Customer Success Glossary

BI software is a data analysis software that is designed to collect, analyze and report data for data queries, visualizations, and reports or dashboards. It provides users with much-needed insight into company-wide customer data and makes it more accessible and convenient to organize and analyze.

The Chief Customer Officer is typically the highest position in a customer success department and reports directly to the Chief Executive Officer (CEO), though this may vary between companies. The CCO is the voice for the customer and the CS department and is responsible for uniting C-level executives and the rest of the company on customer-centric values.

Client engagement refers to the level of interaction between your brand and your clients across all channels over the course of your entire relationship. It can refer to what clients do to interact with your brand, as well as, how loyal they are towards your brand.

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Customer 360 is the unification of all customer data into a single view; enabling a complete look into the health of all your customers without jumping between platforms.

To calculate your average CAC, total up all of the costs that go into your customer acquisition tactics for a given period. Then divide by the number of customers acquired during that period. The result is your average CAC. CAC can also be calculated for individual customers.

Customer advocacy is the art of learning what customers need and working to help them gain the value.  When you advocate for your customers, they’ll reward you with their loyalty and become lasting proponents for your brand - they become Customer Advocates

Customer churn is the % of customers lost over a given time frame, typically a month. It is sometimes called customer attrition, customer turnover or customer defection. You can also think of customer churn as the opposite of customer retention.

To calculate the rate of customer churn, divide the number of churned customers (over a given period) by the initial number of total customers: Churn rate = Churned Customers / Total initial customers

A customer data platform (CDP) is software that collects and synthesizes data from various sources into a holistic view of each customer.

Customer effort score (CES) measures how much effort a customer has to expend to deal with some type of customer service issue, such as returning a purchase or getting a support ticket resolved. It evaluates this by asking the customer a question such as, “on a scale of ‘very easy’ to ‘very difficult,’ how easy was it to interact with our company?” The scoring system works similar to CSAT. CES, like CSAT or NPS are an important dimension of customer health.

Customer engagement refers to the level of interaction between your brand and your customers across all channels over the course of your entire relationship. It can refer to what customers do to interact with your brand, as well as, how loyal they are towards your brand.

A customer journey map shows the experience a customer has during their interactions with your company. Mapping out your customer journey helps you optimize each stage in the process in order to improve customers’ experience and promote revenue growth and customer retention.

Customer journey optimization is a strategy for improving customer experiences by analyzing the impact of your customers’ interactions with your brand at each step and implementing best practices to deliver delightful outcomes.

In the wake of technological advances, the definition of customer lifecycle has shifted from the perspective of the seller to that of the customer. At one time, customer lifecycle models took a seller-centric perspective which split the pre-sales phase of the customer’s journey from the post-sales phase. In today’s cloud-based environment, SaaS business models have increased awareness of how the pre-sales and post-sales phases form a unified experience from the customer’s perspective."

Customer Lifecycle Management (CLM) helps you predict and address your customers’ needs and goals as they naturally grow and progress over time in order to foster a lasting connection. Effective CLM requires a goal-oriented approach, with clear milestones to strive for, and a clear roadmap to follow.

Customer lifetime value (CLV) measures how much your average customer spends over the course of their relationship with you.

Customer loyalty is your clients’ commitment to your brand. This can be broken down into a couple of key components:
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1) How much customers purchase from you
2) How often customers promote you to others
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These components, which correlate closely with customer engagement and satisfaction, can be quantified by assigning key performance indicators to them. This makes customer loyalty a metric as well as a concept.

Customer loyalty index (CLI), like NPS, tracks how likely a customer is to recommend a brand, but unlike NPW, it also asks customers how likely they are to buy again and to try other products. CLI doesn’t have a standard scale. It may use 0 to 10, or it may use a different numerical range. No matter what scoring scale is used, a CLI survey invites customers to answer three questions:
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1. How likely are you to recommend us to family or friends?
2. How likely are you to buy from us again?
3. How likely are you to try our other products?
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CLI is calculated by taking the average of customer answers to these three questions. For example, if your average answers on a scale of 0 to 10 for the three questions were 6, 7 and 8 respectively, your CLI would be 7.

Customer mapping, also known as customer journey mapping, follows the experience a customer has during their interactions with your brand. This process helps you to optimize each stage in the journey in order to improve customer experiences and promote revenue growth and retention.

Customer marketing refers to any marketing activities or campaigns that are directly aimed at your customers. These customer-centric marketing efforts are used to help companies reduce churn, improve customer retention, and boost customer loyalty and advocacy.

Customer onboarding refers to the actions you take immediately post sales (after a customer buys a product from you). Customer onboarding focuses on guiding key decision-makers and administrators at your customer's company through the onboarding process and helping them use your product to attain their business goals.

Customer retention refers to the act and process of keeping customers as loyal repeat buyers who are likely to promote your brand to others. Customer retention is the opposite of customer churn.

Customer retention cost (CRC) can be calculated by adding up all of the costs required to retain customers over a given period and dividing by the number of customers retained during that period. These costs can be averaged over your entire customer base or calculated per customer. Typically Customer Retention Cost is calculated on an annual basis.

CSAT stands for customer satisfaction or, when referred to as a key performance indicator, customer satisfaction score. As a KPI, CSAT measures customer satisfaction by inviting customers to respond to a question regarding an experience they have had with your product or company.

The customer success flywheel model emphasizes the continuity between pre-sales and post-sales experience and between the way successful customer retention sets the stage for brand advocacy and the recruitment of new prospects. This model re-envisions the customer experience as one interconnected journey from the customer’s perspective in order to drive customer success and business growth.

Customer success management is a business strategy that promotes customer loyalty by ensuring that customers see value by achieving the goals which led them to purchase your product or service. Customer Success Management can also be called customer management and in older organizations might be transitioning from account management.

Milestones are quantifiable events or activities, such as the percent of users adopting the platform, usage of key features, specific business outcomes, etc. and are used to show if customers are seeing value. Be sure to celebrate milestone achievement and take action to mitigate risk when your customers are not hitting their milestones.

Customer Success Operations define processes and metrics for the VP of CS and CSMs. This role uses data and technology to support operations, diagnose issues, and create more effective programs and activities. They operationalize your VP’s strategy, define the right customer success KPIs, and make decisions that help the team achieve their goals. The most effective customer success teams dedicate talent to CS Operations.

Customer success plans are proposals that document your clients’ goals, so you can monitor performance against plan and to help you achieve them. Their key components include:

1. A list of objectives mutually agreed upon between you and your customer

2. An action plan outlining concrete steps you and your customer will take to achieve their goals

3. A set of key performance indicators and benchmarks to track and measure client progress towards goals

4. A feedback system for incorporating data and client input in order to make strategic adjustments and improvements

First response rate, also known as first response time (FRT) or speed to contact, measures how long it takes on average for your support team to respond to customers after a support request has been initiated.

A freemium strategy uses a free version of a software product to promote a premium version. The free version of the product combines enough functionality to make the product appealing with enough limitations to make an upgrade to the premium version desirable.

Freemium onboarding forms a critical stage in users’ path to becoming paying customers. The communications you use to onboard freemium users can directly determine whether they upgrade to premium buyers or they become inactive users.

Gross revenue retention (GRR) specifically focuses on revenue retention rather than customer retention,. Gross revenue retention measures how much of your monthly recurring revenue (MRR) you retain each month after you’ve subtracted the effects of churn or downgrades to lower-priced products, but not the effects of upgrades. Gross revenue retention can be calculation in monthly, quarterly or annually depending on your selling model and typical subscription term.
This can be mathematically expressed as a formula for monthly:
GRR = [(MRR from renewals – MRR lost due to churn – MRR lost due to downgrades) / MRR at the beginning of the month] * 100

A high touch customer engagement strategy involves regular, one-on-one assistance from a dedicated Customer Success Manager for whom this might be their only account (but is more likely one of a handful of accounts). It is usually used for strategic or high-value customers that are often more complex and require one-on-one assistance.

Key performance Indicator. Key performance indicators are the metrics you collect at various stages throughout your customer journey to help you identify performance against the goals you have set.

Also called tech-touch, this customer engagement strategy involves digital or online engagement and the use of non-designated customer success associates as needed. It is frequently used for customers that generally have a low recurring revenue and/or uncomplicated usecase.

Net Promoter Score has become synonymous with measuring customer satisfaction. Developed by Bain & Company business strategist Fred Reichheld, NPS measures customer satisfaction by asking survey respondents to use a scale of 0 to 10 to answer a single question such as, “How likely is it that you would recommend our brand to a friend or colleague?”

Very similar to gross retention, however, net retention factors in how losses in revenue from churn and downgrades are offset by upsells and expansion.

Product engagement refers to how and how often customers use your products. It encompasses several key elements:

1. Which features customers use

2. How many of your features your customers are using

3. How advanced their feature usage is

4. How consistently or sporadically they use those features

5. How frequently they use your product as a whole

6. How long they spend in your product

Product-led growth (PLG) is a user-centric methodology that focuses on providing exceptional user experiences and effective go-to-market strategies that allow the end user to realize the value of the product for themselves. Essentially, the product sells itself by demonstrating value to the end user.

A Product Specialist typically serves as a liaison between various departments within a company and its customers, helping to troubleshoot problems and inform both current and prospective customers about the company’s products and services.

A quarterly business review (QBR) is a chance to unite your executives and your clients’ executives to discuss the health of their business and your relationship, to communicate future goals and plans, and to strategize how you can deliver more value to them based on those factors.

Scaled customer success is a method of CS that incorporates both human and digital touches to engage with customers following a 1:many approach, allowing individual CSMs to easily and effectively manage a large number of customer accounts.

Stakeholder engagement, the process of aligning, informing and collaborating with parties who have a vested interest in an organization - aka  the decision makers that can make or break your relationship - is an extremely important strategic relationship that should be a high priority but is often neglected.

Totango’s proprietary SuccessPlays are a set of tasks or actions triggered automatically on accounts when they match pre-defined criteria. The automated workflows that are triggered provide a templated action plan to Customer Success Managers so they can focus and complete them to achieve the necessary outcomes in a timely manner.

Totango SuccessTeams allows you to manage the scope of accounts for groups of team members to improve focus and productivity. Leaders are able to create teams oriented around a particular line of business and specific team objectives in order to increase the relevance of information available to each team. SuccessTeams give company leadership assurance that the right team members are accessing the right customer data.

User onboarding encompasses all users of your product at your client company, including decision-makers as well as other users, and it guides them through learning how to use your product to accomplish daily tasks.

The Vice President of Customer Success oversees the development and implementation of CS strategies, manages the existing customer base and handles the management and growth of the CS team.

Voice of the Customer (VoC) is the process of requesting, gathering and analyzing customer feedback. It provides a direct opportunity to improve the customer experience, which, in turn, makes customers more likely to remain loyal.