What's your process for figuring out what metrics to hold customer success accountable for?

I'd structure my thoughts tailored to the company's goals, customer needs, and product/service offerings, distinguish between leading and lagging indicators, establish the median metric numbers, and improvise as we go from time to time.

1. Understand Company Goals: I will start by understanding the company's goals. These could include revenue growth, customer retention, market share expansion, specific product adoption targets, and multi-product strategies.
   

2. Align with Business Objectives: Identify how we can contribute to achieving these goals. For example, if the company aims to increase revenue through upsells and expansions, we may focus on improving product adoption and identifying upsell opportunities.
   

3. Identify Customer Needs: It's important to monitor your customers' needs and expectations. Conduct customer surveys, interviews, and feedback analysis to identify key areas.
   

4. Milestones: Map the journey from onboarding to renewal/advocacy. If needed, develop the enhanced engagement model and ensure the impact is delivered from all perspectives.
   

5. Identify Metrics: Based on the above factors, select meaningful and actionable metrics. These may include retention rate, churn rate, NPS, product adoption metrics, expansion revenue, customer health scores, and Verified Outcomes.
   

6. Distinguish Leading and Lagging Indicators: Balance between leading indicators (predictive of future success) and lagging indicators (reflecting past performance). For example, while the retention rate is a lagging indicator, the product adoption rate may be a leading indicator of future retention.
   

7. Iterate and Improve: Continuously review and refine your customer success metrics based on feedback, changes in business strategy, and evolving customer needs. Be open to experimenting with new metrics and approaches that better align with company goals.
   

8. Communicate and Align: Communicate the selected metrics clearly to the customer success team and ensure alignment with their roles and responsibilities. Provide training and resources to empower them to drive success based on these metrics.
   

By following this process, one can align with the company's goals and objectives, enabling your team to effectively drive value for both customers and the business.

Let me walk you through a systematic approach for developing customer success metrics:

1. Start with core business objectives:

• Customer retention/churn rate

• Expansion revenue/upsells

• Customer lifetime value (CLV)

• Logo retention (especially for enterprise)

2. Break those down into leading indicators

• Product adoption rates

• ROI delivered across the customer base

• QBRs completed on schedule

• Customer response times: AI can help identify this very easily (Across emails and support)

• Customer engagement levels (support tickets, check-ins, training sessions) - AI can help look at the strength of relationships and how deeply embedded we are in a customer org

• Sentiment: Customer sentiment across emails, support tickets and phone calls (AI can help here)

  • I don't believe that NPS is the right metric to measure CSMs on, but it is the right metric to track (low response rates). NPS can be related to overall experience with product, onboarding, and CS; therefore, one team can not be held accountable for it. So, while tracking NPS as a company metric is essential, it is not the right metric to track at a CSM level.

The key is finding the right balance between:

• Lagging indicators (like churn) that show results

• Leading indicators that help predict and prevent issues

• Activity metrics that drive desired outcomes

• Quality metrics that ensure sustainable growth

You have to look at what the business cares about and then work backwards to how Customer Success fits into those overall targets. For example, if the business has a retention problem, it's probably important to have a Gross Revenue Retention KPI. If, however, the business is more interested in price increases and cross-sell and upsell, then tie CSMs to Net Revenue Retention. At AlertMedia, there was a business-wide push to build out our Advocacy program so we incentivized CSMs to source advocates and add them to our pool. This dramatically increased the number of advocates we have to pull from going forward.