Haven’t found any articles or thoughts on this topic so I wanted to start up a thread on it. Interested to hear how others have communicated this internally, and how their companies view customer health when it comes to a customer actually renewing their contracts.
Almost all of our customers are on year-long contracts, and our pricetag is fairly high, so we tend to end up with almost exclusively high touch customers. We’ve been around for ~10 years, and have had a CS org for 8 of those. We defined our current health scores under a previous VP of CS and have had some new C level executives join right around that time, or after.
Our health scores are ‘inaccurate’ when it comes to predicting renewals. The CSMs aren’t managed to them, and they are often misinterpreted as a likelihood to renew. I’ve tried using the analogy of the hang gliding CEO to illustrate how we should be thinking about customer health, account risks, and how they relate to renewals.
Picture yourself as the doctor of a Silicon Valley CEO. The CEO brushes his/her teeth for a full 2 minutes, eats an organic diet, swims laps before work, runs in Golden Gate Park, and does yoga 3 times a week. Overall, very healthy when we are measuring BMI, blood pressure, etc… BUT, every few weeks, this CEO also likes to go hang gliding out at Fort Funston.
Translating this to customer health and risks, we have a very healthy (“Green”) customer, with an identified risk (which we know to be very risky). So the CEO’s likelihood to renew should be some blend of these things.
So, do you all try to bake this risk into the customer health score? Do your teams understand this difference, and how did you communicate it to them? Do you actually manage to your health scores, or are they just nice to look at?
How should all of this work?
Best answer by dan_ahrensView original