We often encounter the question, "is there a way to measure how well my Customer Success Team is performing?" After reading the Joel Test, we've come up with our own quick test to assess the maturity of Customer Success as a SaaS vendor. The great part about it is that it only takes about 3 minutes to complete!
If you are a customer success professional considering taking a role at a SaaS vendor, this test can give you a quick sense of how customer success operates there.
The Amity Test
1. Do you have an up-to-date list of all your customers?
2. Do you measure churn and the impact it has on your company's growth?
3. Do you segment your customer base?
4. Do you track product and feature adoption?
5. Do you know the health of all of your customers?
6. Do you have a documented onboarding process?
7. Do you know the renewal date of all your customers?
8. Do you know how your customer is using your product?
9. Do you know when you last engaged with your customer?
10. Do you measure team performance?
11. Do you communicate how much revenue is at risk?
12. Do you measure the impact your Customer Success team is having
13. Do you measure the value being gained by your customer?
14. Do you have a success plan for each customer (or tier)?
15. Do you regularly report Customer Success KPIs?
16. Do you measure and track the cost of retention?
What's convenient about The Amity Test is it's easy to get a quick yes or no answer to each question. Scoring is simple, for each "yes" answer, you give your team 1 point.
A score of 16 is perfect, 15 is tolerable, but 14 or lower and you've got serious problems. The truth is that most Customer Success Teams are running with a score of 4 or 5 when they could be running at a full 16. Of course, these are not the only factors that determine success or failure but, if you can get these 16 things right, you'll have a disciplined team that can consistently deliver.
Do you have an up-to-date list of all your customers?Ask yourself one question: How complete are my records? Your customers are very important to your business so there are many reasons why it’s important to have an up-to-date list of your customers. Inaccurate or incomplete customer data will affect both sales and marketing performance.
Can you measure churn and the impact it has on your company's growth?Customer churn is the rate of customers who are no are longer using your product. It is important to know the impact it has on your company’s growth because nothing can cause you to lose revenue and growth more than churn.
Do you segment your customer base?Not all customers are the same. Therefore, you cannot take a one-size-fits-all approach to your customers. Consider this, the ‘Enterprise’ tier is typically more complex and, as a result, more difficult to implement. Enterprise customers need and pay for higher levels of service. As a result, segmenting your customers into smaller groups allows you to focus your attention on the right customer at the right time.
Do you track product and feature adoption?The number one driver of customer satisfaction in the cloud is strong product adoption. Every product has certain features or functionality that make it “sticky”. Stickiness occurs when there is a direct impact on a customer’s productivity to when they start using your product and when they stop. It is important to know how you drive the right product adoption and how that affects growth.
Do you know the health of all of your customers?Every SaaS company sets their own benchmarks tied to activities they deem important to customer health in an attempt to keep customers engaged and happy—and ultimately reduce churn. SaaS companies set customer health scores that typically include: User Activity, Engagements, Subscriptions, Risk Assessment, Lifecycle status, and Outcomes.
Do you have a documented onboarding process?Onboarding is the most effective way to get new customers using your software as quickly as possible. Customer onboarding not only starts the implementation process but also marks the beginning of a relationship between a new customer and your company. A good onboarding process will have a profound impact on customer loyalty because instead of leaving your customers to fend for themselves, you are taking the time to help them through the implementation.
Do you know the renewal date of your customers?How can a CSM team be expected to renew/grow revenue if they don’t know the renewal date of their customers? They can’t. Customer Success teams are a key part of customer retention, therefore, the impact of a Customer Success team is seen during the renewal period. Knowing your customers renewal date will help your team have the control needed to own renewals, up-sells, and cross-sells.
Do you know how your customer is using your product?Understanding if your customers are fully utilizing the features and benefits of your product is an important responsibility of a Customer Success organization. If your customers are not fully utilizing your software your risk of churn increases substantially.
Do you know when you last engaged with your customer?Understanding when your customers interact with your software optimizes their experience. Send communications when they're most engaged and likely to perform an action. Supply customers with the optimal chance to reach your business goals.
Can you measure team performance?It is very important to understand how well the members of your Customer Success team are performing and how they compare to other members.
Can you communicate how much revenue is at risk?Giving your sales team access to customer adoption and churn risk accounts can be very powerful. If your organization has implemented a Customer Success application ensure you don’t limit access to only the Customer Success team, give the sales organization the insight they need to understand the health of their accounts. No salesperson likes surprises, especially when trying to upsell within an account.
Can you measure the impact your Customer Success team is having?If you have a clear picture of that risk, you can measure (and report!) the impact your customer success team’s intervention had on mitigating that risk.
Can you measure the value being gained by your customer?Creating customer value is one of the most important aspects for a business to become successful. Without an ability to measure the value, there is no way to express the key business outcomes that your product is delivering.
Do you have a success plan for each customer (or tier)?Is your customer producing the outcomes they expected by using the product? By setting dynamic priorities, a Customer Success Manager (CSM) can focus on the right customer at the right time. This allows the CSM to proactively reach out to the customer and help them understand why their outcome levels are below their goal, and to create a plan to improve their performance. This is an example of proactive, outcome-focussed customer success.
Do you regularly report Customer Success KPIs?Delivering business value can be a tall order. It requires gaining an understanding of the business drivers: the problem or opportunity that precipitated the project and defining a clear set of business objectives to address the problem. It’s important to have a consistent way to report how you’re doing in Customer Success.
Do you measure and track the cost of retention?Retaining your Customers is and will always be a key concern for any SaaS company. A repeat customer spends more than a new customer. Therefore, having an ability to track your retention efforts will allow you to optimize, yielding a higher ROI. Retention has been called the foundation of all growth.