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B2B Sales Glossary:
Customer Success & Post Sale
Master the essential revenue and financial metrics that drive B2B SaaS success. From ARR and MRR to retention metrics and customer economics, these terms are critical for understanding pipeline health, forecasting growth, and making data-driven decisions.
Health Score
Short Definition
What Is a Health Score?
A Health Score is a composite metric that measures a customer’s overall relationship with your product and company. It helps organizations predict renewal likelihood, potential churn, and expansion opportunities based on data-driven signals.
Typically, a Health Score combines key inputs such as product usage frequency, feature adoption, customer satisfaction (e.g., NPS), and engagement levels with customer success or support teams. When monitored consistently, it becomes a leading indicator of retention risk across your customer base.
In B2B SaaS, the health score is a Customer Success (CS) core KPI that bridges post-sale engagement metrics with forecast discipline. It ensures that your team can act early, before customers disengage or downgrade.
Why Health Scores Matter in B2B Sales
Health Scores help you hit your number and forecast accurately.
- They help account teams identify at-risk renewals months ahead of time, giving them a clear plan to intervene.
- They highlight expansion-ready customers already seeing value, helping sales capture growth with open eyes.
- In forecast calls, Health Scores elevate customer retention from “gut feel” to data-backed predictability, improving ARR predictability.
A strong Health Score process builds tighter alignment between post-sale success, revenue operations, and executive forecasting; it’s critical for building a resilient revenue machine.
How to Use Health Score in Your Sales Motion
1. Define the Inputs
Start by identifying the core variables that drive customer health. Common inputs include:
- Product usage (logins, time in platform, feature adoption)
- Engagement (QBR attendance, CSM touchpoints)
- Support interactions (tickets resolved vs. opened, sentiment)
- Business outcomes achieved (ROI, success metrics met)
2. Weight the Metrics
Assign each health component a weight based on its predictive power. For instance, usage might be 50%, engagement 30%, and satisfaction 20%. This weighting should be validated periodically against renewal outcomes.
3. Establish a Scoring System
Use a standardized scale (for example, 0–100 or “Red/Yellow/Green”) to visualize account health. Green accounts are healthy and renewal-ready; red accounts require immediate attention.
4. Integrate Health Scores into Forecasting
Incorporate Health Scores into forecast calls, renewal pipeline reporting, and executive dashboards. Discuss top risks (low scores) and top expansion opportunities (high scores) so all teams share a single version of retention truth.
5. Automate and Trigger Actions
Use automation to trigger alerts or playbooks when health declines. For example, if a customer drops below a health score of 60, assign a CSM task to run a value re-engagement meeting.
Key Metrics and Benchmarks
There’s no universal Health Score formula, but metrics should tie directly to how your product delivers value.
Key metrics include:
- Product usage adoption (% of available features used)
- Engagement rate (QBRs attended, meeting cadence)
- Support efficiency (tickets resolved/time to response)
- Sentiment (CSAT or NPS trends)
- Renewal rate correlation (how Health Scores predict churn likelihood)
Benchmarks
- Top-performing SaaS CS orgs track Health Scores weekly.
- “Green” thresholds often align with >80% usage adoption or >75 Health Score index.
- Consistently unhealthy (<50) accounts predict churn in 80–90% of cases, a powerful early signal for RevOps.
Common Mistakes and How to Fix Them
Frequently Asked Questions
How often should Health Scores be updated?
Ideally weekly. Frequent updates ensure your team tracks changes in usage or engagement before they impact renewals.
Who owns the Health Score?
Customer Success typically owns Health Score maintenance, but Sales and RevOps should use it to inform forecasts and account strategy.
How do I validate my Health Score model?
Compare past Health Scores to actual renewal and churn outcomes. Adjust weights for variables that best predict retained revenue.
Can a Health Score be used for expansion sales?
Yes. Healthy customers often signal readiness for upsell or cross-sell. Use Health Scores above your “green” threshold to target expansion plays.
How should Health Scores appear in forecast calls?
Include a column for each customer’s current Health Score in renewal reports. Discuss red accounts as risk mitigation priorities and green ones as growth candidates.