Health score: understand how to measure your customers’ health!

Customer success is an area in which every business should invest. After all, it is directly related to customer satisfaction and success. As part of this work, business owners, managers and coordinators need to monitor indicators such as the health score.

Monitoring this and other metrics allows you to better understand the situation and level of consumer engagement. This way, business owners and employees can take steps to improve it and avoid cancellations.

Want to learn more about the health score, including tips for measuring and applying it? Then keep reading the information in this content!

What is the health score?

The health score is an indicator whose purpose is to measure the health of the relationship between the customer and the company. In practice, it helps to assess how satisfied and engaged the consumer is with a business, its products or services.

To this end, the health score involves the combination of metrics such as product or service usage, feedback and interactions. The objective is to generate a score for each customer , making it possible to project consumer behavior.

For example, using the health score, you can analyze whether a customer is more likely to request a cancellation or to make a renewal or new purchase.

What are the benefits of using this indicator?

Now that you know the concept of health score, it is worth understanding in more detail the benefits of using the metric in companies. The main point is that the indicator helps to define strategies with customer retention in mind.

Imagine that the health score helped you identify customers at risk of churn. Given this, there are measures you can take to reverse the situation and prevent an increase in the churn rate .

Furthermore, by monitoring your customers’ health score, you can analyze which consumers have a higher score. This way, you can see which ones are more engaged with your business — which usually reflects in a higher level of loyalty and retention .

The ideal is to have the largest number of consumers with a high health score. After all, this data means that customers are satisfied and likely to continue using the company ‘s products or services .

By monitoring your health score, you can also identify potential issues in your customer journey. Based on the situation, you can implement actions to solve them and ensure a more satisfactory experience for your customers.

Finally, monitoring the indicator allows you to assign more value to products and services. The reason is that better understanding customer behavior , expectations and needs allows you to improve the company’s solutions, making them more attractive to consumers.

How to apply the health score to measure the health of your relationship with customers?

You’ve learned about the concept and relevance of the health score for businesses. But how can you apply the indicator to measure the health of your customers’ relationship with your company in practice?

For the task, follow the tips and guidelines below!

Define metrics relevant to the business

As a starting point, establish the most important engagement metrics for your business and customer success. These could include usage frequency, support interactions, feedback, and more.

Take for example a SaaS (Software as a Service) company that offers a project management platform. Some interesting metrics to consider in this case are:

  • how many times users access the platform per day or per week;
  • which features customers use most — project creation, dashboards, etc.;
  • how long it takes the support team to respond to user requests.

Create a health score model

Once you have defined your metrics, you need to create a model that combines them into a single satisfaction indicator. This can be done using simple classifications (e.g., green, yellow, and red) or more detailed scores.

Following the SaaS company’s example, daily use of the platform would receive a higher score — green or 10 points. A high response time from the support team or negative feedback could be classified as red or 1 point.

See the table for a summarized example of a health score, considering a SaaS company:

Metric Company A Company B Company C
Frequency of use 10 6 3
Satisfaction with support 9 5 4
Positive feedback 9 6 4
Average Score 9.3 5.6 3.6

In the example, notice that company A is the one that achieved the highest customer engagement and satisfaction. Meanwhile, company B’s score is only average and company C’s is poor, requiring more attention to avoid cancellations.

In this case, the health score was calculated by averaging the scores of different indicators. However, you can use a simpler method by simply adding the values. The higher the result of the sum of these scores for each indicator, the better the health score.

An alternative is to classify each metric as follows:

  • 0 to 4: unsatisfactory performance (poor health);
  • 5 to 7: acceptable performance (average health);
  • 8 to 10: great performance (high health).

Integrate data and rely on automations

If your company has a large number of customers, it can be difficult to measure health scores manually. Therefore, consider using systems that integrate data, allowing you to update the metric automatically and reflect the current situation of each customer .

Monitor your health score regularly

Another tip for applying the health score is to monitor your results frequently. This gives you the opportunity to closely monitor customer engagement and take quick action in cases where consumers are not very engaged with a product or service.

Implement actions

With the structured health score, create actions and processes for the service and customer success teams to act on the indicator results. This way, it is possible not only to evaluate the health of your relationship with customers, but also to improve it.

As you have seen, the health score helps to analyze customer engagement, satisfaction and experience with your brand. Therefore, try to implement it strategically to avoid cancellations, strengthen the relationship with consumers and add more value to the solutions offered.

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