Archive | August, 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? […]