Customer Success Metrics and KPIs
You Need to be Tracking

Customer churn rate, customer satisfaction scores and customer retention scores are only a few of the many customer success metrics you, as a business, should be tracking. 

In order to maximize your efficiency and profitability, you need to keep an eye on things like average revenue per user, customer retention cost and monthly recurring revenue. 

Here are some of the customer success metrics we recommend that you should track.


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What are Customer Success Metrics?

Defining the success of your business can feel like one of those things that is fairly self-explanatory. You could just say ‘am I making money?’ and satisfy yourself with that answer. 

But really, you need to know how well your strategies are working and why they are working (or otherwise), which is where customer success KPIs come in. 

Customer success metrics are the methods you can use to measure how well your strategies and practices are working. They can tell you to what extent your products are being adopted by your customers, how you are retaining buyers, customer satisfaction, how much revenue each person is bringing in and so much more. 

These are crucial to making your business as efficient as possible and will tell you what’s going right and what’s going wrong, from your pricing structure to your technical setup.

How Do You Measure Customer Success? 

The key thing to consider about how to measure customer success is knowing exactly what to track. Some things might not be important for your needs, some things might be incredibly important, but you need someone to guide you through it to figure out what you need. This is where Influitive comes in.

Customer Onboarding

Through our customer onboarding process, Influitive can identify your needs and help you track them through our customer advocacy software.

We’ll give you an in-depth overview of our platform and explain how it can meet your needs, and we’ll present case studies, relevant to your situation, to show how we can help you. 

We can discuss your goals and requirements, and from there identify which success metrics are most important to you.

From there, we can pinpoint the ways Influitive can help you, and you can request a demo of our platform so you can see first hand how we use targeted recognition, rewards and personalized content to turn customers into loyal advocates to boost business growth, retention and profits. 

15 Customer Success Metrics to Start Tracking

1. Customer Churn Rate

Customer churn rate essentially looks at how many customers you lose over a given time period. 

You could easily take a look at your customer numbers and be satisfied with how your business is performing, but if those customers are just completing one transaction with you and then never coming back, your business could be running in a very inefficient way. If you have a high customer churn rate, sooner or later you will run out of new customers – it’s much better to have customers that keep coming back to use your business. 

How to Measure Customer Churn Rate

There are many different ways you can identify customers who you have lost, or have ‘churned.’ These include: closed or dormant accounts with your business; people who have canceled subscription; if you operate on a contract basis, those who have not renewed those contracts; and on a basic level, customers who have either purchased a product or used a service once and not returned. 

It’s pretty easy to calculate your churn rate: simply choose a time period (it could be a month, it could be a financial quarter), take your total number of churned customers over that time, divide it by the total number of overall customers and then multiply that number by 100. 

Once you have your churn rate, you can come up with strategies for how to lower it.

2. Average Revenue Per User 

It’s important for you to understand exactly how much money each user or customer is bringing into your business, so figuring out your average revenue per user is one of the most important and basic metrics you can use to measure the success of your business.

You can use this number to gain an insight into your customer behaviors, track growth, compare your own performance against your competitors, plan financially and judge the efficiency of your business.

How to Calculate Average Revenue Per User

Sometimes the most basic metrics are the most crucial, and happily in this case they are the easiest to figure out: simply take your total revenue over a designated time period and divide that number by your total number of users or customers. 

3. Monthly Recurring Revenue (MRR)

It’s going to be much easier to make plans for your business if you know how much money is coming in each month, right? Monthly recurring revenue (MRR) is simply that: a calculation of a business’s predictable revenue over a single month. 

As well as being a great way of helping you make financial plans, MRR is a great way of measuring growth too: it’s pretty basic but if the line on the MRR graph is going up, then you’ve got a fairly decent idea that your business is in pretty good shape. 

How to Calculate MRR

If you are a business that relies mainly on subscribers, MRR is a pretty simple metric to figure out: after all, if you know that a certain amount of people are paying a fixed amount of money each month, you can easily tot up your MRR.

However, whatever your business, it’s pretty straightforward: simply take your average monthly revenue per customer or user, and multiply it by your total number of monthly users. 

4. Net Dollar Retention

Now we’re starting to get into the more granular and involved metrics, but this is one of the most important for judging growth or otherwise in your business. 

Net dollar retention (NDR), sometimes known as net revenue retention, is a way of measuring how much your revenue over a specified time period has grown or shrunk, taking into account customer churn, as well as differences in the type of service or product your customer is paying for. Essentially NDR is a way of measuring how much you have gained or lost from existing customers or users. 

So, for example, if your business relies on subscriptions, NDR takes into account customers that upgrade their plan, or pay for additional services, or simply cancel.

How to Calculate NDR

For this you need your MRR – add to that the money gained from upgrades and additional purchases, then minus the lost revenue from downgrades and also minus the lost revenue from customer churn. Take that figure and divide it by your MRR then multiply that by 100 to come up with your percentage increase or decrease.. 

So for example, if your MRR is $100,000, you have gained $20,000 from upgrades but lost $5,000 from downgrades and a further $5,000 from churn, the equation looks like this:

 ($100,000 + $20,000 – $5,000 – $5,000 = $110,000) / $100,000 x 100 = 110 – this would mean your business revenue has grown by 10 per cent. 

5. Net Promoter Score

While all the customer success metrics so far have been hard numbers, this is a little more difficult to quantify, but still very important. A net promoter score is essentially a measurement that allows you to evaluate how likely your customers are to recommend your business to someone else, usually by asking them to give aspects of your service a rating.

How to Calculate Net Promoter Score

You will need to conduct surveys among your customers and ask them to rank, on a scale of 1-10, how likely they are to recommend your business. You can then divide these customers into three categories:

  • Those that rank you 0-6 are DETRACTORS
  • Those that rank you 7-8 are PASSIVES
  • Those that rank you 9-10 are PROMOTERS

To get your Net Promoter Score, simply subtract the percentage of promoters from the percentage of detractors. 


6. Customer Satisfaction Score

This is a similar idea to the Net Promoter Score, but instead of asking your customers how likely they are to recommend your business, you are simply asking them how satisfied they are with your service, or a specific aspect of your service. 

The benefits of this are obvious, and while asking for a mark out of ten may be arbitrary to an extent, these are still useful to measure the performance of your business.

How to Calculate Your Customer Satisfaction Score

Like the Net Promoter Score, ask your customers to rank your service out of ten. Then take the number of top ranked scores, or those that would classify themselves as extremely satisfied – everyone who rated you 8 or higher – then divide that number by the total number of responders and multiply that number by 100. You will then have a percentage of those you can confidently surmise are extremely satisfied with your service. 

7. Conversion Rate

Put simply, your conversion rate is how effectively you convert potential customers into actual customers. Say you run an ecommerce business: the conversion rate could be the percentage of people who actually buy something, measured against the number of people who visit your website. 

There are other ways to measure conversion rate, rather than simply counting the number of people who buy a product. It could be how many people subscribe to a mailing list, or register on a website for updates about a particular service, or take out a subscription of some kind.

How to Calculate Conversion Rate

Again, this will depend on the type of business you run, but in simple terms all you will need to do is take the number of ‘conversions’ (however you are defining that, as mentioned above), divide it by the number of visitors, then multiply that number by 100 to get your conversion rate percentage. 

8. Customer Health Score

A customer health score is a metric designed to rate the likelihood of a potential customer turning into an actual customer. It is also something you can use to try and predict rates of customer churn. It will also help you target certain customers with your marketing: if you determine a customer is more likely to purchase a product or renew a subscription, you can tailor your communication with them accordingly.

It can also help you identify unhappy customers and help you in your efforts to identify problems with your business and how it is run. 

How to Calculate Customer Health Score

This particular metric is slightly less definite: you probably won’t be able to come up with a percentage score, but it is still possible to measure things in some respect. You can, for example, measure how much time a customer spends either using your service or browsing your products. If your business runs on a subscription model, you can look at whether a customer has renewed that subscription previously. Or if you have a service with various elements to it, you can log how many features of that service a particular customer uses. 

9. Customer Lifetime Value

This is the ultimate extension of a few metrics that we have already discussed: customer lifetime value is a KPI that tries to judge how much a customer is worth to your business throughout your entire relationship with them. 

It can inform how you deal with individual customers, but perhaps most importantly it can help you decide how much time and money to invest in retaining existing customers, as opposed to attracting new ones. 

How to Calculate Customer Lifetime Value

There’s a fairly simple formula, which will admittedly be slightly trickier to apply to young businesses, but useful nonetheless. Take the average amount of money each customer spends, multiply that by the average purchase frequency, then multiply that figure by the average length of time your customers spend with you. The figure you come out with will be your customer lifetime value.

10. Customer Retention Cost

All of the customer success KPIs listed here are important, but this is among the most vital for an efficient business. In short it is a metric designed to identify how much it costs to retain each customer, a vital part of any business considering how difficult it can be to attract new customers. 

It can help you decide how to allocate your resources, and make informed decisions on where to direct your budget, whether it is more cost effective to direct more towards customer retention or to external marketing aimed at fresh business.

How to Calculate Customer Retention Cost

You will need to carefully gather all the costs involved in retaining customers, whether that’s customer service costs, discounts given to existing customers or something as simple as newsletters. Add up all those costs, and divide that number by your total number of customers. 



11. Customer Repeat Purchase Rate

This is another metric designed to measure how frequently existing customers will spend additional money on your products or services. You can either keep this pretty basic, dividing your customer base into those who have purchased something once and those who have purchased something more than once, or be slightly more granular by dividing your customers into tiers – those who have made 1-5 purchases, those who have made 6-10 purchases and so on. 

It can help you judge how effective certain marketing efforts have been: for example if your customer repeat purchase rate spikes after a particular drive, you can be pretty sure that you are doing something right. 

How to Calculate Customer Repeat Purchase Rate

Simply take the number of customers who have made more than one purchase (or, if you are taking the slightly more involved approach, look at the number of customers in each ‘tier’), divide that figure by the total number of customers and multiply that number by 100 to get your customer repeat purchase percentage. 

12. Qualitative Customer Feedback

This is another metric that isn’t going to spit out a nice, clear number at the end, but it remains a very important part of your customer success metrics, if only because there are some things that numbers alone cannot tell you. 

By using customer feedback forms with an open field allowing customers to write whatever they want, they can explain what is good and what is bad about aspects of your business, why they have chosen to use particular services and what would persuade them to make more purchases. 

13. First Contact Resolution Rate (FCRR)

One of the key ways to measure customer success is how quickly problems are resolved. And the quickest way to resolve issues raised by customers is at the first point of contact. Therefore, the first contact resolution rate (FCRR) is the proportion of customer support queries that can be immediately resolved. 

The benefits of having a high FCRR are clear: existing customers are more likely to stick with you, and if you achieve a reputation as somewhere with good customer service, new business will be easier to attract too. 

How to Measure First Contact Resolution Rate

A lot of this will be defined by how you define a ‘resolution’: that’s up to you, because different businesses will have different definitions of how issues are resolved. But once you have come up with that definition, simply divide the number of issues resolved with the first contact by the total number of issues raised, and multiply that number by 100 to get your percentage figure. 

14. Customer Effort Score

Do not underestimate how time impacts how likely a customer is to either begin a relationship with your business, or retain it. If it takes a long time to perform certain actions or access your services, it’s more likely that customers will look for someone else. 

How much time and effort does a customer need to put in to access your services? How much time and effort goes into seeking customer support? How clear are the instructions on your website?

How to Measure Customer Effort Score

Again, this might be a difficult metric to come up with a single figure for, but you can get a decent idea of how high your customer effort score is with a survey or feedback form. If you do want to definitively quantify it, then ask customers to give a rating, or simply ask if they are satisfied or dissatisfied. 

15. Product Usage Rate

This applies to businesses who offer a service, most likely software as a service (SaaS), and is fairly straightforward: how frequently are customers using your service? How frequently are customers using individual aspects of your services? How long are they using those services for?

Decide on a time frame – a week, a month, a quarter – and simply measure all of those different metrics, keeping track of how they fluctuate over time. 

It’s obviously also important to measure monthly or daily active users, which is straightforward enough but be sure to decide what defines ‘active’. Does it simply mean visiting your pages? Does it mean time spent on those pages? Does it mean completing a task or interacting with your services in some way? Does it mean sharing content or recommending your services to someone else? 

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Whether you want to generate more leads and references, drive more customer success, or even improve future products through direct customer feedback, Influitive has got you covered. We’re ready when you are.