Customer Health Scores: Take A Temperature Check On Your Customers in 4 Simple Steps

A sales pitch is like courtship. It should promise the customer great things. But when they buy, it is your turn as a business to deliver and exceed expectations.

Businesses have mastered the art of sales, with numerous innovations and investments from old-school tactics to AI chatbots.

However, the best efforts should be during the delivery phase; give the customers reason to celebrate choosing you. Then the business will grow and customers will have higher lifetime values.

Customer lifetime value is a predictive metric that helps businesses estimate how much revenue they will earn from customers in their lifetime. To predict revenue from existing customers, you need to know if they are likely to keep buying from you.

In other words, you need to know how the relationship is from their perspective. Cue — customer health scores.

What are customer health scores?

You can predict the likelihood of returning and continual sales by finding out whether your customers are happy with the current product or service.

Customer health scores are not standard for all businesses. Each business considers its unique metrics to come up with its customer health scores.

For instance; e-commerce businesses look at factors such as order frequency. Educational institutions may look at metrics such as class attendance. Dining establishments might even consider volumes of leftovers as one of the indicators of customer health!

The importance of customer health scores

  • Customer health scores are essential to the creation of a retention strategy. Once you know if customers are likely to stick or not, you can plan to increase satisfaction and retention.
  • When you know customer health scores, you can predict expected revenues to a higher level of accuracy.
  • A deeper look into customer health metrics helps you know how to improve products/services and the customer experience. Such improvements can spur growth in revenues and market share.

If you’ve already spent a world of effort to acquire your customers, from prospecting customers to email outreach campaigns and onboarding, customer health scores can help you optimize your customer acquisition efforts.

Create a customer health scoring framework in 4 steps

1. Segment your Users

One of the things you should also consider is what segments would be relevant for your business.

In some businesses, customer tenure might be an indicator of customer happiness compared with those who have been customers for less than a year. In others, customer satisfaction can be measured by average order value or the number of new orders placed in a month.

So, before scoring customer health, divide your customers into subgroups based on factors such as:

  • Product type and tier (paid vs free)
  • Use of product
  • Stage in the customer lifecycle
  • Spending

If it sounds like a lot, don’t fret. There are many existing CRMs with segmentation capabilities in the market that can make this process as efficient as possible.

2. Create Personas

  • Gender
  • Size of company
  • Industry/niche
  • Location
  • Age

There are infinite criteria that you can use to segment customers. However, stick to a few segments that describe big but discrete subsets of your customer base.

Deciding on the customer segmentation criteria before identifying the customer health metrics is crucial. You need to have the relevant information on what’s important to these different customers to create metrics that speak to their well-being.

3. Define the Metrics

Factors and elements that contribute to customer health scores will focus on three main pillars:

  • Whether customers are getting value from the product/service.
  • Whether customers are having a positive experience in their interactions with your business.
  • Whether there are external factors that may cause the customer to stop using your product.

Key metrics that contribute to the customer health score focus on product usage and responses to surveys.

Product usage

If you run an e-commerce business, measure order frequency, order volumes, and participation in loyalty programs.

For those selling goods and services, tracking product usage is more complicated. You’ll rely more on surveys, product returns, and sales numbers to understand product usage.

Responses to surveys

Though surveys allow us to hear straight from the customers, they don’t provide perfect information. The key weakness of surveys is that people who participate are often those with more positive or negative experiences of products or services.

Before running surveys, set clear objectives and questions so that you receive data that makes sense. Surveys usually help a business to find out metrics such as:

customer health scores

Net promoter score (NPS)

1 being least likely to recommend (detractor) and 10 being most likely to recommend (promoter). Then use the responses to calculate how many customers would promote you and how strongly they would do it. That is the NPS metric.

customer health scores

Customer satisfaction score (CSAT)

You can send a simple question such as, ‘how satisfied are you with the product/service?’ Then give respondents a score of 1 to 10 to choose from. Another approach is to create a survey with multiple choices ranging from the spectrum of dissatisfied to highly satisfied.

A visual survey is also effective, as done by NiceReply.

Then measure the percentage of those who are satisfied and highly satisfied to get the CSAT.

customer health scores

Customer effort score (CES)

Responses can be in the form of emojis. Then the customer can respond by choosing an answer that corresponds with how easy it was.

While most survey questions can give you the aggregated data, you need to ultimately dig deeper to understand why if you want to make a difference.

While it may seem overwhelming, there are many tools out there that can help. As an example, Nicereply comes with a dashboard to give you at-a-glance monitoring of key customer health metrics with trends over time. This will help greatly in giving you the bigger picture, further identifying any issues, and seeing whether changes made have been effective.

Other contributors to customer health scores

External factors

Also, some industries and businesses are getting obsolete with time. For instance, movie rental businesses have slowly been replaced by online streaming services.


After customer interactions, you can send in signature email surveys to find out if the customer was satisfied:



4. Calculate the customer health scores


Once you have health scores categorize customers into 3 groups:

  • At-risk
  • Ok
  • Healthy

Armed with this information, you can then proactively work to retain and maintain the health of your customers. This will also allow you to create robust retention plans and grow your revenue sustainably.

Plan and take action

For instance, slow product adoption can be combated by better customer education.

You can reinforce customer education in different ways online including in-app mini-tutorials, and videos. To complement these, you can send behavior-triggered automated emails based on tasks they fail to do or features they seem to ignore. Other measures can include:

  • Improving customer support
  • Optimizing onboarding processes
  • Customer and team education
  • Streamlining marketing and communications

The health of your customers starts with you

Similarly, this principle should be applied to your customer’s health. Don’t wait until they’re in critical conditions before trying to salvage it. Just like any relationship, work needs to be put in, and as you’ve read, it only takes 4 simple steps.

And of course, like all lasting romance, the courtship with your customers should never end.



Improve your #custserv & #custexp with Nicereply - a customer satisfaction survey software, including CSAT, NPS & CES 2.0

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Improve your #custserv & #custexp with Nicereply - a customer satisfaction survey software, including CSAT, NPS & CES 2.0