How to Create a Customer Health Score

A Customer Health Score (CHS) is an essential tool for professional marketers looking to proactively measure customer satisfaction, engagement, and the likelihood of churn or expansion. By quantifying the overall health of a customer, you gain actionable insights to improve retention, identify upsell opportunities, and build stronger relationships.

In this guide, we’ll walk through the steps to create an effective Customer Health Score that aligns with your business goals and customer lifecycle.

What is a Customer Health Score?

A Customer Health Score (CHS) is a metric that represents the overall well-being of a customer relationship. It combines various engagement, product usage, and behavioral signals to predict outcomes, such as:

• Risk of churn (low health score)

• Likelihood of retention (moderate health score)

• Opportunity for expansion or advocacy (high health score)

Marketers use CHS to prioritize resources, design intervention strategies, and track customer success over time.

Step 1: Define Your Goals

Before creating your Customer Health Score, clarify what you aim to achieve. Key goals often include:

• Reducing churn by identifying at-risk customers early.

• Driving upsells by pinpointing customers primed for additional services.

• Improving engagement by understanding patterns of active and inactive users.

• Enhancing customer support by focusing resources where they’re needed most.

Pro Tip: Align your CHS goals with your business priorities, such as revenue retention, growth, or NPS improvement.

Step 2: Identify Relevant Metrics

The Customer Health Score is a composite score based on multiple metrics. These can be grouped into three main categories:

1. Engagement Metrics

• Frequency of product usage (daily, weekly, monthly)

• Interaction with your brand (email opens, webinar attendance, support tickets)

• Website logins and session duration

2. Success Metrics

• Achievement of key milestones (e.g., onboarding completion)

• Feature adoption rates

• Progress toward customer-defined goals

3. Sentiment Metrics

• NPS (Net Promoter Score) or CSAT (Customer Satisfaction Score)

• Survey feedback and qualitative insights

• Customer complaints or ticket escalations

Example: If a SaaS company measures customer health, metrics might include login frequency, feature usage, and NPS scores.

Step 3: Assign Weights to Each Metric

Not all metrics contribute equally to customer health. Assign weights based on their importance to your business outcomes:

• Critical Metrics: High weight (e.g., NPS, product adoption rates)

• Supporting Metrics: Moderate weight (e.g., email open rates, engagement frequency)

• Supplementary Metrics: Low weight (e.g., content downloads, social interactions)

Pro Tip: Collaborate with stakeholders—such as customer success, product, and sales teams—to determine which metrics carry the most weight for health scoring.

Example Weighting Table:

Step 4: Establish a Scoring System

Create a scoring system that translates raw data into a standardized scale. Common systems include:

• 0-100 Scale: Simplified score for easy interpretation.

• Color Coded Scores: Green (healthy), Yellow (neutral), Red (at-risk).

• Tiered Scores: Categories such as “Low Health,” “Moderate Health,” and “High Health.”

Example:

• 0-40: At-risk customer

• 41-70: Neutral/monitor closely

• 71-100: Healthy customer (potential for upsell or advocacy)

Pro Tip: Regularly adjust the scoring thresholds based on new insights, customer feedback, and performance data.

Step 5: Integrate Customer Health Scores into Your Tools

For CHS to be actionable, integrate it into your existing systems. Examples include:

• CRM Platforms: Tools like HubSpot, Salesforce, or Zoho allow for score tracking and automated alerts.

• Customer Success Platforms: Solutions like Gainsight, ChurnZero, or Totango monitor health scores in real time.

• Marketing Automation Tools: Platforms like Marketo or ActiveCampaign enable targeted messaging based on health status.

Why it matters: Integration ensures that customer health data drives immediate action, such as triggering outreach campaigns for at-risk customers.

Step 6: Take Action Based on Insights

The true power of a Customer Health Score lies in its ability to inform actions. Key interventions include:

• For Low Scores (At-Risk):

  • Trigger personalized outreach campaigns to re-engage customers.

  • Offer additional training or support to resolve specific issues.

  • Conduct surveys or calls to uncover pain points.

• For Moderate Scores (Neutral):

  • Monitor closely and provide value-driven resources (e.g., guides, webinars).

  • Highlight underutilized features to encourage deeper adoption.

• For High Scores (Healthy):

  • Identify upsell opportunities with targeted offers.

  • Encourage customer advocacy through referral programs or testimonials.

Example: A SaaS company noticing low usage might trigger an email campaign offering free feature training.

Step 7: Monitor and Refine Your Customer Health Score

Customer needs and behaviors evolve over time. Regularly monitor the accuracy and impact of your CHS and make adjustments:

• Analyze patterns of successful and at-risk customers.

• Refine weights and metrics based on new insights.

• Continuously gather feedback from internal teams and customers.

Pro Tip: Conduct quarterly reviews to ensure your Customer Health Score remains aligned with customer journeys and business objectives.

Leveraging Customer Health Scores for Growth

Creating a Customer Health Score empowers marketers to measure engagement, predict outcomes, and drive meaningful customer relationships. By leveraging the right metrics, assigning appropriate weights, and acting on insights, you can:

• Proactively reduce churn

• Identify expansion opportunities

• Strengthen customer loyalty and advocacy

Start building your Customer Health Score today, and unlock actionable insights to ensure customer success and long-term growth.

🚀 Want to optimize your customer retention strategy? Explore advanced customer success solutions and marketing insights on our Winsome Marketing Blog.