Customer Health Score (CHS)
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.
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.