Archive | 2014

How Can You Tell If Your Customer Health Score Is Working?

Segmenting Customers by HealthScore

Most of us are familiar with the idea of a customer health score, especially in the subscription economy. But what’s the payback from that score? And how do you determine it? The predictive lift of a health score—i.e., its predictive performance measured against random choice—is the key to understanding payback. If the predictive lift is high and actionable, the score has good economic value—because you’ll use it to apply resources to priorities that impact revenue retention and growth. But if the predictive lift of a health score is low, its economic value is low—because acting on the score is only slightly better than random or “gut-based” customer interaction. So how do you measure economic value of your customer health scoring? […]

Why One-Size-Fits-All Annual Price Increases Don’t Work

Value-based Pricing Best for Renewals

In the subscription economy, cost of delivery matters in setting prices, but the factor that’s quickly becoming dominant is value delivered. As described in the book B4B: How Technology and Big Data Are Reinventing the Customer-Supplier Relationship, customers increasingly want to pay for outcomes, or “realized value.”

How a Simple Three-question Survey Tripled the Activation Rate of “No-Show” Users

Reactivation Through User Nurturing

User nurturing can have a big positive impact on both adoption and customer success, as we’ve discussed in earlier research alerts. But user nurturing can also be critical to retention. Like so many customer dynamics, churn starts gradually—and if left unnoticed, it can develop into issues that are impossible to resolve. Assuming you’ve been able to achieve your implementation and adoption milestones, any customer and revenue churn usually starts with user churn. User churn (i.e., loss of users) is when individuals start to drift away from using your solution. At renewal time, this drop in usage results in seat churn (i.e., loss of quantity on renewal), which is the first loss of revenue. Ultimately, further usage drops can result in […]

User Nurturing with a Twist—and Why It’s Critical to Customer Success

In a perfect world, we’d like to see all provisioned users become loyal users—but the reality is that even getting a majority of users to adopt (let alone become loyal users) can be a struggle. At the same time, reaching majority adoption is critical to renewing a customer. So how do you tackle this adoption challenge? Through user nurturing. You need to make sure that every user is contacted at the critical stages in your onboarding process—with training, best practices, and (of course) reminders. In fact, even a simple login reminder can have a significant impact on adoption. But you can do even more. Consider the situation of one SaaS company from our data. The company defined users into three […]