Customer success is quickly becoming one of the most powerful drivers of business growth.
Today, success teams have a far-reaching impact not just on customer satisfaction, but on long-term retention, growth, and even revenue. However, achieving meaningful customer retention requires knowing which analytics matter most. Businesses that focus on the right metrics are able to anticipate customer needs, prevent churn, and increase customer lifetime value, creating lasting success.
In this post, we'll go over the most important analytics customer success teams should prioritize to retain customers and grow their relationship with the brand. Each metric we discuss provides actionable data, helping companies optimize their strategies to create a genuinely loyal customer base.
The customer churn rate measures the percentage of customers who stop doing business with your company within a given period. This metric is foundational in customer success because it directly reflects customer retention challenges. A high churn rate often indicates underlying issues such as poor product-market fit, lack of customer engagement, or inadequate customer support.
To calculate churn rate, divide the number of customers lost during a period by the number of customers at the start, then multiply by 100. By keeping an eye on this metric, customer success teams can pinpoint trends in churn and intervene early when they notice signs of customers potentially leaving. Reducing churn rate by even a small margin can have a significant impact on overall revenue and growth.
Directly connected to churn, customer retention rate shows the percentage of customers a business retains over a set period. This metric is particularly helpful for understanding how well your company meets customer needs and delivers consistent value. It also highlights the effectiveness of your customer success efforts.
To calculate retention rate, subtract the number of customers gained during the period from the number of customers at the end of the period, then divide by the number of customers at the start of the period, and multiply by 100. A high retention rate usually signals a strong customer success strategy, while a low rate might reveal issues in customer satisfaction or engagement. Businesses that prioritize retention rate often experience a boost in customer loyalty, as retained customers are more likely to refer new business and provide consistent revenue streams.
Customer Lifetime Value estimates the total revenue a business can expect from a single customer account over the duration of the relationship. It’s a critical measure that helps customer success teams understand the long-term value of keeping a customer engaged. CLV connects the dots between customer retention and revenue growth, encouraging companies to invest in strategies that strengthen long-term relationships.
Calculate CLV by multiplying the average purchase value, purchase frequency, and customer lifespan. A higher CLV indicates that a company is effective in maximizing customer loyalty, while a lower CLV might suggest that customers aren’t engaging as frequently or staying as long as expected. By focusing on this metric, customer success teams can refine their strategies to enhance the overall customer experience and increase the likelihood of repeat business.
NPS measures customer loyalty by gauging how likely customers are to recommend a company to others. It’s calculated by asking customers to rate the likelihood of recommending your business on a scale of 0 to 10. Customers who rate 9 or 10 are considered promoters, 7 or 8 are passives, and 0 to 6 are detractors. Subtract the percentage of detractors from the percentage of promoters to calculate your NPS.
An increase in NPS usually signals growing customer satisfaction, while a decrease can indicate potential issues that need attention. Tracking NPS over time gives companies insight into overall customer sentiment and can be a leading indicator of churn. High NPS scores are also strongly correlated with customer advocacy, where customers actively promote your brand, bringing in more business and reducing acquisition costs.
Customer Health Score is a predictive metric that evaluates the overall “health” or stability of a customer’s relationship with your business. It’s typically calculated by assigning scores based on factors like usage frequency, customer satisfaction, engagement levels, and product adoption.
Customer Health Score enables customer success teams to identify high-risk customers early and take proactive measures to retain them. Customers with lower scores may need additional support, while those with high scores may be ripe for upselling or cross-selling opportunities. By monitoring CHS, companies can prioritize resources to provide a higher level of care to at-risk accounts, boosting overall retention.
Time-to-Value measures the period between a customer’s initial purchase and the moment they first realize value from the product. This metric helps determine how quickly your company delivers on its promise. Customers who experience value faster are less likely to churn, as they quickly see the product’s benefits and become engaged users.
Shorter TTV indicates an effective onboarding and product experience, while longer TTV might signal issues in user experience or product adoption. By optimizing TTV, businesses can improve customer satisfaction and retention rates. This metric is especially critical for customer success teams in SaaS or subscription-based models where onboarding has a significant impact on whether a customer sticks around.
Product Adoption Rate measures how quickly and extensively customers are using specific features or aspects of a product. It provides customer success teams with direct insights into what parts of the product are most useful and which may need improvement.
Calculate Product Adoption Rate by dividing the number of users actively using a feature by the total number of users, then multiply by 100. By tracking adoption rates for various features, businesses can better understand how well customers engage with the product and determine where they may need additional guidance or resources. High adoption rates can indicate strong product-market fit, while low rates might signal a need to enhance onboarding or provide better training resources.
Engagement Score, or Customer Engagement Index, is a composite score based on various engagement-related activities, such as frequency of logins, time spent on the platform, and interactions with customer support. Engagement scores help customer success teams determine if customers are active or disengaged.
High engagement scores are typically associated with lower churn rates, as engaged customers are more likely to stay loyal. By creating an engagement scorecard that reflects the most important touchpoints in your product or service, customer success teams can quickly spot disengaged users and target them with personalized re-engagement strategies to increase retention.
This is a less quantifiable but essential metric for customer success. Customer feedback through surveys, support tickets, and reviews can reveal pain points, product weaknesses, or areas that need improvement. Gathering and analyzing feedback allows teams to make data-driven adjustments that increase customer satisfaction and retention.
By regularly checking feedback, companies can stay tuned to customer needs and expectations. It also creates a feedback loop, where customers feel heard, which is essential for loyalty. Platforms like Rediem can play a significant role here by providing an integrated feedback system that allows brands to gather, analyze, and act on customer input efficiently, strengthening the overall customer experience.
Expansion Revenue refers to additional revenue generated from existing customers, typically through upsells, cross-sells, or upgrades. This metric shows how effective customer success teams are in nurturing and growing relationships, rather than just maintaining them.
To calculate expansion revenue, divide the revenue generated from upsells and cross-sells by the total revenue at the start of the period, then multiply by 100. By tracking expansion revenue, customer success teams can identify high-value customers who may be interested in additional offerings, creating a more engaged and invested customer base. Growth through expansion revenue also indicates that customers are finding increasing value in your products or services.
Building a successful customer retention strategy requires more than just monitoring numbers. Each of these analytics provides a different perspective on customer behavior, loyalty, and satisfaction. By focusing on metrics like churn rate, customer health score, and product adoption rate, customer success teams can create targeted, actionable strategies that foster loyalty and drive retention.
With the right data in hand, companies can move beyond a one-size-fits-all approach to deliver more personalized experiences that resonate with their customers. Platforms like Rediem, designed to blend data analytics with customer engagement, can help businesses deepen relationships, reduce churn, and build a loyal customer community that advocates for the brand.
The true success of a customer success team lies in its ability to turn data into actionable insights—ones that not only reduce churn but build lasting loyalty and open doors for growth.
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