Overall percentage of Red & Yellow accounts

  • 15 July 2016
  • 2 replies

We are looking for guidance on what best in class CS teams have in terms of percentage of accounts that can be in red/yellow (either by # or by ARR $). Does anyone have any ideas on best practices or guidance? Obviously this will be different on how you define red/yellow, but we're looking for a ballpark figure on what is a reasonable amount of escalations to be had at any given time.


2 replies

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As a way to help answer your question, we encourage Gainsight customers to think of the health score as an indication of the overall health - and generally, the likelihood that they will renew vs. end up churning. The goal is to be able to prioritize efforts around customers in poor health (and especially those with poor health AND upcoming renewals) and the health scoring provides dimensions of visibility into that. 

It's also important that your validity of health scoring be as accurate as possible. In other words, of customers that churn, the majority of them should be customers that were in poor health, as defined by the health score. If you have a lot of Green customers churning out in relation to other colors, then that usually is indicative of health scoring that is not properly aligned with actuals.

So tying all of that together, if you wanted to assess where your health scoring cohorts should fall, it would ideally be close to the benchmarks for churn and retention for your industry and vertical. And hopefully with the enhanced visibility, Calls to Action driven by intelligent automation and a properly managed risk framework (using Gainsight) you are able to drive more customers out of red/yellow and into green - which then should be reflected in your Customer Retention numbers.

Hope this helps.
As you know it all depends on many different factors. Our red accounts are at risk of churning but many of them fall out of red after certain milestones have been hit which is normal for us. If the milestones are not hit after a certain time, then they will stay red and that's dangerous for us. I guess we could think about having an orange color to distinguish the difference but for now, it's red. Our policy is 20% or less in the red at any given time overall. We look at numbers of accounts but also look at the percentage of red for each segment to account for the MRR/ARR. Our SMBs are usually the highest and Enterprise/Strategic accounts the lowest for an average of 20% across the board. Over time, we are striving to bring this number down to 15% and even 10% but this is where we are starting. Hope that helps.