Customer Success is a Growth Engine. Investing in Customer Success-driven Growth is an efficient way to drive revenue and company valuation, and we need a metric that is designed to measure that growth. Introducing, Success Vector.
Customer Health Score is too much of a moment-in-time snapshot; a lagging indicator. We need something more forward-looking.
So, looking at Customer Success as a growth engine, we need a KPI that we can use to ensure we’re on track to meet the growth potential Customer Success will unlock.
Real Predictable Revenue
Every company wants predictable revenue, but most turn to new business Sales. But it doesn’t get more predictable than being able to look at your existing customers, say these 100 customers will reach this Success Milestone in the next month, that milestone has a logical upsell associated with it, the value of that upsell is $1000/ARR, and the percentage of customers that should take the upsell based on their Success Vector is 90%.
That means, for that cohort, we’ll add $90k/ARR next month. Then, by combining all of the milestone cohorts, we can give an accurate prediction of the revenue we’ll generate from our existing customers. Predictable Revenue.
But Customer Health Score – historically a Key Performance Indicator (KPI) for Customer Success – wasn’t going to give us what we need, so I went into my lab (probably a Starbucks or on an airplane) and tore the idea of a Customer Health Score apart with the sole purpose of giving us a real way to see not just what’s happening with our customers today, but where do we think they’re going in the future. And Success Vector was born.
To date, only my clients know about Success Vector as a Customer Success KPI… it’s time to let everyone in on it.
Let’s dig into Success Vector, shall we?