cs metrics redux 📊
Not all metrics are created equal.
January 26, 2025
I get asked a lot… “What are the customer success metrics we should be tracking?”
It’s a tough question to answer because most teams are swimming in metrics — but not all metrics are created equal.
To answer it, I like to break metrics into three categories: business metrics, outcome metrics, and activity metrics.
Let’s go through each.
These are internal-facing indicators of your company’s health and success. They drive your company’s value, but here’s the catch: they don’t tell you anything about your customers’ success.
By nature, business metrics are lagging indicators. They’ll tell you what’s already happened, but they won’t help you course-correct in real time.
Outcome metrics measure your customer’s progress, not yours. Ideally, they are tied to your product or service but represent the real-world impact on your customer’s business.
For example: If you sell recruitment software, an important metric might be “time to fill” — the average number of days it takes to fill an open job position. Outcome metrics like this give you a direct line of sight into whether your customers are achieving their goals.
And, ideally, these metrics ladder up into business outcomes like:
These metrics are powerful because they map directly to measurable impact. But here’s the challenge: outcome metrics are the hardest to measure.
They require deep customer knowledge and data you might not have access to. So often, you’ll need to use proxies — like product usage data or activity metrics — as a stand-in when direct data isn’t available.
These success metrics are the hardest to measure but the most impactful because they align your entire company around customer outcomes.
Activity metrics are leading indicators of outcomes, but they’re not the outcomes themselves. Just because a customer logs into your platform every day doesn’t mean they’re getting value from it.
The key is ensuring activity drives outcomes, which in turn drives business results. Each is a leading indicator for the next.
Activity and business metrics are easy to track — so most companies stop there.
Your finance team already tracks business metrics like revenue, NRR, GRR, and Gross Margin. And there are plenty of tools on the market that allow you to track and measure activity.
But these are surface-level indicators. To really understand customer success, you need to go deeper.
Melissa Perri says it perfectly in her book Escaping the Build Trap:
“Listen to your customers and focus on their problems instead of your own solutions. Fall in love with those problems. Also, go seek out data to prove and validate your ideas.”
Most companies are in love with their solutions and their own business metrics. But to drive real success for both your customers and your business, you need to fall in love with your customer’s problems, the outcomes they’re working toward, and obsess over ways to measure those outcomes.
To help visualize this concept, here’s a fantastic graphic from my friend, Jeff Navach:
The reality is, in any business, you have to focus on multiple things at once and keep them in balance. As leaders, it's our job to align activity (what our teams do) toward business results for our customers while ensuring we drive our own business success.
The best leaders walk that tightrope every day.
What customer outcome metrics do you measure? Have you found they are a leading indicator to your company's financial success?
🤘
We’re grateful you choose to read each week.
When you’re ready for more, there are a couple ways we can help:
» Cover Your SaaS is a financial literacy course for go-to-market leaders. Grab your copy here.
» Promote your product and services to over 4,000+ senior SaaS Sales, Marketing, and Customer Success pros by sponsoring our twice-weekly newsletter and podcast.
