How to Measure Customer Success: The Essential Metrics

Customer success is a relatively new term, but the concept has been around for a long time. In its simplest form, customer success is about ensuring that your customers achieve their desired outcomes. 

This can be anything from acquiring more customers to increasing revenue, to improving customer satisfaction or loyalty. While there are many ways to measure customer success, not all of them are essential. In this blog post, we will discuss the most important metrics that you should track to measure the success of your customers.

What are Customer Success Metrics?

Customer success metrics are the measures by which you track whether or not your customers are achieving their desired outcomes. Measuring your performance is important, but you need to be careful not to get bogged down in tracking too many metrics. 

The essential customer success metrics are those that will give you the most insights into whether or not your customers are achieving what they set out to do with your product or service. They provide you with essential feedback on what you should focus on with your product and how to increase customer satisfaction.

How to Measure Customer Success?

It really depends on what your definition of customer success is. If you want to measure whether or not your customers are acquiring more customers of their own, then you would track metrics like customer acquisition rate or customer lifetime value.

If you want to measure whether or not your customers are increasing revenue, then you would track metrics like customer churn rate or customer satisfaction score.  If you want to measure whether or not your customers are improving customer satisfaction or loyalty, then you would track metrics like customer engagement or Net Promoter Score.

No matter what metric you choose to track, the important thing is that you are able to take actionable steps to improve the success of your customers. If you're not sure where to start, then pick one or two of the essential metrics and start tracking them. As you get more comfortable, you can add more metrics to your tracking.

The Most Important Metrics for Customer Success

Net Promoter Score (NPS)

Net Promoter Score (NPS) is a metric used to measure customer loyalty and satisfaction. It is based on a simple question: how likely is it that you would recommend our company/product/service to a friend or colleague? 

The answer is given on a scale of 0-10, with 0 being extremely unlikely and 10 being extremely likely. Customers who answer 9 or 10 are considered 'promoters', while customers who answer 0-6 are considered 'detractors'. The NPS score is calculated by subtracting the percentage of detractors from the percentage of promoters. 



So, if 30% of respondents are promoters and 20% are detractors, the NPS score would be 10 (30-20). If NPS isn’t giving you the kind of metrics you need, it’s a good idea to look into NPS alternatives.

Customer Satisfaction Score

The Customer satisfaction score (CSAT) is a metric used to gauge how satisfied customers are with a company’s products or services. 

To calculate CSAT, customers are asked to rate their level of satisfaction on a scale of 1 to 5, with 5 being the highest rating. The scores are then averaged to create a customer satisfaction score for the company as a whole. 

The benefits of tracking customer satisfaction through CSAT scores are twofold. First, it provides valuable feedback from customers that can be used to shore up areas where they may be weak. Second, it gives companies an easy way to compare their level of customer satisfaction against their competitors and become more customer-centric

Customer Churn Rate

The churn rate, also known as the customer attrition rate is the percentage of customers who stop doing business with a company over a given period of time. It's a key metric for businesses to track because it can give them insights into customer satisfaction levels, overall engagement, and whether or not their marketing and retention efforts are working.



There are a few different ways to calculate the churn rate, but the most common is simply to take the number of customers who have left in a given time period and divide it by the total number of customers at the start of that period. So, if 100 customers leave in a month and you start with 1,000 customers, your churn rate for that month would be 10%.

Monthly Recurring Revenue

Monthly recurring revenue (MRR) measures the amount of revenue a company generates on a monthly basis. MRR can be calculated by multiplying the average customer account's monthly subscription fee by the number of active customer accounts.



For example, if a company has 100 customers with an average monthly subscription fee of $10, its MRR would be $1,000 ($10 x 100). MRR is often used as a proxy for customer lifetime value (CLV), as it provides a measure of how much revenue a company can expect to generate from each customer over time.

Customer Retention Cost

It is the cost incurred by a company to keep a customer, and it can be measured in terms of either money or effort.

Typically, customer retention costs are highest in the first year after a customer has been acquired, as companies need to put in extra effort to make sure the customers stay with them. After the first year, though, the cost of losing a customer usually goes down, as customers become more loyal and are less likely to switch to a competitor.

The goal of most businesses is to reduce customer retention costs by increasing customer loyalty and reducing churn. Loyal customers are more likely to buy from you again, so it's important to find ways to increase customer loyalty. 

Customer Health Score

The customer health score is a metric that measures how likely it is that a customer will continue to do business with a company. It's similar to the churn rate, but it takes into account other factors beyond just whether or not a customer has stopped being with you.

To calculate the customer health score, businesses typically look at factors like customer satisfaction, engagement, and product usage. They then assign a "health score" to each customer, with higher scores indicating that the customer is more likely to stick around.

Customer health scores are important because they can help businesses identify which customers are at risk of leaving so that they can take steps to keep them from churning.

First Contact Resolution Rate

The first contact resolution rate is the percentage of customers who have their issue resolved on the first contact with customer service. 


It's a measure of how effective customer service is at resolving issues, and it's important because it can impact customer satisfaction levels. To improve it, businesses need to make sure that their customer service representatives are trained properly and have the tools they need to resolve issues quickly.

Renewal Rate

The renewal rate is the percentage of customers who renew their subscription or contract with a company. It's a measure of customer satisfaction and loyalty, and it's important because it can impact a company's revenue. With a high renewal rate,  businesses can generate more revenue from their existing customer base, which can help them grow.

To improve the renewal rate, businesses need to focus on increasing customer satisfaction and loyalty. They can do this by ensuring that their products or services are meeting customer needs and providing excellent customer service.

Customer Lifetime Value

One of the most important customer success metrics is the customer lifetime value (LTV). LTV is a measure of how much revenue a customer will generate for a company over the course of their relationship. It's important because it can help businesses make decisions about where to invest their resources, as well as how much to spend on acquisition and retention.



Free Trial Conversion Rate

The free trial conversion rate is the percentage of people who sign up for a free trial that eventually become paying customers. It's important because it can impact a company's revenue, as well as its ability to acquire new customers.

To improve the free trial conversion rate, businesses need to focus on providing an excellent experience during the free trial period and make sure that the trial period is long enough to give customers a chance to try out the product or service.

Repeat Purchase Rate

The repeat purchase rate is the percentage of customers who make a second purchase from a company. It's important because it can impact customer loyalty and revenue.

Businesses need to focus on creating products or services that customers will want to buy again, and providing excellent customer service – without that,  customers are unlikely to come back.

Product Usage Rate

The product usage rate is the percentage of customers who are using a company's product or service. It's important because it can impact customer satisfaction and loyalty. If customers aren't using the product, they're likely to be less satisfied with it and more likely to churn. And that's what you don't want.

Average Time in the Platform

The average time in the platform is the amount of time that customers spend using your product or service. This metric is important because it allows you to see how engaged your customers are with your product. If the average time on the platform is low, it may be an indication that your customers are not finding value in your product.

Free Trial Conversion Rate

The free trial conversion rate is the percentage of people who sign up for a free trial of your product or service and then convert to paying customers. This metric is important because it allows you to see how effective your free trial is at converting customers. A high free trial conversion rate indicates that your product is appealing to customers and that they are finding value.

Final Thoughts

Customer success is essential for any business. By focusing on providing value to customers and ensuring that their needs are met, businesses can improve customer engagement and retention. Also, by measuring essential customer success metrics, businesses can identify areas of improvement and take steps to fix them.

If you’re looking for a great way to improve your customer success metrics, you should start with collecting and managing your customer feedback. Try FeedBear today to see how you can start collecting customer feedback and making your customers thrilled to be with you!

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