷Beginning of period

ARR/MRR

How much drag do you have on your growth?

Best-in-class:< 10%


3. Tailwind

ARR/MRR of up-sell dollars including price increases

and upgrades

÷Beginning of period

ARR/MRR

How much acceleration do you have to new

bookings?

Best-in-class:> 20%


4. Net Revenue Retention

Beginning of period ARR/MRR + ARR/MRR from tailwind – ARR/MRR from headwind

÷Beginning of period ARR/MRR

What’s the net dollar impact

from Customer Success?

Best-in-class:> 120%


5. Magic Number

ARR/MRR of renewals in period + ARR/MRR of up-sells in period

÷Fully-loaded cost of Customer Success team + extended

team

What’s the cost-effectiveness of

Customer Success?

Best-in-class:3-5X or higher


Other metrics to look at

- Same metrics by region, vertical, product, segment

- Churn by reason

- Top churns and up-sells

- Churn and up-sell by cohort


Tense-Based Metrics

Sales Customer Success

Past Bookings Renewals / Up-Sell

Present Market Share Benchmark

Future Pipeline Health Score


Lagging Indicators Leading Indicators

Too Late

Churn

Silence

Churn inquiryLate payments

No product usage

Frustration

Low NPS scoresLong support TTRNot referenceable

Disengaged

Not opening emailsDeclining adoption

Sponsor leaves

Success

“Sticky” feature usageProven ROI

Increasing adoption

Future Metrics


http://www.gainsight.com/pulsecheck2015/


Customer Success Benchmark Report

Download Your Copy

Today!

Download Your Copy

Today!

http://j.mp/csmbench


Q&A


July 15, 2015


THANK YOU


July 15, 2015

Business

5 hidden metrics that market leaders use to drive success