Measuring Your Success With CSM KPIs

May 10, 2017 Jim Jones

Measuring Your Success With CSM KPIsA wise mentor of mine told me years ago: “Don’t expect what you don’t inspect.” His point was that it’s not enough to set goals, objectives, and targets for a team - it’s also necessary to measure how you’re doing against what you’ve planned and communicated. If you can’t measure your team, how do you know if you’re making progress? Key Performance Indicators, or KPIs, allow you to do just that. KPIs for customer success teams is a hot topic these days. In this post, we’ll provide some general guidelines on building your own KPIs for your team.

To better illustrate what KPIs are and how to use them effectively, I’m going to compare your customer success team to a car. I’ll also define some of the key terms used in measuring customer success.

KPIs vs Metrics

As the name implies, a key performance indicator (or KPI) is a measurement of your team’s most essential goals and objectives. It represents a summary of how your team is doing relative to its overall plan for the month, quarter or year. KPIs should be limited to just a few numbers and should be visible to the team and to the rest of the company. Think of it as the dashboard on your car. Most of the time when you’re driving, you only need to monitor your speed and keep an eye on the gas gauge. The dashboard also has warning lights for your engine, your tires, etc. These lights don’t tell you what the exact problem is, but will highlight a critical or severe error that requires more investigation.

Metrics is the generic term for the universe of all things you could measure. Metrics provide more detailed information about KPIs and give you more insight into what factors are influencing a KPI. Metrics are best used by team managers and members and can help provide valuable feedback on performance. A metric for your car would be tire pressure on all four tires (plus maybe your spare). It’s not something you have to check often, but your dashboard should tell you when a deeper investigation is required.

Leading vs Lagging Indicators

Both KPIs and metrics can show you data in one of two ways - either they can be used to predict future events (leading indicators), or they can show events that have already occurred (lagging indicators). Think of the those leading KPIs and metrics as the view out your front windshield - you can see what road conditions you’ll face in the immediate future. Your odometer is a lagging indicator. It tells you how many miles you’ve driven your car, but it’s not terribly useful for predicting future performance.

The “Best” KPIs for Customer Success

New leaders of customer success organizations may want to know what the best or most appropriate KPIs are for their team. The short answer to that question is: “It depends.” KPIs must be specific to your company and your team. However, there are some general rules to be aware of when building your KPIs:

  • KPIs should measure your team’s impact on its largest goals and the goals of the company.

  • They are most often visual representations of your data - a chart, graph or dial that gives a quick indicator of whether something is good or bad.

  • You should have no more than 5-7 KPIs that you measure at any one time. Having more than this makes it harder to quickly understand the health of your organization.

  • They should also be a mix of leading and lagging indicators. This will give you a healthy balance of reviewing past performance and predicting future behavior.

  • KPIs should be highly visible not only to your customer success team but to the rest of the company including senior management.

  • Finally, they should show your team’s performance over a variety of timeframes - how you’re doing month, quarter and year to date.


With those guidelines in mind, here are some KPIs I’ve found useful in my previous roles:

  • Gross and Net Customer Retention: These are two different ways of looking at your customer churn.
    - Gross retention is a measure of annual revenue lost because a customer did not renew their subscription. This number will always be at or below 100% - a certain amount of customer loss is expected in the SaaS industry. If your total annual recurring revenue (ARR) is $250,000 and you lose a customer worth $25,000, then your gross retention would be 90%.
    - Net churn, on the other hand, factors in upsells and expansions within your existing customer base. This number should always be at or above 100%, because a healthy business is always expanding within its existing customer base. Let’s take the same example as above - you have ARR of $250,000 and lose a customer worth $25,000, but add $50,000 in expansion within your existing accounts, your net retention would be 110%.

  • Net Promoter Score (NPS): Net Promoter Score is typically something your company either hates or loves - there seems to be very little middle ground. In my experience, NPS is a good leading indicator, but it’s like a warning light on your car’s dashboard. It tells you whether your customer relationships are positive or negative, but diagnosing a bad result requires additional metrics. A full discussion on NPS is outside the scope of this article, but there is a wide body of writing on this topic that you may want to explore.

  • Renewal Quota and Achievement: If your customers are on subscriptions with a predictable schedule (monthly, quarterly or annual renewals) it should be easy to predict your group’s quota of expected renewal revenue. It’s helpful to track this on a monthly or quarterly basis as well as something to indicate the percentage or amount of quota that has already been closed.

  • Top 3-5 Renewals Per Quarter: I always include this on customer success dashboards to help focus your company’s efforts on the most important deals of a given quarter. Some of your renewals may be so significant to your business that they need visibility at the executive level and in other departments. Tracking these on your dashboard helps provide a call to action that other teams need to rally around for renewal efforts.

Again, there may be other KPIs that are appropriate for your business, but these are some that are common across many CS organizations.

Tracking And Reporting Your KPIs

While there are lots of fancy (and complex) data visualization tools available in the market today, you can also use some pretty simple methods to track and report on your KPIs.

The most successful strategy I’ve used in the past is to extract data from the systems that my teams use (customer relationship management software, billing/accounting software, case management systems, etc.) and put it into an Excel spreadsheet or a Google Sheet. This allows you to easily perform data calculations and to visualize the data using graphs or charts.

Graphs and charts in Excel or Google Sheets can easily be copied and pasted into PowerPoint or Google Slides. A presentation of KPIs should really be no more than one slide, and is best sent out on a weekly or monthly basis (depending on how much your data changes).

A Few Final Words…

We’ve merely scratched the surface of KPIs in this post, but hopefully, it’s provided some good food for thought on how to measure your team and what to report to the other parts of your company. KPIs aren’t designed to report on every aspect of your business - but monitoring them and making adjustments based on the data will help ensure your customer success team is successful at achieving their strategic goals.

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About the Author

Jim Jones

Jim Jones is the founder and CEO of Voyant Consulting, a Chicago-based firm that helps clients improve customer loyalty by improving their Customer Success organizations. In his previous roles with multiple international technology companies, Jim has a history of increasing customer loyalty, and improving customer retention by building world-class customer success and customer support groups. He has also been a featured speaker and blogger on the topics of customer success, voice of the customer programs and customer experience.

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