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14 April 2022

6 Tips To Creating A Proactive & Actionable Customer Scorecard

by Emily Ryan Reading time: 10 mins
customer scorecard

Shift From A Reactive To A Proactive Organizational Mindset

In leading B2B technology enterprises, the average Customer Success Manager (CSMs) juggles anywhere from 10 to 200 accounts at a time, making it difficult to focus their efforts on the most impactful customer retention initiatives. While customers who are at risk may eventually speak up, it’s often too late to prevent churn when they do. Rather than relying on reactive customer health indicators, you need to empower your team with an optimized customer health scorecard that displays strong, predictive indicators of success. 

Creating a customer scorecard is a business imperative for every recurring revenue organization – but it’s just the beginning. To continue to extract and apply the most up-to-date value-driving insights, you need to regularly optimize your scorecard with internal learnings and best practices. By successfully applying these principles, you can shift out of firefighting mode and into a predictive and proactive mindset that is critical to driving customer value throughout the customer journey.

In this article, we share 6 tried-and-tested tips to help you optimize your customer health scorecard to derive the most valuable Customer Intelligence insights that drive measurable customer value.

Tip 1: Focus On Actionable Insights

When organizations create a scoring methodology for their customers, they often focus on Business Intelligence or other internal metrics. Unfortunately, your customers don’t necessarily care about the same things you do.

When building an impactful customer scorecard, it’s critical to be mindful of these three concepts: 

  1. Not all data is important 
  2. Not all data drives insights
  3. Not all data that matters to you matters to your customers 

The most important consideration when selecting metrics for your customer scorecard is its actionable properties. Can your team actually do something about this data? If not, it will just sit on your scorecard as a vanity metric. For example, some Customer Success teams will track if a customer hasn’t paid their bill on time on their scorecard. While this can indicate risk, there isn’t much that your Customer Success Managers can do about it. Ultimately, this data isn’t helpful to your CSMs and should instead be sent as an alert to your Accounts Receivables team, the folks that can take true action on this data. Inapplicable insights like this can quickly lead to an overloaded scorecard that is difficult for your CSMs to interpret and therefore derive meaningful insights from.  

To make your customer scorecard as valuable as possible for your team, ask yourself the following questions before selecting a metric to include:

  • What does this data point tell me about my customers?
  • Is it actionable? Can my team impact this metric?
  • Do we need more than one data point working in concert to drive an actionable insight?

Tip 2: Streamline Your Customer Scorecard By Removing Insignificant Metrics

Many organizations suffer from a ‘more is better’ mentality. When it comes to data, it’s important to acknowledge that less is more. An important practice when optimizing your scorecard is to remove any unnecessary or unhelpful data points. Carefully review your customer scorecard and evaluate whether a data point can definitively tell you if a customer is likely to renew and expand or if they are more likely to churn. If the metric doesn’t help indicate either, it’s probably not the right metric for your customer scorecard. 

Failure to remove inconsequential data results in a bloated scorecard that will make analyzing data and deriving actionable insights a much more taxing and time consuming exercise for your team. By transitioning to a targeted and value-driven scorecard, you will be able to move the needle more effectively and efficiently within your organization. We recommend starting with a simple scorecard that consists of 3-5 data-driven customer insights that are immediately actionable by your Customer Success team. Don’t forget to iterate on this list over time as you continue to identify the most directionally relevant data for your customers.

Tip 3: Leverage Cross-Functional Data For A Holistic View Of Your Customers

Having tunnel vision when creating your customer health score program can blind you to important opportunities and potential risks that exist elsewhere in your ecosystem. To obtain a holistic view of your customers, you must leverage all of the rich customer data available across your organization.

Start by tapping into the following organizations, and their data, to gain valuable insights about your customers:

  • Support – Are your customers engaging with your Support team? What Support ticket types can you leverage for insights? Are there common issues or themes across your customer support tickets that require further involvement from your Support or Product teams? How can Support and Product access the scorecard to take appropriate action?
  • Marketing – Are your customers continuing to engage with Marketing content? Are they attending events? Are your customers open to and actively contributing case studies? How can Marketing access the scorecard to take appropriate action?
  • Education – Are your customers attending training courses? Do they come to webinars? How valuable do they find your educational content? How can the Education team access the scorecard to take appropriate action?

Obtaining answers to the questions from each department and their cross-functional data will help you glean deeper insight into what your customers see as value-driving activities. Equipped with this information, you can build out a more robust customer scorecard that proactively predicts how much value your customers will receive. As you start to evolve your scorecard, remember to integrate your customer lifecycle strategy and foster close collaboration across your organizational ecosystem through the proven ValueXperience framework

Tip 4: Ensure Easy & Equitable Access To Your Scorecard For The Greatest Impact

Traditionally, CSMs are held accountable for your scorecard metrics; is the customer red or green? How happy are they with your product and services? But, can your CSMs directly and independently impact every single insight in your scorecard? And does the team that can actually take on action the specific insights have unfettered access to the scorecard?

Here’s an example of how this might unfold. Let’s imagine that one of your customers has a lot of support tickets and you instinctively decide that the Support team is fully accountable for that. If there is a high volume of tickets, you may be overlooking two other teams that need to get involved: your Education and Product teams. In this case, does your Education team understand how to engage with the Support organization to mitigate the issue? Similarly, is there an issue with your product? Is it just one customer that is experiencing this particular problem or is it prevalent across many customers? Can both teams access the customer scorecard to identify and take action on these insights? 

In a nutshell, the valuable information you gather isn’t relevant to your CS organization alone. Many of your cross-functional and customer-facing teams also have a direct impact on the insights you’re tracking; to make the most of your actionable scorecard, these teams should also have access to this information so that they can provide their expertise and contribute to the solutions you prescribe to your customers. To ensure this is put into practice, we suggest you go a step further and incentivize your cross-functional teams to collaborate on driving better customer health scores together.

Tip 5: Reduce Your Team’s Cognitive Load

To create a high-impact customer scorecard, you should structure it in a way that reduces your team’s cognitive load as much as possible. Essentially, you want to minimize the amount of energy your CSMs must expend to interpret the data and formulate actionable insights. Two pervasive practices that increase cognitive load include dashboards containing only tables of data and scoring systems with non-intuitive color schemes.

Using tables of data to present your scorecard is a surefire way to overwhelm your CSMs and inundate them with difficult-to-interpret information. Consequently, they may forgo referencing this data entirely. Another common mistake is deviating from the universally recognized ‘red, yellow, green’ scoring system. While using your brand colors may be aesthetically pleasing, it will cost your team members extra time and energy to interpret what purple, orange or your other brand colors mean. These two common mistakes should be avoided at all costs. 

On the other hand, there are many practices that help reduce your team’s cognitive load so that they can effectively and efficiently leverage your scorecard and take immediate action with your customers. Displaying your data points visually through charts or graphs helps your CSMs observe trends and spot patterns over time, such as score improvement over time. To make this data easier to interpret, meld it with your color-coded scoring system so that CSMs can effortlessly determine if that trend data is positive, requiring no immediate action, or negative, necessitating further investigation. 

Take your customer scorecard to the next level by supplementing it with insights and actionable details. For example, if a particular customer’s product usage insight is red, your CSM has to take the extra step of determining what that actually means by looking at your scoring rubric, possibly talking to your customer and then evaluating all possible options. This ends up costing your CSMs time and effort. Instead, reduce their cognitive load further by including details about what is driving the score directly in your scorecard. To really move the needle, you can also design automatic notifications that prompt your CSMs to take action on a particular customer, or on a series of red alerts, so that they can get ahead of any issues. We recommend approaching this through exception-based notifications whenever possible.

Tip 6: Foster An Open Culture Around Your Data To Get An Accurate Picture Of Customer Health

Ultimately, all your efforts to create an actionable customer scorecard are futile unless you foster the right data mindset. You need to create a culture where red is seen as a positive because it represents an opportunity to learn, iterate and plan. If folks on your team are fearful of blame or repercussions because of negative scores, you increase the risk of “greenwashing”, which is detrimental to your customers and your business. 

To further mitigate the risk of “greenwashing”, we highly recommend against compensating your team based on qualitative data. While people are well intentioned, they may lie if they are incentivized to do so. Don’t give people the option of hiding issues and problems, thereby “greenwashing” their scores, by tying their compensation to qualitative metrics. Ultimately, it won’t provide you with the data that you need to accurately determine customer health and derive proactive insights to address any issues or opportunities. 

For a deeper dive into creating and maintaining high-value customer scorecards, watch the Developing A Scalable Customer Health Scoring Strategy episode of our LinkedIn Live series; On CS Ops, A Conversation With Emily Ryan. 

Power Your Performance With Predictive & Proactive Insights

Customer Success Managers have some of the most important responsibilities in a B2B technology organization – customer onboarding and adoption, identifying expansion opportunities, preventing churn and delivering customer value. These duties are needlessly burdensome and expensive without a predictive customer scorecard that proactively measures a customer’s health. By equipping your teams with the most relevant and actionable customer insights, you can simultaneously reduce their cognitive load while increasing their value-driving capabilities for your customers and throughout your organization. 

A thorough understanding of your customers is fundamental to creating an impactful customer health scorecard. Follow these 5 critical steps to scaling a powerful Voice of Customer program that provides unprecedented insights into your customers and accelerates data-driven value delivery. 

Emily Ryan

Emily has nearly 15 years’ experience coordinating teams across Sales, Post-Sales and Product/Delivery to ensure successful customer interactions. Her unique expertise applying Customer Success Strategy to effectively establish, analyze and scale great customer-centric teams means her impact is not only to corporate revenue and retention, but to the health and productivity of the teams she empowers.