Customer Health Score (CHS) is a common and helpful metric for Customer Success Managers (CSM). But, it is insufficient to address opportunities and challenges with your customers. Why? Because it focuses on the vendor-customer relationship and fails to assess the maturity of the customer in running their business. This is why Ralf Wiggten and I recently coined the term Customer Maturity Index (CMI) and developed a methodology for its calculation. Combining CMI with CHS provides the clarity needed for effective playbooks to maximize both the customer’s success and yours from the relationship. This presentation explores the short-comings of common Customer Health Scores, provides the case for Customer Maturity Index, details a suggested methodology for CMI development within a company and provides practical tools for such development.

1. Ralf Wittgen - Chief Customer Officer
Promapp Solutions, Auckland (NZ)
Boaz S. Maor - Customer Success Advisor
@BoazMaor Palo Alto (CA)
Your Customer Health Score may be quite
useless…
June 2017

2. How the concept of CMI came
to be: A Kiwi and an Israeli
walk into a café in Silicon
Valley…
© BoazMaor

3. A customer is the most important
visitor on our premises.
He is not dependent on us.
We are dependent on him.
He is not an interruption in our work.
He is the purpose of it.
We are not doing him a favour by
serving him. He is doing us a favour
by giving us an opportunity to do so.
Source: https://i2.wp.com/holisms.in

4. Customer Health Score (CHS) are Essential for CS
1. Identify Challenges
and Opportunities
2. Determine an Action
Plan
3. Forecast Expected
Outcomes
© BoazMaor

5. Segmenting
customers is key to
effectively serve and
manage them:
1. Stage
2. Size
3. Location
4. Industry
5. Use Case
© BoazMaor

6. But, even with segmentation,
Your Customer Health Score may be quite useless…

7. Let’s assess an example of two actual
customers:
• Large enterprises (Size)
• West-Coast based (Location)
• Relations for multiple years (Stage)
• Very high usage
• Strong relationships
• Repeat expansion
• High CSAT
© BoazMaor

8. Customer A
• A single office
• A single business
• Grew organically
• A very strong team of highly
professional people
• Focus with us on features,
service levels and execution
Customer B
• Multiple offices nationwide
• Three very different
businesses
• Grew by acquisitions
• Team had varying degrees of
technology understanding
• Focused their energy on
consolidating their businesses
© BoazMaor

9. Clearly,
Something
is Missing….

10. Maturity Models Are
Well Established for
Many Functions
© BoazMaor

11. © BoazMaor
The Sales
Qualification Process
is One Good
Example

12. Services Revenue
Software Revenue
Immature Low Medium High
Revenue
Maturity
© BoazMaor
But, while sales qualification ends up with a Y/N qualified
answer, customers are not binary in their maturity…
… and the insights from the sales process should be used
to help the customer success effort on-goingly

13. Services Revenue
Software Revenue
Immature Low Medium High
• Customer requires lots of consulting
• Software use is basic and minimal
• Gross margin is low, CAC Ratio too
long
• Conclusion: Do not sell or serve
(unqual)
• Need for services diminishes
• Software usage is high
• Pressure for advanced features
• Vendor can increase software
fees
• Need for consulting declines
• Need for training on software
increases
• Use of advanced features increases
• Software fees can be increased
• Customer requires a lot of
consulting to help business
• Software use is basic,
sporadic
• Software fees are low
Revenue
Maturity
© BoazMaor

14. Customer Maturity Index measures the sophistication of the
customer in running their function and consequently their
ability to utilize and derive value from the vendor’s solution. It
is aimed at identifying the actions the vendor should take to
address the customer needs.
Customer Health Score measures the
relations between the vendor and the
customer. It is aimed at assessing the health
of those relations and predicting their future
direction: churn, renewal, expansion.
© BoazMaor

15. Cust. Mat. Index
https://s-media-cache-ak0.pinimg.com
CSMs
No Cookie-Cutter Solution to CMI

16. A Suggested Customer Maturity Framework
© BoazMaor

17. A Suggested Customer Maturity Framework (Detail)
© BoazMaor

18. A Suggested Customer
Maturity Framework
(example)
1 2 3 4 5
Low
© BoazMaor

19. A Suggested Customer Maturity Framework (Implications)
Retain
Expand
and
Leverage
Churn
or
Let Churn
Save
High
Low
HighLow
Customer Maturity Index
CustomerHealthScore
© BoazMaor

20. - Software to manage process maps
- Manage continuous improvement
- Manage risk management
initiatives
CMI in action at Promapp Solutions

21. - Interviewed select customers
- Insight to value for customer
- Created framework for Customer Maturity Index (CMI)
- Analysed CHS vs CMI scenarios
- Invested in a consulting service offering to lift CMI
End of 2015 – 10% Churn
CMI in action at Promapp Solutions

22. CMI in action at Promapp Solutions
Simplified
Survey
Ranking 1-5
Description: The motivation and justification
of this project? The expected outcome and
how to measure it? How to engage other
teams? Is the process charter “public”?
1 2 3 4 5
Not really per team entire organization reporting continuous
improvement

23. CMI in action at Promapp Solutions
Simplified
Survey
Ranking 1-5
1 2 3 4 5

24. CMI in action at Promapp Solutions
High
Low
HighLow
Customer Maturity Index
Consult on
process
governance
HAPPY
52%
Expand business
“At risk/weak”
9%
Let go ???
Increase product
usage by tailored
training
CustomerHealthScore

25. CMI in action at Promapp Solutions
High
Low
HighLow
Customer Maturity Index
CustomerHealthScore
HAPPY 52%
Expand
business
Processes
• Aiming for higher CSAT
• Allowing variations
• Forcing standardization
• Using shared services
• Addressing legal obligations
• Linking to risk management

26. - Simplify CMI framework (done)
- Design customer survey (done)
- Identify use cases and create playbooks (WIP)
- Review segmentation of customers in light of CMI (planned)
- Uplift team knowledge (WIP)
End of 2016: 2.2% Churn
CMI in action at Promapp Solutions

27. Your Customer Health Score may be quite
useless…

28. but …
Customer Maturity will make it useful!
Your Customer Health Score may be quite
useless…
Ralf Wittgen - Chief Customer Officer
Promapp Solutions, Auckland (NZ)
Boaz S. Maor - Customer Success Advisor
@BoazMaor Palo Alto (CA)

29. Why Your Customer Health Score may be quite
useless…
For more insight, read the blog series:
Part 1: The Concept of CMI: http://bit.ly/2m9Wcza
Part 2: The qualification of Need: http://bit.ly/2mkDkxR
Part 3: The Practical Framework: http://bit.ly/2mobiND
And please add your feedback and insights as comments!