Customer Health Score (CHS)

TL;DR
Customer Health Score (CHS) is a composite metric that indicates the overall strength and stability of a customer relationship. It blends product usage, support history, engagement, and account signals into a single, trackable score. Unlike CSAT or NPS, which measure sentiment, CHS predicts risk and expansion potential—making it a vital early-warning system in SaaS customer success. A strong CHS program turns raw signals into proactive retention and growth.

What Is Customer Health Score?

Customer Health Score (CHS) is a predictive indicator that reflects the likelihood of customer success—or churn—based on multiple behavioral and account-level inputs. It’s not a single metric, but a weighted formula that combines key signals like:

  • Product usage frequency
  • Feature adoption
  • Support ticket volume or severity
  • Billing and contract behavior
  • Executive engagement or sentiment

Each company defines CHS differently based on their model and customer journey. But the goal is consistent: flag at-risk accounts early and surface growth-ready accounts faster.

CHS = Weighted sum of relevant signals (customized by org)

Rather than waiting for a customer to churn—or respond to a survey—CHS offers a proactive way to measure the health of the relationship based on what customers do, not just what they say.

Why Customer Health Score Matters in SaaS CX

Customer Health Score gives you visibility into the real state of your customer relationships—before renewal time, before complaints, before churn. Here's why it's essential:

Early Risk Detection: Declining usage, support overload, or low engagement are often early signs of churn. CHS surfaces these risks in time to act.

Proactive Success Playbooks: With a clear view of account health, Success teams can focus effort where it matters—reinforcing value, addressing friction, and driving renewals.

Custom Fit to Your Model: Unlike fixed metrics, CHS adapts to your unique product signals, customer behavior patterns, and business model.

Predicts Expansion and Retention: Healthy accounts don’t just stay—they grow. CHS helps identify customers who are ready for deeper adoption, cross-sell, or upsell.

How to Measure Customer Health Score

There’s no one-size-fits-all formula. CHS is a custom score built using your most relevant success indicators. It typically includes a mix of:

  • Product data: Login frequency, feature depth, usage trends
  • Support data: Ticket volume, resolution time, sentiment
  • Engagement: Email opens, meeting cadence, QBR participation
  • Commercial signals: Billing issues, plan downgrades, renewals

To calculate CHS, each chosen input is assigned a weight reflecting its importance. Before summing, each signal's raw data is typically normalized (scaled to a common range, e.g., 0-1 or 0-100) so that different types of data can be combined meaningfully.

The general formula for CHS is a weighted sum:

CHS = (Weight1 * Normalized Signal1) + (Weight2 * Normalized Signal2) + ... + (WeightN * Normalized SignalN)

The final score is often presented as:

  • A numeric score (e.g., 0–100)
  • A traffic light model (Green / Yellow / Red)
  • A health tier (Healthy / At Risk / Critical)

Example: A company might define normalized signals for:

  • Usage Score (0-100): 80 (e.g., high login frequency)
  • Support Load Score (0-100): 30 (e.g., low ticket volume implies health)
  • Engagement Score (0-100): 90 (e.g., high meeting cadence)

And assign weights:

  • 40% to Usage
  • 25% to Support Load
  • 20% to Engagement
  • 15% to Billing Behavior (assume a normalized score of 100 for no issues)

CHS = (0.40 * 80) + (0.25 * 30) + (0.20 * 90) + (0.15 * 100) CHS = 32 + 7.5 + 18 + 15 = 72.5

Tools like Gainsight, Catalyst, and Totango offer CHS modeling, or it can be calculated manually or via CRM integrations.

Final Thought
Quotes

Customer Health Score turns scattered signals into a single source of CX truth. It doesn’t replace NPS or CSAT—it complements them. By watching what customers do, not just what they say, CHS gives you a strategic advantage: time. Time to save at-risk accounts. Time to grow healthy ones. Time to make retention a proactive motion.

FAQs
Is CHS an industry-standard formula?
No. It’s fully customizable. Your CHS should reflect the behaviors and risks most predictive of success for your product and customer base.
How often should I update the CHS?
Weekly or real-time updates are ideal for high-touch models. For low-touch SaaS, monthly may be sufficient.
What tools can calculate CHS?
Platforms like Gainsight, Catalyst, ChurnZero, or custom dashboards in Salesforce or HubSpot.
Does CHS replace the need for NPS or CSAT?
No. CHS shows behavioral health, while NPS/CSAT capture customer sentiment. Both offer unique insights.
What score counts as “healthy”?
It depends on your model. Many companies define 70–100 as “green,” 40–69 as “yellow,” and below 40 as “red,” but thresholds should match your benchmarks.
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