Customer Loyalty


Customer loyalty and happiness have become key factors in winning the customer success game, as they are widely considered to be the most important tools in sales and marketing. A plan made to benefit your customers has two-fold advantages: it leads to customers’ gain and your business’s benefit as you eventually win customers’ loyalty. All businesses have a propensity to deliver a positive customer experience, but they are not sure how it’s going; customer success metrics help define that. This helps in positioning yourself as a customer-centric business whose products and services have a positive impact on customers’ daily lives. As a customer-centric business, your bent is to constantly provide value to customers by orienting your missions to their specific needs, but this is only half the story; you need to know where your efforts are going and how impactful they are. And that is where customer success metrics in SaaS help. In this blog, I will take you through eight very important customer metrics and guide you on how to calculate them.

Customer Health Score

As a customer-centric business, you need to go beyond the regular customer interactions through emails and phone calls and look at the bigger picture. The question is, are customers actually seeing value in your products and services? In order to determine the customer health score, you will have to ask these four questions: How frequently are your customers using your products? What is the impact of your products on your customers’ lives? How is it impacting their business? Has it managed to remove their pain points? Calculating customer health scores will result in customer success management and will ensure that your customers are not only surviving but thriving with your products and services. These are the inputs used in calculating the customer health score:

Net Promoter Score (NPS)

This top customer success metric answers how likely a customer is to recommend your business to other customers. The NPS is important because it gives both quantitative and qualitative information about your customers. In this method, participants are asked to rate their experience on a scale of 1 to 10. Once you have the score, you can find out what customers think about your business. Here, customers are classified as Promoters (9–10 ratings), Passives (7–8 ratings), and Detractors (0–6).

Churn Rate

You’ve got to keep it low; it indicates the percentage of customers who leave your service out of dissatisfaction or other reasons over a given time period and is a good indicator to measure customer success manager performance. Customer churn examples include subscription cancellation, account closure, contract non-renewal, and customers decisions to buy others’ products or services. To calculate the churn rate, you will have to quantify these events and determine what customer attrition means to you.

Average Revenue Per Account (ARPA)

As the name suggests, it is a measure of average revenue per customer or revenue generated per account calculated over a fixed time period, usually a month or year. It helps in calculating a company’s revenue and growth for each account and helps in classifying high- and low-value customers. It’s an important metric that helps manage customer success.

Customer Satisfaction Score (CSAT)

A customer satisfaction score indicates how satisfied a customer is with your product or service. Often, marketers use CSAT to determine how satisfied a customer is at key interaction times such as the purchase time, the onboarding time, the closure of a support ticket, or the email or telephone exchange time. Just like the NPS, to calculate CSAT, you will have to conduct a survey; however, do remember to conduct the survey right after customer interaction.

Customer Retention Cost (CRC)

This metric is different from the others in that it calculates cost in terms of money. The CRC is the total expense that a company has to bear in order to retain its existing customers. To calculate CRC, you will have to add all costs necessary for customer retention and engagement. It is an important metric that helps run customer success programs. CRC helps in smart business decision-making as it differentiates between the cost of retaining an existing customer and acquiring a new one.

Monthly Recurring Revenue (MRR)

Monthly recurring revenue is a normalized measure of what a business is expected to earn every month. With the help of this measure, you get a pulse on how much the number of customers or their spending has increased since they started their journey with you. You can compare two sets of MRRs generated over different time periods to calculate how much your customers’ revenue has increased over time. This metric is important for SaaS companies because they function on a pay-as-you-go model. Let’s go through this example of calculating MRR. If you have 22 customers and they pay $100 per month, then your MRR will be 22 X 100 = $2200.

Customer Lifetime Value (CLV)

Customer Lifetime Value (CLV) indicates the total revenue a business can expect from a particular customer account. It takes into account a customer’s revenue value and multiplies it by that customer’s expected lifespan. Business owners consider this metric very important as it helps them identify the most valuable customer segments. In general, research has shown that acquiring a new customer is five times more expensive than retaining one. Hence, it makes sense to look for ways to increase revenue from existing customers, and CLV helps you find the effectiveness of your efforts in this direction.


The metrics are a great way to uncover weaknesses and strengths; they give you a pulse on the success or failure of your marketing strategies. In this blog, I have taken you through eight very important customer success metrics. To calculate these metrics, you will have to use customer experience management software. Now that we are talking about customer success metrics, this looks like a good time for me to introduce you to a relevant customer success solution. The first and the one that is sufficient in itself for calculating all metrics is WovVXM, a cloud-based, unified, lightweight, and powerful software product from WovVTech, a business productivity software company. Congratulations, as after reading this blog, you are most likely to become a customer success company.