Originally published on inSided.com on August 20, 2021.

New week, new knowledge! It’s time for another post in our series, This is Digital Customer Success, where we set out to get clarity on all things Digital CS. In our last post, we talked about creating a “one-step journey.” This week, it’s time to talk more about how to measure your digital-led program. Because no matter what channels you have in place, you’ll have data to guide you. So let’s make sure we’re looking at the right numbers!

Digital Customer Success is all about data. Your ability to succeed will be determined by your ability to leverage your customer data in a scalable manner. As you build out your digital-led program, you’ll likely have plenty of data points to tell you if you’re on the right track. Once again, it’s time for Customer Success to borrow from marketing. Because while the end game is, as always, positive Net Revenue Retention (NRR), it’s the metrics that will get you to that point you’ll need to look at first.

Let’s look at how your digital-led metrics differ from your usual suspects.

Identifying your KPIs

Identifying your KPIs starts with defining your lagging and leading indicators. But when it comes to digital-led, this might look a little different from what we’re used to seeing. So before we get into that, let’s revisit the basics.

Leading indicators

Leading indicators are the metrics that measure immediate change. They’re clear indicators telling you whether or not you’re going to achieve your goals.

Leading indicators for SaaS companies typically include:

• Number of proactive outreaches per day
• Satisfaction ratings after contacts
• Upsell and cross-sell attempts
• CSM-identified customer health scores
• Customer engagement measures
• License utilization

Identifying the right lead indicators looks different for every company and can be a challenge. It’s a good idea to look at your lagging indicators and work backward. Look at existing data points that lead up to User Churn and try to identify trends.

But it can also be as simple as looking at customer behavior across the channels you’re already using. Call them signals. Let’s say you’ve built a new webinar strategy, the one clear thing that will tell you whether or not it’s working is attendance. And if that isn’t enough, you could look at people engaging around the webinar or the topic on your customer community.

Don’t have enough data or don’t have immediate access to the data you need? No problem.  This is why we always advocate for partnering with other teams to help you out. In this case, it probably makes the most sense to partner with your Product and Customer Marketing teams. Get them involved to strengthen your program, and to make the analysis of results easier.

Finally: the best way of getting data is by simply getting started. Eventually, the data will show you the way.

Lagging indicators

Lagging indicators tell you what has already happened, but it takes a while to actually see the change to this data. You can’t impact these metrics directly, but you can learn from them retrospectively.

In SaaS, lagging indicators are typically:

• User/logo churn
• Revenue churn
• Net Revenue Retention (NRR)
• Number of customer referrals
• Average revenue per customer

Yup, these are the big ones. The ones that your digital-led program will contribute to in the long run. But in order to do so, you need to identify the activities and metrics that (eventually) can be attributed to those.

So where do you start? As always, it begins with the customer journey.

Your customer journey milestones dictate your KPIs

Your customer journey milestones are the key to identifying your KPIs for your digital-led program. Because once you know what they are, you can assess what data points you need to track against those milestones.

For example, during the onboarding phase, the bigger questions you’d want to answer are probably:

• How quickly are we onboarding customers? (Can we do it faster?)
• How good are we at onboarding customers? (Can we do it better?)
• How soon do customers see value from our solution(s)? (Can we help them see value faster?)

But within those sits other questions such as:

• Are we reaching the right contacts?
• Are we using the right channels?
• Are we reaching out at the right time?
• How effective is the content we’re using? (Do customers take the actions we want?)
• Are we using the best format? (Can/should the content be delivered in other or multiple formats?)

The ultimate question you want to answer is how fast was the Time to Value (TTV) during onboarding? 

Next, during the adoption phase, you’d want to know:

• Are customers successful in using the product? (Are they achieving desired outcomes? Hopefully, the ones you’ve written down in their Success Plan.)
• Are customers using key product features? (Do they understand the value of the features?)
• Are they utilizing all of the features they paid for?

When you mapped out your customer journey, you identified key product behaviors that you hypothesized will make customers successful with your product. And even if you haven’t crunched the numbers before, you probably still have a good idea of what customers are doing well and where they are getting the most value.

So the question then becomes, what exactly should your Digital CSM (or whoever is responsible for your digital-led program) look at when they log in every morning?

Your digital-led KPIs: Reach, Effect, ROI

In a digital-led approach, your KPIs can be split into three main categories that represent a simplified customer journey.

The first two categories are leading indicators, whereas the third is a lagging indicator.

1. Reach: Did I manage to identify and reach the right contacts? (Leading indicator)
2. Effect: Did I manage to make them do what I wanted them to do? (Leading indicator)
3. ROI: Was the outcome what we wanted it to be? (Lagging indicator)

The ROI is the most important category. However, the KPIs defined in the other two categories will be used to arrive at the ROI.

Simply demonstrated:

The VP of Marketing (Reach) adopted feature x [Effect] and decided to add 3 more seats to their plan (ROI).

Let’s dive a bit deeper into each category.

Category 1: Reach – Leading indicator

It’s all about getting your message in front of the right people. That’s why your first KPI should answer the question: Did I manage to identify the right contacts? Depending on the type of product, its complexity, the number of seats, team roles, and so on, getting the right content to the right people might be easier said than done.

Reach is all about segmentation. Effective segmentation will save you a lot of time, and arguably, it’s the hardest part of the job (ask any marketer). Except that here, unlike marketing, you have your contacts in front of you already. It’s just a matter of who should get what content.

So what do you want to segment by? It should come as no surprise: behavior.

You want to make sure that your customers are getting closer to the customer journey milestones. You’ll track this against the key product behaviors you’ve mapped out. But it’s not just about product usage, you also want to track these people across your knowledge base and customer community to better understand what content they’re consuming.

For example, if your customer is in the onboarding phase but still haven’t started using certain key features, perhaps a video tutorial along with a login prompt is a good idea. But you’ll also want to look at the job and user role specific people have within the product as everyone might not be the primary user.

This will take some time and (undoubtedly) trial and error to figure out, but that’s simply part of the process.

Category 2: Effect – Leading indicator

Your effect metrics come in many shapes and sizes and depend on where your customer is in their journey with your product.

For example, during onboarding you’d want to look at:

• Did the customers attend training sessions and webinars?
• Did they access your knowledge base?
• Were they active in your customer community? And if so, how did they get there?
• What content were they consuming?
• Did the content achieve the desired outcome?

This is where you want to look at both engagement metrics and product usage metrics to answer questions such as:

• Can your customers easily find your content? (Pageviews, interactions per visit)
• Are your customers consuming your content? (Time spent on page, % exit, scroll depth, content downloads)
• Is your content perceived as valuable? (Video views, drop-offs, and interactions, webinar signup, attendance, and drop-off rates)
• Does your content achieve the desired outcomes? (Product logins, feature usage, actions, revenue)

Define your effect metrics based on your unique customer journey milestones, they will also be unique to the tools and types of content you’re using. And if analysis paralysis hits, take a step back and focus on the data points of one thing you want your customers to achieve in their journey.

Category 3: ROI – Lagging indicator

This is the moment of truth. If you’ve pinned down the right contacts and delivered the right content, this is when you reap the rewards. That reward can be anything from:

• Increased logins
• Increased product usage
• Feature adoption
• Added integrations
• Upgraded user permissions
• Increased revenue (added seats, plan upgrades, renewals)

These should always be tied to a specific period of time, if they’re not it can be more difficult to identify the specific actions that attributed to those outcomes.

Ultimately, these are the metrics that eventually will contribute to the big fish mentioned at the beginning, like trial-to-paid conversions, average revenue per customer, and eventually – increased Net Revenue Retention (NRR).

Clarity above all

It’s easy to go down the path of looking at too much data. You need to be clear in what you’re looking for and what you want to achieve. That’s where it starts. Identifying and categorizing your KPIs will help you stay focused and on track.

And remember, there is no one north star metric in the land of digital-led. The key metrics are the ones that drive your decisions and get you closer to your milestones. The task of the KPIs in each category is to help you create context around what’s happening in the customer journey, ultimately allowing you to serve your customers better and create more value by delivering what they need – when they need it.

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