Posts in category: Revenue growth

We are thrilled to announce the securing of an $8.5M seed funding round led by Eight Roads, TechAviv, and a select group of angel investors, including company co-founder Ariel Maislos.

This funding will allow us to further develop our platform and grow the team as we work to bring you the best tools for converting your customer usage data into revenue.

Our platform allows you to have complete visibility of where your customers are in their customer journey by analyzing their engagement with your product in real-time. We believe that this technology has the potential to revolutionize the industry and make a real impact on the lives of our customers.

“SaaS companies are in a unique position where they can actually measure the value their users extract from their products. By correlating this information with data coming from CS, sales, and support, we create a customer observability platform, which is crucial to generating sustainable and proactive revenue growth. Securing our funding is a huge step toward our platform’s capability to help businesses succeed in a tough and unpredictable market. Especially when KPIs are now more focused on sales efficiency and NRR. As revenue teams need more product insights, we aim to provide an out-of-the-box solution to a problem which companies tried to solve internally until now.”  

Itamar Falcon, CEO of Coho AI. 

We would like to express our gratitude to all of the investors, customers, and employees that joined us on this journey! 

Stay tuned for more developments in the near future! 

Read the full story as it was shared by TechCrunch.

As a customer success professional, one of your primary goals is to ensure that your customers are successful in achieving their desired outcomes using your product or service. This requires a proactive approach to identifying and addressing potential issues or challenges that your customers may face. One effective tool for doing this is a customer health score, which is a quantitative measure of a customer’s overall health and success with your product or service.

In this blog post, we will delve into the importance of customer health scores for customer success teams and how they can be used to drive customer success. We will also discuss some best practices for creating and using customer health scores, as well as how they can be integrated into a customer success strategy.

What is a customer health score

A customer health score is a metric that measures the overall health and success of a customer with your product or service. It is typically a numerical score or rating, with a higher score indicating a healthier and more successful customer.

There are various ways to calculate a customer health score, but it typically takes into account a combination of factors such as usage and adoption of the product, customer satisfaction, and any potential risks or issues that the customer may be experiencing. Some customer success teams may also consider other factors such as the customer’s business outcomes or the value they are receiving from the product.

The purpose of a customer health score is to provide a quick and easy way to assess the overall health of a customer, which can help customer success teams prioritize their efforts and identify potential issues or risks before they become major problems.

Why are customer health scores important for Customer Success teams?

While many companies still don’t use customer health metrics, it’s a missed opportunity that could be a significant growth engine. Here are 4 reason why:

Prioritizing efforts

With a customer health score, customer success teams can quickly assess the overall health of their customers and prioritize their efforts accordingly. This allows them to focus their time and resources on the customers who are most in need of assistance or are at the greatest risk of churning.

Identifying potential issues early

A customer health score can help customer success teams identify potential issues or challenges before they become major problems. This allows the team to proactively address these issues and prevent them from escalating.

Driving customer success

By regularly monitoring and improving a customer’s health score, customer success teams can help ensure that the customer is successful in achieving their desired outcomes using the product or service. This can lead to increased customer satisfaction and loyalty, which can ultimately drive revenue and growth for the company.

Providing a common language

Customer health scores provide a common language for customer success teams to use when discussing the overall health and success of their customers. This can help teams communicate more effectively and ensure that everyone is working towards the same goals.

Best practices for creating and using customer health scores

When creating and using customer health scores, it’s important to keep the following best practices in mind:

Choose the right metrics

The metrics that you choose to include in your customer health score should be relevant to your product or service and should accurately reflect the overall health and success of your customers. Be sure to consider a variety of factors such as usage, satisfaction, and potential risks.

Regularly review and update the score

Customer health scores should be regularly reviewed and updated to ensure that they are accurate and relevant. This may involve adding or removing metrics, adjusting the weighting of different metrics, or making other changes as needed.

Involve the customer in the process

When developing and reviewing customer health scores, it’s important to involve the customer in the process. This can help ensure that the metrics chosen are relevant to the customer’s needs and goals and that the customer is aware of their overall health and success.

Use the score as a starting point for improvement

A customer health score is not a static metric – it should be used as a starting point for continuous improvement. Customer success teams should work with customers to identify areas for improvement and develop action plans to address these areas.

Leverage data and analytics

Customer health scores should be based on data and analytics, rather than subjective opinions or assumptions. This helps ensure that the score is objective and accurate and can be used to drive meaningful actions and improvements.

By following these best practices, customer success teams can effectively create and use customer health scores to drive customer success and improve the overall health and success of their customers.

Integrating Customer Health Scores into a Customer Success Strategy

Incorporating customer health scores into your customer success strategy is an important step in driving customer success and ensuring that your customers are achieving their desired outcomes. 

Set up regular check-ins with customers

Customer health scores should be regularly reviewed and discussed with customers. During these check-ins, customer success teams can review the customer’s health score and discuss any potential issues or challenges that the customer may be facing.

Use customer health scores to guide customer success plans

Customer success plans should be tailored to the specific needs and goals of each customer. Customer health scores can be used to guide the development of these plans and to identify areas where the customer may need additional support or resources.

Use customer health scores to drive cross-functional collaboration

Customer success is often a cross-functional effort, involving teams such as sales, marketing, and product development. .Having a single source of truth can be used to drive collaboration across these teams and ensure that everyone is working towards a common goal.

Leverage automation and technology

There is  a variety of technologies available that can help automate the process of tracking and managing customer health scores. These tools can help customer success teams save time and focus on more high-value activities, such as working with customers to address their needs and drive success.

Takeaways 

Customer health scores are a crucial tool for customer success teams as they help prioritize efforts, identify potential issues early, drive customer success, and provide a common language for teams to use. 

By regularly reviewing and updating customer health scores and integrating them into a customer success strategy, CS teams can build stronger, more loyal customer relationships and drive revenue and growth.

Want to know more about how you can incorporate customer health score into your daily work? Contact us!

In times of recession, businesses are more likely to cut costs wherever possible, including by canceling subscriptions to non-essential services. This means that B2B SaaS companies need to focus on retaining their existing customers in order to continue generating revenue. NRR allows companies to track their success in doing so and make any necessary adjustments to their retention strategies.

Winning at revenue growth also relies on revenue retention. Revenue retention will give you the keys to unlocking all other aspects of revenue growth strategy. 

These users prop up all outreach to new customers showing that your brand has a high-level of trustworthiness for long-term relationships. 

Revenue growth can seem like a no-brainer, but when it comes to revenue retention, it can feel like a shot in the dark. So, what is net revenue retention, and why does it matter so much? 

Net revenue retention, abbreviated NRR, is a metric used to boost business growth. 

What is NRR?

Net Retention Rate (NRR) is a key metric for any B2B software as a service (SaaS) company, but it becomes particularly important in times of economic recession. NRR measures the percentage of a company’s existing customers that continue to use and pay for its services from one period to the next.

Industry leaders describe NRR as “net dollar retention.” 

Net dollar, or net revenue retention, the company considers upgrades, downgrades, and customer churn to analyze the business customer base.  

NRR breaks down into monthly segments called monthly revenue retention, or MRR. MRR is a rough estimate of the revenue that comes from your user base each month. 

Why is NRR important?

Experts believe NRR is now more important than ever before. 

With the current economic slump, it is now more important than ever before to retain customer bases. 

Estimates state that a business can deliver 20 percent growth yearly with the existing customer base. 

Growth happens without adding a single new user. Why? Because a stable customer base has expansion opportunities. We’ll talk about that in a minute. First, we’ll define the logic and the math that backs NRR. 

Know what churn looks like 

When factoring NRR, you will also want to look at churn cases. Churn is the rate at which customers end relationships with your brand. 

If a customer cancels a subscription, this may not be the same thing. They may still access your free version of the product, and yet not be paying for a subscription for whatever reason. 

Churn distinguishes between these cases and cases where a customer has broken a connection with your brand forever. 

The math of NRR 

Net Revenue Retention requires some simple math. Use the NRR equation:

 (Contraction MRR – (Churn MRR + Expansion MRR)) / Starting MRR

Alright, so math sucks. Let’s break this down. 

To find your NRR, you will add your growth to your starting MRR. Subtract downgrades and churn from this new MRR. Now divide the new MRR by your starting MRR. Last, multiply the MRR you got from the division by 100%. This final result is your NRR. 

How to use your NRR 

You might be wondering why we put you through the math. Trust us, it’s worth it.

Simmering it down, NRR is the tool we use to gauge business growth potential from our existing user base. These are more than just fancy calculations. We’re solving for where our growth potential is so we can strategize the best ways to influence that growth to happen.

Industry leaders say that a good NRR is going to show growth of over 100%. 

When the NRR passes the 100% mark, we see growth instead of a static revenue retention rate. An NRR of 100% shows that our annual revenue retention, or ARR, has either grown or remained the same.

Ideally, we want the NRR number to be 109%. This shows that we are retaining a good revenue income and also growing by roughly 9%. 

Recognize the room to grow 

While 9% is ideal, we have found that a business can grow by 20% per year by keeping a healthy net revenue retention. 

Using NRR gives us insights into how to upsell our subscription base. 

Because NRR can show us who is already engaging with a paid version of the product, we can use these metrics to estimate who will be open to an upsell. Upselling happens when your current customer base is open to the value offer for a higher-cost subscription. 

Invest time in expansion opportunities 

Remember a little while ago when we said NRR was good for expansion opportunities? We’ll bring it full circle now. Upselling is one of the expansion opportunities we can explore through NRR math. 

KPIs for the upsell 

We need a little bit from our data rather than solving for growth rates. KPIs take over here. Informed KPIs give us the data groups and tools for seeing the value our users are looking for in an upgrade. We sell from there. 

Building the upsell 

Setting data priorities straight empowers the upsell process. As we explore upselling, we work towards expansion revenue goals. Expansion revenue is any revenue that expands from initial customer contact. We call it expansion revenue because we’re exploring an expanding relationship with our customers. 

Upselling is one of two primary expansion catalysts. The second catalyst is cross-selling. Cross-selling introduces customers to new features or add-ons within their existing plans.  

Prevent churn 

Remember that data can alert you to positive growth opportunities, but it can also show you areas where improvement is key. To avoid churns and “drop off,” you need to know your data and streamline the upsell and cross-sell to work naturally with where the customer is in their relationship with you.

 Marketing leaders remind us that no one likes to be “sold to.” A customer with an issue is more likely to have a negative reaction to expansion measures if they feel that their current needs are not being met. However, addressing this is relatively simple. When in doubt, return to your user data flows.    

Know your data 

We talked about KPIs a little while ago. Here is where they get all-important. Without a clear use for data, teams fumble around product management funnels in the dark. 

This is why actionable, AI-led product growth modeling is important. Here we point a laser to the KPI and hone in on data that is essential for reaching those KPI-based goals. 

Make your data work for the customer 

Whether you upsell or cross-sell, make data work for the customer. Boost your pipeline to understand the customer user-experience flow. Then, use this information to work in natural upsell and cross-sell opportunities.  

Coho’s AI-enhanced product-led growth insight tool will notify the team when a customer reaches a milestone. 

Notification helps teams to optimize the flow of selling prompts in a way that flows with the customer journey and needs. Is a customer outgrowing their current subscription? It’s time for an upsell. Is the customer running into a few roadblocks based on the need for one additional feature? Cross-sell to them. 

Coho AI enables personalized selling based on usage insights. 

Takeaways 

Customers are people. Data helps us relate to them in ways that are as diverse as they are. With better insights into the flow of their needs and wants, we can use the NRR to optimal advantage. 

Coho AI believes that product-led revenue growth is people-led revenue growth. AI empowers human interaction in mass numbers in ways that other growth models never could. 

Bottom line: the NRR is vital to underlying our core community of users. By building on this, you will invest in the life and future of not only your product but also your brand community.  In an economy driven by uncertainty and a deep need for connection, this makes daylight to dark difference between you and your competition.