Just providing quality services or products isn’t sufficient for businesses to thrive in today’s competitive environment. Businesses now need to ensure that their customers successfully use those offerings. The concept of customer success has increasingly become popular because successful customers are more likely to stay loyal, provide positive referrals, and drive growth for companies. According to Salesforce research, 89% of customers are likely to make a purchase after a positive experience.
One of the most effective ways through which companies can measure customer success is by implementing key performance indicators.
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Customer Retention Rates
One of the clearest indicators of happy customers is whether a company is able to retain its consumers. This metric determines the fraction of customers a company can retain over a period, typically calculated annually or monthly. The higher your company’s retention rate, the more it suggests that customers are finding value and are satisfied. In contrast, low retention rates indicate that customers may not get what they need.
Customer Satisfaction Score (CSAT Score)
Another greatest indicator of customer success, this KPI is used to measure what its name suggests customer satisfaction with your product or service. CSAT is considered one of the most direct and reliable indicators of a company’s performance that can be used to improve its product or service. It generally considers two aspects of your company: your product & your services. A high CSAT score indicates high customer loyalty and also the chance for further customer acquisitions. According to research by Khoros, 83% consider the CSAT to be the key metric they check before buying any product or service.
Net Promoter Score (NPS)
NPS is one of the widely used key performance indicators that measure customer loyalty and satisfaction by asking customers how likely they are to recommend the company to others. Another key benefit of the NPS is that it provides both quantitative and qualitative data about your customers. Participants are asked not only to rate their experience on a numeric scale but also to explain their score. This allows the business to analyse feedback based on the scores and then delve into customer experiences if any abnormal or outlying results are identified. By tracking this indicator, companies get the idea of their most satisfied and dissatisfied customers for tailoring loyalty programs, engagement strategies and referral programs.
Churn Rate
This KPI indicates how many customers have stopped using your products or services. It determines the percentage of people who have cancelled subscriptions, closed accounts or didn’t renew them. The churn rate is critical because it directly affects a company’s growth. A high churn rate could signal underlying issues, such as poor product fit, inadequate onboarding, or lack of customer support. Businesses use this KPI to take proactive steps to control the increasing attrition rate. By identifying early warning signs—such as declining product usage or negative feedback—businesses reach out to at-risk customers before they decide to leave.
Customer Lifetime Value (CLV)
CLV is one of the most fundamental metrics companies use to determine the lifespan of a customer for a particular product or service of the company. Simply put, this indicator determines how much revenue your company can generate from one customer. CLV not only highlights customer success but also enables them to invest their resources strategically in customer acquisition and retention. For instance, companies with high CLV invest in more premium support, personalised marketing campaigns and exclusive product updates for these high-value customers. Additionally, companies use CLV data to segment customers and tailor their offerings to different customer profiles.
Customer Effort Score (CES)
This metric determines how much effort a customer needs to apply to get help from your business regarding products or services. Moreover, according to Hubspot, CES is 40% more effective in determining customer loyalty than customer satisfaction. The higher the CES score, the more disloyal consumers are to your business. According to the same research, 96% of the users who have to apply more effort to get help report being disloyal in the future. By tracking this metric, businesses determine the investment strategy for their customer support services.
The right KPIs for measuring customer success are crucial for understanding how well customers are achieving their goals and driving continuous improvements within a company. By focusing on these KPIs organisations can foster long-term relationships, optimise their offerings, and, ultimately, grow their businesses through a customer-centric approach.
