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These 5 Metrics Will Tell You If a Customer Is Actually Satisfied

On the surface, she might sound like a success story. But consider another explanation: She’s a busy professional, led by a supervisor who wants the latest technology but doesn’t use it herself. She could be getting more value from the tool, but she sticks with her old method because it’s familiar. She stays quiet while the company pays full price for a partially leveraged product.

The average enterprise now uses around 1,000 cloud software applications. Meanwhile, workers’ stress levels are rising as they adjust to the digital workplace. It’s easy to see why some users’ frustrations fly under the radar.

Metrics tell the truth

Happy customers aren’t always what they seem. To tell whether a customer is actually making the most of your application, monitor:

1. Session frequency

If any metric can predict whether a user stays, it’s how often she logs in. There’s a slim chance that someone who uses a product multiple times per day will abandon it. If those logins suddenly drop off, however, it’s a good sign that the customer’s needs have changed.

Recently, I reviewed how much my company was spending on SaaS tools. I was spending 5 percent of my revenue on these tools to run the business. I consider many frequently used applications to be the backbone of my business. Some, however, weren’t being used, and I subsequently canceled them. This exercise caused me to think about reducing customer churn.

How often should users be logging in? That answer depends on the product and user in question. Help desk software Groove, for instance, notes that its sessions per day vary depending on whether the customer is a support representative or executive. Although its benchmark is two uses per day, software like an employee-facing HR tool may find once-per-pay-period use to be standard.

2. Session duration

What does it tell you if a customer whose sessions were once 30 minutes or more starts logging in and out quickly? One of two things has changed: The customer is frustrated with the tool, or he’s found he only needs one specific feature.

Because short and long sessions can significantly skew the average session length, customer onboarding tool Userlane suggests measuring this metric as a median rather than a mean. Userlane compares this value among churned and retained customers to better understand which features and product updates promote engagement.

3. Net promoter score

Net promoter score may be the most critical customer success metric for growth-focused companies, according to customer success platform Gainsight and Forrester Consulting. In short, NPS measures existing customers’ loyalty and willingness to recommend a product to their peers. Users are then classified as promoters, neutral, or detractors based on where they fall on the test’s typical zero-to-ten scale.

To calculate your company’s NPS, set up a survey. Gainsight offers users a range of templates customized by business process and industry and provides a free online calculator to crunch the data you receive. Although it’s critical to establish your own benchmark, scores of 20 or above are considered favorable, while 50 to 80 is outstanding. 

4. Marketing participation

The frequency and depth with which a customer engages with your marketing tells you a lot about her: Does she open your marketing emails? Has she volunteered for case studies? Does she take advantage of your social media promotions?

Although engagement with marketing is a positive sign, not every marketing-averse customer is about to leave. In most industries, in fact, fewer than one in five recipients opens marketing emails; that doesn’t mean, however, that four in five are dissatisfied. Keep in mind, too, that privacy-focused users might simply not want to use social networks or share their situation with others.

5. Assessment of recent interactions

Although this is subjective, it’s a canary in the proverbial coal mine. Before a customer’s dissatisfaction shows in her usage habits or NPS survey, it often crops up in her communications with customer success.

Encourage staff to speak up when something seems “off” with a customer. Researchers at Tel Aviv University’s School of Psychological Sciences found when asked to choose between two options — say, whether a customer will stay or leave — study participants made the right call up to 90 percent of the time. Follow up with the customer after an unusually curt email or guarded response. Although the culprit could be the customer’s life circumstances, simply checking in shows goodwill and fosters trust.

Customers can be fickle and unpredictable, but data doesn’t lie. If a “happy” customer stops regularly using a product, submits a poor NPS score, or declines multiple marketing opportunities, consider the relationship across multiple metrics. You’re more likely to get the true story.

This article is from Inc.com