Customer Health Score

Date created: Sep 22, 2020  •   Last updated: Sep 22, 2020

What is Customer Health Score?

A Customer Health Score is a single, calculated number that reflects a customer’s health across multiple dimensions. By monitoring Customer Health Scores, you can detect early signals of increased friction or declining customer engagement. You can also identify highly engaged and loyal clients, who would make excellent advocates.

Alternate names: User Health Score

Formula

ƒ Average(Customer Health Score)

How to calculate

A company includes 4 evenly weighted dimensions in its Customer Health Score: Product Usage, Customer Support, Customer Satisfaction, and Business Outcomes. A key customer scores 80%, 60%, 75%, and 60% on each of the 4 dimensions, for an overall Customer Health Score of (80+60+75+60)/4 = 69%

Customer Health Score

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More about this metric

A Customer Health Score is a single, calculated number that reflects a customer’s health across multiple dimensions. The Customer Health Score construct became popular with the rise of Customer Success as a discipline. Some common objectives of implementing a Customer Health Score are to:

  1. Provide a data-driven definition of how healthy a customer is, rather than relying on gut feel and personal opinion

  2. Enable proactive intervention long before a customer is at risk of churning

  3. Identify advocates who can influence prospects to become customers

  4. Determine how different customer segments compare, to identify underlying issues that may be specific to one segment

The dimensions included in a Customer Health Score vary by company, and are based on the factors that are most important to your customers and your company in providing long term customer value and an optimal customer experience. Some dimensions can be weighted more heavily than others in the overall calculation, if they are deemed to have a bigger impact on overall customer health.

Examples of common dimensions and underlying metrics included in health scores are:

  1. Product Usage & Adoption, for example number of purchased licenses assigned, number of logins in set period of time, activation rate, frequency of use of high value features, product training and certification consumed

  2. Customer Support and Operations, for example, number of open support cases, time to case resolution, number of cloud processing issues

  3. Strength of Relationship, for example, number of Meaningful Interactions in a set period of time, number of references provided in set period of time

  4. Customer Satisfaction, for example Customer Satisfaction score, Net Promoter Score, and/or Customer Effort Score

  5. Business Outcomes, for example, number of business outcomes achieved, $ saved, 

By monitoring health scores for your customers against a baseline, you can detect early signals of increased friction, or declining customer engagement or customer value, which could ultimately lead to churn. You can then proactively take action to address the situation, either through automated “tech touch” interactions or by having a Customer Success Manager engage for a 1-1 conversation.

Most modern Customer Success tools include the ability to track and share Customer Health Scores. Some companies restrict Customer Health Scores for internal use, while others expose Customer Health Scores to their customers, to facilitate a shared view of the current state and a starting point for forward looking discussions.

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