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Why your customer health scores aren’t actionable for predicting retention

Why your customer health scores aren’t actionable for predicting retention

Key considerations for companies seeking a more predictive model to assess customer health

Key takeaways

  • Customer success functions, and the account health scores they create, are in the spotlight.
  • Health scores often focus on what is easy to measure, not what provides actionable insight into accounts.
  • Tech companies looking to use health scores to guide their decisions need to build that data on a more solid foundation.

Health scores should be derived from a balance of qualitative and quantitative data

In a subscription economy, the revenue focus of many technology companies has shifted from closing new deals to renewing subscription contracts and expanding sales among existing customers in order to continually grow accounts. Understanding how likely an account is to renew has become a core focus of company financials, making customer retention a hot topic. As a result, customer success functions, and the account health scores they create, are in the spotlight.

As these customer health scores become increasingly strategic, many companies are realizing their current approach to calculating them leaves a lot to be desired—that was the topic of a recent Technology & Services Industry Association webinar sponsored by RSM US LLP. Health scores often focus on what is easy to measure, not what provides actionable insight into accounts, according to the TSIA, which has developed benchmarks to help tech companies more accurately measure customer health.

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