Imagine how great it would be to be able to predict your customers' behaviors. Yes, it may seem like an illusion, but it's already possible with the Customer Health Score.
This indicator measures the health of accounts and customers, in addition to helping companies develop retention and customer loyalty strategies.
By understanding the public, it becomes easier to solve their problems, which are sometimes hidden and masked within companies.
Do you know what the Customer Health Score and how to implement it to achieve good internal results?
Check out our post and learn more about this important topic!
What is the Customer Health Score?
The Customer Health Score (CHS) is an indicator of future customer behavior . Its function is to measure consumer health, being able to predict their actions and desires.
Using this metric, you can adapt customer service, address bottlenecks, and retain customers longer, avoiding the end of the service provided to each of them . This makes customer retention and loyalty more effective.
Customer health reflects the consumer's perception of a product or service—the value they see in the brand. Some questions indicate what consumers think about what's being offered:
- Is the customer satisfied with the purchase of the product or service?
- Would the customer do business with your company again?
- How satisfied are customers with the company?
- How is the product/service being used?
- Did the client expand their business after implementing your product/service?
- How often are calls to your support team received?
These are just a few examples of what can be measured and asked. Each company needs to have appropriate questions for its own scenario and consider each of its customers.
If your company already has customer experience indicators, such as NPS , CSAT or CES , you are already capturing customer perceptions and know a little more about them, right?
But don't stop there, after all, the Customer Health Score gives you the power to know even more, always thinking about the customer's future.
How to implement the Customer Health Score?
Every company's reality is different, and it's important to consider indicators based on each scenario. Therefore, it's important to use the three steps of the Customer Health Score and adapt them to as many different scenarios as possible.
The steps are called CWM – Categorize, Weight and Measure.
Categorize
To start your Customer Health Score, identify and categorize the main actions used in the company to retain customers .
Find out what actions bother customers, what makes them happy, what they consider essential, and what isn't as important to them.
Identify all possible categories and list those you consider most important and crucial to retaining or losing a customer. This will help you understand how your consumer perceives your brand and how you perceive them.
Weigh
Once the categories have been defined, it is necessary to know the weight of each one for customer retention and maintenance .
Each action will have different weights for each client, so it's important to understand and consider each of them and know which strategy to follow individually.
Each client is a different “patient”, so they need to be diagnosed individually, not in a generalized way.
Measure
Typically, customer health is measured on a scale of 0 to 100. It's also recommended to give customers colors, like those of a traffic light, to increase visual awareness of what's good or bad.
Once these measurements are taken, it is possible to understand what level the account or customer is at within the Customer Health Score:
- Between 0 and 50 – The customer is at risk, being a potential loss and a brand detractor.
- Between 51 and 70 – Health is at an average level, meaning more work needs to be done on each client to prevent them from reaching a risky situation.
- Between 71 and 100 – Health is good, and the customer is a potential brand promoter. It's worth investing in loyalty and delight initiatives.
Based on each client's results, you need to take action to ensure that your relationships with these consumers undergo real, positive changes.
Start by observing your customers calmly and accurately. You need to treat everyone equally, while being aware of each one's unique characteristics.
Once you understand, it's time to act! There's no point in knowing what the customer needs and doing nothing. That's the secret to the Customer Health Score. Take action to change the perceptions of everyone in your base and give them reasons to stay with you and see a relationship of trust.
Always manage and keep the situation under control. Solving some problems may seem easy; the hard part is keeping all customers satisfied and maintaining low dissatisfaction rates.
Why use the Customer Health Score?
Every process requires study, time, and dedication. Therefore, it's common for entrepreneurs to wonder whether a new method is truly worthwhile and why they should use it.
The Customer Health Score offers some great benefits for your company. Check it out!
Greater possibility of contract renewal
By knowing how the customer is doing and maintaining a healthy relationship with them, the chances of renewing service contracts or making new purchases are greater .
With loyal customers, income predictability increases, enabling greater long-term investments.
Improved company reputation
Financial return is important, but having a good brand reputation in the market makes all the difference for a company .
By having satisfied customers, you can generate marketing , which is one of the best ways to win over new and potential consumers.
Reducing customer churn
Losing customers is bad for any company, and often it happens without even knowing the real reason for their departure or termination of contract.
By implementing the Customer Health Score, you can predict whether a customer is likely to cancel your services , allowing you to work to prevent customer loss and win them back.
A cancellation rarely happens overnight; it's the result of a combination of several issues, which can sometimes be resolved quickly if the company monitors the consumer's health.
Conclusion
The Customer Health Score is an essential metric to monitor, as it ensures the company's competitiveness and customer retention and loyalty.
Implementing metrics provides new directions for visualizing and solving problems, as well as changing behaviors and maintaining better relationships with customers , who are the most important part of a business.
Have you ever considered implementing a Customer Health Score? Now that you know a little more about this indicator and its benefits, take action and put this new way to success into practice for your company!
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