KPIs are a medium to gain insights into a company’s health. Analyzing performance indicators aids efficient resource allocation and prioritization of critical areas in the customer success process. Indicators typically fall under two groupings: leading vs. lagging and performance vs. risk indicators. An example of a performance metric includes an increase in users, and the number of support cases makes for a risk metric. Higher scores in performance metrics indicate an improving trend, whereas higher scores in risk metrics mean a declining movement.
Indicators have thresholds designated to notify managers when values fluctuate above or below a specific limit. In addition, customer success platforms are equipped with automation features to notify managers to prepare and take corrective actions for any undesired outcomes.
Observing the trends in a broad context of events is essential rather than evaluating each metric in isolation. For example, an increase in the number of support cases may signify the deteriorating quality of software (if there is no growth in the number of users). In contrast, the same number of support cases may not be a matter of concern if the number of users has increased.
Analyzing leading indicators can help predict events in advance. Leading indicators can highlight critical issues like a gradual dip in weekly user logins over a period, a warning that users may not consider renewing their software license agreement in the future. Lagging indicators help you straightforwardly understand company health. For example, a dip in revenue is a lagging indicator and explicitly conveys the company’s performance. Leading indicators are of more use to managers as it gives insights into what could happen in the future, subsequently helping in the timely implementation of corrective actions.
Red flags to watch out for in customer success
Customer success professionals must keep an eye on the red flags along with the KPIs mentioned above. These red flags can cause severe problems, and hence managers must analyze them at every level of customer interaction.
Wrapping up
KPIs say a lot about your customer success process. But organizations need skilled analysts to decipher their ‘code.’ Having a qualified analyst on board can help you understand the KPIs within the context of your current business situation, predict potential flaws, and nip them in the bud.