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How to Build an Effective Customer Health Model
Part 1
Part 2 Measuring the Effectiveness of a
Customer Health Model
10am Pacific / 1pm Eastern
Register @ http://bit.ly/totango-health
Today’s Speakers
Jill Rubin Chief Marketing Officer Totango
Isabelle Rochon Customer Success Director iPerceptions
What is a customer health model?
A customer health model is a framework to identify the status of your customers – are they in good, average, or poor health – in order to determine who needs attention, why and the proper course of action. It is comprised of health scores and health profiles.
Best practices for a health score
• It combines several KPIs, metrics, and other data sources into one comprehensive metric to help you understand the overall health
• It takes the complexity of your customer base and represents it in
simplified manner
• It should be credible
• It needs be actionable and indicate the reasons for the change in health
• It should be automated and reflect customers’ real-time health status
A good health score definition is:
Simple to understand
Accurate & Predictive
Actionable
Rule #1
PRODUCT ENGAGEMENT Are users logging in and using the application in the way to maximize the benefits?
SERVICE UTILIZATION Is the customer fully utilizing their subscription?
CUSTOMER SATISFACTION What is the feedback from customers and CSMs?
SUPPORT & OPERATIONS Are there outstanding support, SLA and/or invoicing issues?
1.
2.
3.
4.
5.
PRIMARY INDICATORS: BUSINESS OUTCOMES Is the customer getting the end result they expected when they purchased your product?
SECONDARY INDICATORS:
• Application based
• Leading
• Objective
• Full customer coverage
• Lagging
• Subjective
• Partial customer coverage
What impacts customer health?
Health Score in Totango
Green – Continue to drive value
Yellow – Monitor areas of concern
Red – Urgency is high – need to engage!
Create different health profiles for your different customer segments
Rule #2
Best practices for a health profile • Segment customers based on particular characteristics with
different behavior • Types of accounts • Different products • Lifecycle stage
• Each segment should have its own health definition and score
• Each customer should qualify for only one segment at a time
• Enables you to roll up the health of all accounts into one health score for the entire portfolio
Customer Health
Console:
A comprehensive view of all accounts
Example – Marketing Automation Vendor
Health Definitions Onboarding Established
Business Outcomes Launch first campaign - Ongoing increase of leads - Good open rates
Product Usage/Engagement
Instance configured Email templates created
Email feature Reporting feature
Service Utilization - Size of database / contract # Seats / contract
Customer Satisfaction Mid or Post onboarding survey
Annual NPS CSM sentiment
Operations: Support, Finance, etc
- No high-priority tickets No payment delinquencies
Health Metrics
Health Profiles
Benefits of a Customer Health Model
• Gives an understanding of change in health status
• Helps forecast churn, likely renewals and potential upsells
• Communicates status clearly with the organization
• Holds CSMs accountable for their portfolio
• Drives a clear path to action
ENGAGEMENT HOW YOU ENGAGE MATTERS.
iPerceptions Who we are and what we do
• Voice of Customer (VoC) SaaS company • 100 enterprise clients • 6 CSMs and 5 implementation specialists • Platform and consulting services (analytics, integration,
custom implementation, etc.) • Multi-level accounts: Licenses at the parent level and
projects at the child level
Our First Approach The data we looked at
We tried to identify churn factors by looking at historical data, such as:
• Financial (size of deal) • Upsell within the first year • Survey responses collected (what we call Collections) • Self-serve vs. Fully-serviced project • How long have they been clients • Customer satisfaction score
Our First Approach The health metrics we included
METRIC WHY (our assumptions)
Contract Size
Indicated complexity of the account & time involved for onboarding teams
Survey response collection size
Low collection (too small of a sample size) makes it difficult to get good insights
Usage frequency Frequency of logging in indicated platform usage
Did they upsell within the first year?
It was the only common data point that correlated to renewal
Our First Approach Creating different health profiles
We created 20 different health profiles for our 100 enterprise clients based on a variety of criteria:
• Engagement/usage • Survey responses collected • Fully-managed vs. Self-serve • Depth of integration • Reporting • Types of services
Our First Approach Evaluating the health model
We took a 2-step approach to validate our health model: 1. We monitored customer health for a few weeks to see if the health
scores made sense 2. We asked the CSM, Management and Sales to qualify each client as
Healthy, Neutral or Unhappy to compare how their perceptions matched Totango’s health results.
It didn’t…. Not even close, but why?
Accurate
Simple
Actionable
How do we fix health? Improvements to our model
I asked for help! Our Totango CSM made some recommendations. We found that we needed to improve the following:
1. Make sure the right health metrics were included to make health more accurate and predictive (example, include onboarding time)
2. Simplify our health profile segments (we over segmented)
3. Start with a basic health score to make it actionable
4. Ditch our preconcieved notions of what healthy was
5. Stop manipulating the data to say what we wanted it to say
Our New Approach Health metrics & profiles redefined
METRIC WHY Onboarding time If delayed to launch, it affected program
performance/reporting and client satisfaction Survey response collection size
Low collection makes it difficult to get good insights
Platform usage Usage of specific modules - Analyze (full service) - Project set up (self serve)
Did they upsell within the first year?
It was the only common data point that correlated to renewal
Integration depth The deeper the integration with other tools, the stickier we are
Three big changes!
#1
new
new
new
Our New Approach Health metrics & profiles redefined
We reduced our customer health profiles from 20 down to 3 We use Totango’s Enterprise Health to calculate and monitor the health of accounts at the parent level, not just at individual projects (the child level). Now account managers know the status of each account without having to look into their individual projects.
Three big changes!
#2
#3
Our New Approach Viewing Health in Totango
Our New Approach Evaluating the new health model
Our new 3-step approach to validating our customer health model: 1. We review our client health profile monthly 2. We analyze the clients that fall into the default category – it tells us
what we’ve missed 3. When a client churns or we have a difficult renewal, we review
their health profile and metrics to see if we missed any other churn indicator
What We Learned From Customer Health
• It allowed us to identify our strengths and weaknesses as a company
• Increased the upsell of new business and overall client satisfaction
• Helped us identify other factors that could impact customer health:
• QBR • In-person visits • Frequency of engagement • Relationship with the CSM and SAM • Account transfer
Key Takeaways
• Keep it simple • Identify your churn indicators and use Totango to flag
any potential issues • Continuously optimize – your client’s needs change • Make client health and renewal a company wide goal.
Retention is a team effort!
Questions?
www.totango.com @totango
Jill Rubin Chief Marketing Officer
Isabelle Rochon Director of Customer Success
www.iperceptions.com @iperceptions
Part 2 Measuring the Effectiveness of a
Customer Health Model
10am Pacific / 1pm Eastern
Register @ http://bit.ly/totango-health
