5 hidden metrics that market leaders use to drive success
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On-Demand Webinar Details Join us as customer success expert, Lincoln Murphy, reveals the 5 metrics market leaders use for implementing an effective success strategy. In this webinar we will discuss: • Determining high performing vs. low performing account managers. • Identifying false signs of growth and your hidden losses. • How to diagnose churn and what you can do to increase retention. • Getting the post-sales initial engagement phase right.
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5 hidden metrics that market leaders use to drive success
- 1. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. July 16, 2015 5 Hidden Metrics that Drive Customer Success ©2015 Gainsight. All Rights Reserved. 5 Hidden Metrics that Drive Customer Success July 16, 2015
- 2. hello@chartio.com (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
- 3. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. Presenter Lincoln Murphy Customer Success Evangelist Gainsight @lincolnmurphy
- 4. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. What Is Customer Success? Customer Success is when your customers achieve their Desired Outcome through their interactions with your company.
- 5. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. 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
- 6. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. David Skok Matrix Partners http://www.forentrepreneurs.com/why-churn-is-critical-in-saas/ Customer Success Drives First-order Growth
- 7. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. 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/
- 8. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. 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
- 9. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. Customer Success Metrics • Financial Metric • Revenue • Churn • Customer Success-specific Metric • Customer Health • Satisfaction
- 10. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. 5 Hidden Metrics that Drive Customer Success 2 Headwind 3 Tailwind 4 Net Revenue Retention 5 Magic Number Batting Average1
- 11. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. 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%
- 12. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. 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%
- 13. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. 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%
- 14. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. 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%
- 15. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. 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
- 16. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. 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
- 17. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. Tense-Based Metrics Sales Customer Success Past Bookings Renewals / Up-Sell Present Market Share Benchmark Future Pipeline Health Score
- 18. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. Lagging Indicators Leading Indicators Too Late Churn Silence Churn inquiry Late payments No product usage Frustration Low NPS scores Long support TTR Not referenceable Disengaged Not opening emails Declining adoption Sponsor leaves Success “Sticky” feature usage Proven ROI Increasing adoption Future Metrics
- 19. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. http://www.gainsight.com/pulsecheck2015/
- 20. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. Customer Success Benchmark Report Download Your Copy Today! Download Your Copy Today! http://j.mp/csmbench
- 21. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. Q&A ©2015 Gainsight. All Rights Reserved. July 15, 2015
- 22. hello@chartio.com (415) 990-5797©2015 Gainsight. All Rights Reserved. THANK YOU ©2015 Gainsight. All Rights Reserved. July 15, 2015
Editor's Notes
- Good feedback on this Industry problem we are trying to solve Switching costs have gone down and competition has gone up Lead the conversation and recommendation Marco trend Analyst report