Any SaaS business needs to measure customer growth. Customer growth is part of customer success. Customer growth is basically the progress your customer is making with the product or service they signed up for. Some companies measure customer growth as the rise in revenue your existing customers have made in your company. Customer internal growth is important to companies so that they will know how the product or service works for them.
A good customer success programs need to incorporate customer growth as essential to deliver continuous support and value at every step. While there are many ways to measure customer success like NPS, customer retention rate, monthly revenue rate, and more, the ways to measure customer growth are limited.
What is customer growth?
Customer growth is the growth of the customer footprint in the company. So, if a customer has signed up for one product, how many products do they use now. Has it improved? Are they linking it? Is there an increase in cross-selling or selling other products or services that are related? Other ways to see customer growth include making sure that customers achieve the success they signed up with your product or service. Customer growth can occur at any stage in the customer journey.
How to Measure Customer Growth?
There are some important ways to measure customer growth. Customer growth is how the customer grows through company offerings. Here are some ways customer growth is measured by companies.
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Product Adoption
Once customers are onboard, they need to know the product very well. This is why customer education is recommended. It is necessary for them to know how to use the product and get used to it. It may take a long time if they do not receive the right help from the beginning. If the customer support team knows all the ways and has the necessary skills and training to help customers, the chances of product adoption are high. It is only after customers realize product potential that they will see the growth. This can be calculated as the ratio between daily active users and monthly active users.
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Brand Awareness
Customers get to know the brand very well in this part. When they know what the product means they will continue. Sometimes, we stick on to what we know. This is another factor that contributes to customer success. Customers need to know about the product in the fullest sense and understand how the brand stands out from the rest to be fully aware. Once brand awareness improves, the chances of customer retention are high.
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Customer Retention
Customer retention is when customers like your product and continue to derive value from the offerings. It is only with a customer experience that companies can retain customers. For any company, retaining customers is a priority, and only when customers truly grow, will they enable retention. Retention can mean different things for companies- starting from subscription increase to renewal and contract extensions. Churn rate means the number of customers unsubscribed divided by the total number of customers multiplied by 100.
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Brand Advocacy
If a customer is super satisfied with your customer services, the chances of recommending it to friends and family is high. This marks the culmination of efforts to improve customer retention as customers are not only continuing with the brand but also talking about it to others. If they add more customers, the chances of conversion into regular customers are more. This is also called the ‘Net Promoter Score’ or NPS to give companies a truthful idea of what customers think. NPS is the % of promoters minus the % of detractors.
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Expansion of Accounts
Another great way to understand and measure customer growth is if your customers are satisfied. If they are satisfied, there is a huge chance they further and increase business with the company. This can mean upselling, cross-selling, selling related services, or allied franchises sold by the company. The fact that they buy more can be interpreted as an interest in offerings and increase the credibility acquired during product usage.
Bottom Line:
Customer growth cannot always be in black and white. It is tough to quantify it and it evolves constantly. There is a need for a long term strategy to ensure customer growth. With metrics like NPS, MRR, and more, you can assess customer growth and know the proportionate growth in revenue. Measuring customer growth will prevent churn, anticipate losses, improve retention, and help companies analyze when they need to implement new strategies to propel growth. A great qualitative and quantitative approach to understanding customer growth is important for customer success. Customer growth can be understood differently, and it is important to know that the real measure of customer success is NPS, customer retention rate, and churn rate.
