Subscription Business Best Practices: Leveraging Customer Health Scores

Recently, I wrote about how to develop a customer health score to improve your subscription business renewals. Creating health score data is not enough. Businesses that succeed with their subscription offerings know how to best decode and leverage that data to improve customer service and retention.

Most customer health scores incorporate a visual status system between green, yellow and red markers. Now that you are on your way to having all the right customer insights, let’s explore how you use that information into the future.

Decoding Health Scores

The common green, yellow and red indicators should be noted as just that: an indication of what you might expect. These health scores are not a definitive state of affairs. In all cases, further investigation is advised before taking big actions.

  • Green is the best-case scenario and means, based on the elements used to calculate the score, things look positive with your customer. Additionally, they are worthy of an exploratory conversation regarding expanding usage or products with you.Why should you not assume all is good? Even if usage is good, the product works and all things point to a renewal, other unknown business factors could be at play. What if the company was recently acquired and the champion will soon find a new solution to replace your solution? It happens, as do a number of other factors that are all impossible to take into consideration. So do not assume the green indicator equals an actual renewal sale.
  • Yellow is not a bad but cautionary indicator. When your customer scores yellow, your sales or customer support team should most likely outreach and explore how to improve value. Having a touchpoint and re-engaging the customer is one of the easiest ways to keep tabs on the situation and avoid your customer falling into the red zone.
  • Red indicates things are not looking great between you and your customer. The best bet is to group these and get involved in the discussions with your customer success managers and sales professionals to understand the game plan to turn these potential churn customers into renewing happy customers. The battle might be tough, but it should not be considered lost.

It is important to fully understand how to overcome health score assumptions, especially in regard to yellow or red scores. While health scores are important tips to your team — they require further investigation and nuanced consideration before action is taken.

For example, consider a customer that has a number of support tickets opened in the past six months. Depending on the weighting of these tickets in your overall health score criteria, this might seem negative and lead you to assume this customer is not happy. Yet, what if these tickets are just an indicator of a very active rollout and increase in adoption? Customer satisfaction oftentimes will relate more to how you respond to support causes than the actual number of them.

So understanding the sentiment from the support team becomes a critical element in truly understanding these statuses.

Using Health Scores

The use of a health score can be broken down into four steps. The steps essentially help you develop an informed and strategic action plan.

Leverage the data-driven insights you have collected from your customer data insights dashboard, discussions and other data sources to:

  1. Identify the current status. Do the indicators point to an at-risk renewal, a customer that needs attention or a potential for expansion?
  2. Review your findings with your company’s renewal team (sales, CSMs, product teams).
  3. Discuss risk mitigation steps, if needed, and who will own them.
  4. And lastly, when appropriate, based on prior steps, reach out to your customer, confirm budget, timeline, correct contacts and the intent for the continued partnership.

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