Customer health score

What is a customer health score?

A customer health score is a rating that combines signals such as usage, service issues and sentiment to show which customers are at risk and which are healthy. Forrester notes that health scorecards are often compared to a checkup at the doctor's office, where several data points are read together to judge whether an account is headed for renewal and growth, or for attrition.

Why it matters to a revenue leader

A revenue leader with hundreds of agreements cannot read every account each week, so a health score decides where attention goes. Its value depends on whether it predicts what customers later do, and TSIA research describes traditional health score models as inadequate for predicting churn. A score that shows green on accounts that later leave gives false comfort, which is worse than having no score. Treat the score as a prompt for a conversation with the account owner, and judge it by how well it would have called last year's renewals and losses.

A facility services company rates every account green, yellow or red. At year end it finds that several of the agreements it lost had been green the quarter before the loss, because the score tracked visits completed and missed that the customer's facilities director had left. The CRO stops treating the score as an answer and starts testing it against what customers did.