All About Customer Success: What It Is, Key Metrics, And More [BONUS: Free Course]

Understand what Customer Success is, how we apply it in DR, key metrics to track and much more

Customer Success is a strategy that emerged with SaaS companies to keep their customers longer and thus retains more revenue. Companies that generate higher revenues and grow quickly have strong CS strategies.

Do you also think that Customer Success is nothing more than “support with a nice name”? So, really understand what it is and how this concept impacts the growth of companies.

7x more expensive. This is the cost difference between acquiring a new customer and retaining an old customer, according to some market indications.

So why do we spend most of our time and our best resources trying to attract and sell to a new customer if we can – with the same effort and investment – ​​retain 7 customers?

Yes, Blue World City are here to talk about Customer Success – or, in other words, about customer happiness. Stay with us to understand everything about the subject!

For starters, what is Customer Success?

Customer Success – in free translation, customer success – is a strategy that emerged with Software as a Service (Saas) companies to keep their customers longer and, thus, retain more revenue. It is in this context and with this mentality that a movement emerges to try to change the idea of ​​the whole after-sales.

Companies that generate higher revenues and grow quickly have been proven to have strong Customer Success strategies.

On the other hand, some people still label Customer Success as premium support, customer service or “account management with a nice name.” The point is that neither support, nor service, nor account management describes the work of Customer Success well  – which we will talk about later.

Next, let’s go back to the beginnings of business relationships to understand how Customer Success has evolved over time.

The Customer Success Story in 6 Big Steps for Humanity

Do you know what the first sale in the world was? Yeah, actually it was an exchange. At the beginning of human history, it was common to exchange agricultural inputs, hunting results and anything else of value. And that is exactly where the development of Customer Success is based.

What is the value of your solution, product or service?

Today, this notion of what you offer is worth is closely linked to customer success. But it took a few millennia for this appreciation to become directly related to the way your company treats the consumer.

Finally, we have reached the point where it is no longer possible to spend a second without taking care of the customer experience, which must be received by the company as a partner.

Want to know how we got here? So, look back and see which inventions, in addition to the wheel, have brought us customer success.

1. Large scale production

There is no way to talk about the history of Customer Success without thinking that humanity went through the First Industrial Revolution (1760 – 1840), thanks to the steam engine. Motorizing factories allowed humanity to produce on a large scale.

It was the first time the market was supplied with more than necessary for immediate consumption. And this logic was further deepened in the later period, known as the  Second Industrial Revolution (1850 – 1945), in which it is not possible to list just one invention, but hundreds of creations that changed the course of humanity and companies.

2. Humanity learns to say hello

Transmitting the voice by pulse was the great discovery behind the use of “hello”. After all, it was necessary to confirm receipt of the signal emitted from the invention of Alexander Graham Bell and his assistant Thomas Watson, the telephone. This is how a greeting was preferred to a code.

Since the invention of the telephone, there has been a clear preference for simplifying and humanizing communication. That’s why today we can say hello, hello, who’s talking and why not instead of the nautical greeting ahoy. All this freedom is an indication of the presence of the customer success idea, in which the use of the telephone is totally appropriated by the user.

3. Dial 0800

The 1960s brought much more than hits and the concept of disco. It was the time of creation and development of the first and great call centers. With the growth of companies across continental territories, it was necessary to maintain cohesive customer service.

Solving challenges even being territorially far from the consumer became possible with the creation of free call centers. The 0800 reference number is still a great reference for the development of the Customer Service System (SAC).

4. World WWW

Today, having a SAC means going far beyond the telephone. All this is thanks to the World Wide Web (WWW), created in 1991, and the existence of a digital world built from it. People started to see life beyond the physical context that surrounds them, being able to know, consume, and have experienced far beyond the place in which they live.

The same logic had to be part of the relationship with the brands, which, in order to value the customer’s success, had to adapt to the multichannel context. Contact with the consumer is not only made by phone and letters, but also through emails,  websites and social media.

5. SaaS and the cloud

If before the service needed to be multichannel, today, for the customer’s success, the logic must be omnichannel. But this change in the relationship with the consumer was only possible with the creation of the SaaS ( Software as a Service ) logic in the early 2000s.

Marketing systems as services can be recognized today as the founding activity of the concept of Customer Success. Before this type of offering, customer success didn’t have a name or the care it receives today from companies that market innovative business solutions.

And innovation also means following market trends. Cloud computing is the strongest of them. To have SaaS offerings, operating in the cloud is critical.

6. Customer empowerment

All companies using cloud-based services need to be empowered and guided to make the most of the solutions.

This is where Customer Success comes in as a clear strategy to offer a good customer experience with the brand.

There are three main steps to success:

1. Onboarding: receive the customer and present the basic functions of the system;

2. Implementation: customize the software  according to the type of company;

3. Qualification and training: constantly enable customer teams to make the best use of the systems.

Subscription Economy, the economy of subscriptions

And so, we return to the present, with the so-called Subscription Economy, or the economy of subscriptions. Why is Customer Success even more important in this context?

The scenario is clear and is repeated in almost every type of business: loyal customers, who make recurrent purchases, generate more than 80% of the total revenue of any business. This is repeated in hotels, e-commerce and sushi deliveries. Entrepreneurs who haven’t realized this are losing money.

With this proportion increasingly evident, managers and customers are taking the opportunity to create a better business. The big trend in the market today is to offer what were previously products or projects as subscription services.

We currently don’t buy DVDs, we subscribe to Netflix. We don’t buy wine, we subscribe to WineClub. And we don’t buy software that gets installed, we subscribe to tools in the cloud-like RD Station Marketing, for example.

In this era of subscription-based business, the relationship with the customer has gained more importance than ever and this, as we can see, has started a new movement.

The difference in models

The big difference in the business model of a subscription service versus a project or product is its revenue stream. You no longer make a large sum when you win a customer: you earn little by little, monthly.

It is increasingly rare for customers to pay dearly for lifetime software licenses or brands that turn over their bills to marketing agencies with large approved budgets.

Apparently, it’s a much worse option for those who are selling. After all, why stop earning a good amount now to earn little by little?

It turns out that customers currently have access to a lot of information. Competition is high and switching costs are low. Leo contracts are no longer accepted and neither are the “lockins” and large implementation costs. But that’s not just why the market is adapting: it’s also because you can make a lot more money with subscription models.

To do so, it is necessary to retain the customer, make him keep his solution for many months and years, paying him faithfully every month. The only way to achieve such a feat is by delivering customer success.

The solution is customer success!

Face it, you need to constantly deliver success to your customers. Success for them, not you. Making your client work on the problem or opportunity he saw when hiring you will be the only thing that will make him take money out of his pocket to pay it month after month without question.

If you sell software, success for your customer is not making great use of the application, 3 logins a day, and creating new users every month. It’s not about him thinking the interface is great and friendly or thinking you have the best product around. For him, success is reaching and exceeding the goals he had when he started looking for a solution like yours. If it’s a business tool and it hasn’t increased your revenue/profit, reduced costs or risk, you’re probably facing a future ex-customer.

“Oh, but the customer didn’t use my product properly”, “the customer didn’t do the full implementation”, “he didn’t change the processes he needed within the company”, “his analyst was slacking off”…

If you’ve thought of any of these excuses above, great, you’re starting to find the solution. Anything that prevents the customer from extracting value from your product or service is your problem, not theirs. It doesn’t matter if it’s not what you sell, in the end, you are the one with the canceled contract. Thus, it is necessary to be concerned about this from the first contact of a visitor with your website, social networks or other channels. In other words, avoiding cancellations is also a concern of the Marketing team.

The best way to avoid them is to invest in an Inbound Marketing strategy. With it, you offer relevant and valuable content from the beginning of this relationship, when your customers are not even thinking about buying. This way, your business offers a lot of information about your market and your product or service, receiving, in the end, a much more ready customer.

How Customer Success Can Generate More Revenue for Your Business

Funnel, hourglass, or propeller? Have you ever heard of these models, which are applied to companies? What will be the best of them?

Specialist Allison Pickens, from Gainsight, believes that the best shape is the propeller. But how does it work?

She says that, historically, when people talked about how to make the company grow, they usually talked about the funnel: it consisted of taking cold Leads, heating them up, nurturing them and passing them on to sales, which would close some deals.

However, as companies moved to the recurring revenue model, selling products or services that are paid for by subscription, it was realized that a lot of revenue could come from existing customers.

If we renew our customers, using upsell or cross-sell, we will earn much more money

Thus, it was realized that the funnel was no longer enough to talk about how to increase revenue and we started talking about the hourglass, which means that, after closing a deal with the customer, it is possible to expand the time of relationship with the customer. passing of time — phase illustrated by the base of the hourglass, which becomes wide again.

Then comes a referral process, made by satisfied customers.

If we generate success for our customers, help them see ROI on their purchases, create a good experience, they will promote us to potential customers.

It’s what Allison calls a helix, an upward spiral that means you can expand your company’s size with successful customers who refer other companies, closing the loop.

The Customer Success Manager

But, after all, who is the Customer Success Manager? What does this professional do that is so different? What does your job cover? Where do they live and what do they eat?!  Check it out below!

market consultant

It is very common for companies to put extremely capable people to sell the product and relegate the after-sales to a junior person with little business understanding or someone who is too technical.

The Customer Success Manager is always someone who understands a lot about the market where he is operating. If the product sold is from the Digital Marketing market, for example, he/she will be a great Digital Marketing consultant.

In addition to being an expert in the industry in which your company operates, you are also able to understand the most varied businesses and can add management strategies to your client’s venture.

Present throughout the customer’s life cycle

There’s nothing worse than always being attended to by a different person, who doesn’t know who you are or what previous problems you’ve had, do you agree?

One of the great goals of the Customer Success Manager is to be the personification of the company/product. Therefore, he/she accompanies the client at all stages:

  • Implementation;
  • Use;
  • Training;
  • Support, etc.

Thus, not only do you know all the problems and needs when serving the customer, you also become a trusted friend.

Problem Anticipator: Proactive Actions

The Customer Success Manager doesn’t wait for the customer to bring a problem, he or she anticipates it. More than that, it proactively gets in touch with a genuine interest in helping.

The performance of a reactive after-sales service will always only deal with problems – as it is only at this point that the customer will call someone from the company. The worst thing about this situation is not dealing with problems, rather,  not dealing with the silent lack of success  – which a Customer Success Manager will do anything to combat!

Participatory implementer

The beginning of the use of a product or service is a critical moment, which sets the tone for the customer-company relationship going forward and its engagement.

Relegating this role to the customer or a technician is to miss an incredible opportunity to build a flight plan with the customer. To create a bond and always be able to go back to the initial planning to see if it is achieving what it so desired in the purchase.

When to hire the first Customer Success Manager (CSM)?

It is still common to see companies studying and thinking about Customer Success, but doing little about it.

You need to start with at least one person dedicated to the aftermarket. Not with a service person – such as a consultant or deployer who would be after-sales with paid hours.

The essence of Customer Success is precisely reinvesting in the customer and helping them proactively and genuinely succeed – regardless of whether they are being paid for that help.

Maybe you already have someone who provides service or support. How about empowering this person by offering the position of Customer Success Manager?  She will have the freedom to be proactive, talk to customers, guide the deployment of the software into new accounts, and bring a lot of feedback about the platform and the education needed to use it.

In the beginning, it is common – and even recommended – that your CSM is really a “handyman” after sales. As long as he really only works in after-sales and doesn’t lose his focus and attention doing a little Marketing, coding in overtime or closing sales at the end of the month…

When to do this? As a rule of thumb, think that you must have your first CSM before reaching 10 employees in the company.

Don’t even let it go through your head that you will get a better Return On Investment (ROI) by  hiring a seller or developer. Your first customers are probably very close to you and complacent about your mistakes. With this behavior, you settle down and fail to use the full potential of referrals and feedback from these customers. Something that, for those who need traction and growth, is worth gold.

How many customers should a CSM serve?

To have this magic number, all customers and all products would have to be the same. As they are not, the CS factors that are most similar between different companies are budget and expected ROI. So, the right question is: how many reais should a CSM serve?

The world’s leading CS experts agree that each CSM needs to meet between $1 and $2 million in Annual Recurring Revenue (ARR). For a simple adaptation to Brazil, we could think that each CSM must meet 100 thousand reais of Monthly Recurring Revenue (MRR). If you really want to do better math, think that the cost of a CSM (including salary, charges and fixed cost) should be around 10% of the portfolio it serves: 10% should be a target, reinvesting 10% in CS can bring an ROI many times greater in the total revenue that your customer will bring you (Lifetime Value).

This makes it easy to tell how many customers a CSM needs to serve. Divide 100,000 by your average ticket and you’ll get a great response.

The answer may be a reality check, but it’s important that you be very aware that the “kind” of Customer Success you can offer is directly related to your price. The higher the price, the lower the number of accounts, the greater the ability to provide Customer Success with personal and proactive contact. The lower the price, the greater the number of accounts, the greater the need for responsive Customer Success that focuses on mass help and training solutions.

How to structure the team, then?

As your business and after-sales needs grow, the “handyman” model of CSM no longer makes sense and becomes even harmful. Then comes the need to structure the team.

There are several possibilities to structure a CS team. You can think of:

  • Team size;
  • In function;
  • Industry segments;
  • Customer size, among others.

Here at Digital Results, we started to structure the team by size (it was a mistake and we learned from it ) and we continued to make segmentations by function slowly.

Divide a big team into smaller teams

This aspect is extremely important. In DR, we use 8 as a magic number, where interactions are healthy, close and productive.

Jeff Bezos, the famous Amazon CEO, has a rule that no team should be big enough that two pizzas won’t serve dinner.

With up to 8 people, you get to know very well what each person is doing, what the person’s main concerns or problems are. A team manager can leverage productivity by worrying about training, charging, supporting and developing 8 people.

Build your first team, but don’t start multiplying teams that do exactly the same thing. Break up the group into smaller teams, yet with separate roles. Over time, you should begin to “skin” the roles of a “CSM handyman” on other teams.

What functions do CSM get?

After stripping all CSM functions, what’s left? The most essential function of a Customer Success Manager: ensuring that customer success is achieved through engagement with the product or service.

To do this, he/she must orchestrate all other functions within the aftermarket. Having a path designed for this helps to identify where the customer is and where to go. In other words, a CSM identifies what the client is doing or not doing, the results he has achieved and defines what kind of help he will offer in this situation. Whether offering training, consulting, sales, content or a simple connection with guidance.

This work should also be well organized and planned with periodic executive review meetings, when the client’s executives are brought to a meeting to review expectations, objectives and next steps. CSM must know at all times what each of its clients expects from a result, how they intend to achieve it and how they have acted to achieve this.

Essential metrics to start an area of ​​Customer Success

In managing the work of delivering customer success, tracking metrics is essential. It is by measuring Customer Success metrics that the manager can gain insight into the health of their customer base, predictability of revenue growth or loss, or anticipation of when a customer will cancel.

Too many metrics can be intimidating, especially if the company’s management control is not very detailed or does not have much technology involved. You have to know where to start.

It is interesting to start with a few and go deeper, as they can develop into several others. With time and experience, you can – and should – start measuring more complex metrics, turning this development into an iterative improvement process.

Furthermore, it is characteristic of Customer Success the importance of the history of these metrics – as usually actions to improve them do not have an immediate effect on the customer base. That way, the sooner you start recording them, the better.

Metric 1: Churn (or cancellation)

Churn  is an English expression that for business indicates the cancellation of service. Churn is a consequence of the customer’s complete experience with the company, not just the service provided by Customer Success analysts.

Anything can trigger the frustration that results in a cancellation: poor service, service usage issues, product bugs, wrong billing, etc. But, at the end of the day, it’s the customer service or Customer Success area that accounts for this. The financial impact of churn on the organization is exponential, and it becomes very large in the long term.

How to calculate churn

Churn can be calculated as Account Number Churn or Revenue Churn. The first calculates the cancellation with the number of customers who canceled. The second sum the total monthly recurring revenue that was lost with the customers who left.

To start tracking churn, you’ll need a minimal control infrastructure. It can even be a spreadsheet with a list of customers.

When calculating churn, discount the current month’s total new sales from the number of accounts at the end of the month and divide by the number of customers at the beginning of the month. The resulting percentage, decreasing from 1, is the churn rate for that month.


Total accounts at the beginning of the month = 100

Total accounts at the end of the month = 110

Total new sales in the month = 15

Churn = 1 – [(110-15)/100]

Churn = 1 – [95/100]

Churn = 1 – 0.95

Churn = 0.05

Churn = 5%

In other words, 5% of the customer base was lost.

Metric 2: Expansion (or additional sales)

Expansion means the increase in revenue that a customer pays to your company. In the case of subscription deals, we can see it as an increase in the contracted plan ( upsell ) or as the contracting of other products (cross-sell). While churn means the loss of monthly recurring revenue, expansion is the increase in monthly recurring revenue.

It is very common in subscription businesses for pricing to be built on verticals that enable revenue growth over time:

  • Number of system users;
  • Access to certain tools
  • Additional modules;
  • Disk space, among others.

This means that if the customer is really successful, they will eventually feel the need to buy more modules, more tools, more services, etc. If well-orchestrated, the customer will typically see their ROI and be happy to pay more – as they anticipate that they will earn or save more money than they invest.

The work of customer success analysts and developers typically has the greatest direct impact on this metric. The better the customer service work – and the better the new product features – the more recurring revenue paid by your customer base will expand.

how to calculate

To calculate the amount of expansion achieved, note the total monthly recurring revenue from the customer base at the end of the month (discounting new sales) and decrement the total recurring revenue at the beginning of the month (discounting the revenue lost to churn). Dividing them by the other will have the expansion value for that month.


Total recurring revenue at the beginning of the month = 200,000

Total recurring income at the end of the month = 280,000

Recurring revenue from new sales = 60,000

Lost recurring revenue from churns = 10,000

Expansion = [(280,000-60,000)/(200,000-10,000)] – 1

Expansion = [(220,000)/(190,000)] – 1

Expansion = 1.15 – 1

Expansion = 0.15

Expansion = 15%

In other words, from the base that started the month and did not cancel it, we had 15% more revenue.

Metric 3: Activation

Activation, more than a metric, can be seen as a concept: how can your customers be successful with your service if they don’t take the necessary minimum actions to do so?

“Activating the customer” means teaching you how to meet the minimum criteria to see value in your service. These criteria vary from company to company, service to service.

For example, if you subscribe to financial software, the minimum expected is to register a few accounts and do a few transactions to get started. If even this minimum is not met, how long will you continue to pay? Little. The trend is a cancellation.

Therefore, define with your service team and product the minimum necessary for the customer to “activate” your contracted service:

  • Number of accesses;
  • Number of Actions;
  • Critical actions are taken;
  • Results achieved, among others.

It is even worth reviewing the activation criteria on a recurring basis, looking for the best way to identify the minimum necessary that the customer needs to do to avoid a cancellation sooner than you would like.

How to calculate

To calculate, keep in mind that Activation is a percentage of base customers who are activated. You need to set a minimum working time before a new customer starts counting for the metric (eg 1 month after starting to use the service). To follow up, you can use a simple customer spreadsheet to map who has met the minimum criteria or not, calculating activation from that.


Number of total customers: 300

Number of customers with minimum time (eg 1 month): 220

Number of clients with minimum activated time: 190

Activation = 190 / 220 = 86%

Metric 4: NPS

The NPS, or  Net Promoter Score, is a metric created and widely accepted in the market to measure the customer satisfaction of companies in any industry or segment. It consists of asking just one question (or a variation of the question): “on a scale from 0 to 10, how much would you recommend our company to a friend or colleague?”.

According to NPS theory, the answers are grouped into 3 groups:

  • from 0 to 6 the customer is a possible detractor of the company;
  • from 7 to 8 the customer is neutral;
  • from 9 to 10 he is a promoter of the company or its product.

If the customer’s experience with your company is negative, he will tend to be in the group of detractors. If he has had a great experience, most likely he will be a promoter, bringing the much sought-after referrals.

To collect NPS data, at a pre-set frequency run a quiz with the default NPS question. If the questionnaire is via software, it is simpler to do it more often. If it is manual or by email, a lower frequency may be more suitable.

How to calculate NPS

To calculate, do the following formula:



Total customers: 200

Detractor customers: 20

Promoter clients: 50

Neutral customers: 130

NPS = (50/200) – (20/200)

NPS = 0.25 – 0.1

NPS = 0.15

NPS = 15%

Important: note that the NPS value ranges from -100% to +100%.

Build your  Customer Success dashboard

Based on these key metrics, your customer service manager can start today to track your numbers and set up a dashboard to control your operation over time and set goals to improve them.

Build a spreadsheet in the simplest way possible and write down the processes for collecting and calculating these numbers: when to collect, how to organize, who is responsible and what else you need to organize your management.

Then explain the metrics to your service team (or Customer Success). It is very important to keep the team always aware of the progress of the metrics and ensure that everyone knows very well how each one works. After a period of adjustment, set goals for the team as a whole to, in the future, start driving personal goals for each customer success manager (your account managers).

As a final result, expect to have relevant data to track your client portfolio and your team’s service. Show the company what this entire follow-up process is doing to improve the management of its customers – and how it is working to increase recurring revenue for the company as a whole.