Customer Health Scoring: Common Problems and Fixes

Want to reduce churn and grow revenue? Start with customer health scoring.

A well-designed health scoring system helps you spot risks early, identify upsell opportunities, and improve customer outcomes. But many businesses struggle with common issues like picking the wrong metrics, using generic models, or failing to act on scores.

Here’s a quick summary of the key problems and their fixes:

Problem 1: Poor Metric Selection
Fix: Focus on metrics like core feature usage, success milestones, and user distribution.
Problem 2: Generic Scoring Models
Fix: Tailor models for each segment (e.g., enterprise vs. SMB).
Problem 3: Late-Stage Detection
Fix: Use early warning systems to catch issues sooner (e.g., track usage drops).
Problem 4: Unclear Next Steps
Fix: Link scores to specific actions like follow-ups, training, or upsell plans.

How to Build an Effective CUSTOMER HEALTH SCORE Model

4 Key Problems in Health Scoring Systems

B2B SaaS companies often encounter four major challenges when implementing health scoring systems. Here's a closer look at these challenges and why they matter.

Poor Metric Selection

Many teams rely on surface-level metrics that fail to capture real customer value. For example, focusing solely on login rates might seem logical, but it doesn’t reveal whether users are engaging with features that truly matter. This gap can result in health scores that misrepresent customer behavior and fail to provide meaningful insights.

Generic Scoring Models

One-size-fits-all models often fail to account for the unique needs of different customer segments. Enterprise clients have completely different success criteria compared to small businesses, and industry-specific use cases demand tailored evaluation. Using a standardized model risks labeling accounts inaccurately because it doesn’t consider these differences.

Late-Stage Detection

Many systems only flag problems after they’ve grown into significant issues. For instance, relying on support ticket volume as a key indicator often means you’re catching problems when customers are already frustrated. This reactive approach limits the ability to intervene early and improve outcomes.

Unclear Next Steps

Declining health scores often come with no guidance on what to do next. Teams are left guessing because the scores don’t tie directly to specific behaviors or events. Without actionable playbooks or clear intervention strategies, these scores risk becoming just another number to monitor without driving real change.

Addressing these challenges requires targeted solutions and continuous improvement. In the next section, we’ll dive into practical strategies to create health scoring systems that truly make a difference.

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How to Fix Health Scoring Problems

Turn your health scoring system into a tool that drives customer success.

Choosing the Right Metrics

Focus on metrics that reveal how customers use your product and achieve their goals. Keep an eye on:

Core Feature Usage: Track how customers are adopting the features that deliver the most value.
Success Milestones: Measure key actions that show progress toward customer goals.
User Distribution: Check how active users are spread across teams and departments.

With Userlens' activity dots feature, you can easily visualize usage patterns across customer segments. This helps pinpoint which features are most impactful for customer success.

Once you’ve identified the metrics, adjust your scoring to fit different customer groups.

Creating Segment-Specific Scores

Customize scoring models for each customer segment.

Enterprise Segment Example:

Key Metrics: Multi-team usage, API integration, and how deeply the system is embedded.
Supporting Metrics: Response times for support and completion of quarterly business reviews.
Scoring Focus: Emphasis on system-wide adoption.

SMB Segment Example:

Key Metrics: Speed of feature adoption and time-to-value.
Supporting Metrics: Use of self-help resources and resolution of support tickets.
Scoring Focus: Early success indicators.

Now, set up systems to catch potential problems early.

Setting Up Early Warning Systems

Proactive monitoring can help you spot issues before they grow. Use Userlens' dashboard to track:

Usage Drops: Get alerts when feature usage significantly declines.
Engagement Gaps: Identify teams or departments with lower activity.
Feature Abandonment: Notice when features that were once popular stop being used.

Turning Scores into Actionable Plans

Make health scores useful by linking them to specific actions. Use dashboards to connect scores with clear next steps:

Red Scores

Schedule a customer success review.
Identify and address adoption challenges.
Provide targeted training.

Yellow Scores

Analyze usage patterns for insights.
Arrange follow-up calls.
Share helpful tips and resources.

Green Scores

Look for growth opportunities.
Plan customer reference programs.

Maintaining Your Health Scoring System

Keep your health scoring system up-to-date with regular updates to meet customer needs and adapt to business changes.

Regular Model Updates

Review and refine your scoring model every quarter to keep it accurate and relevant.

Data Validation

Compare predicted outcomes with actual customer behavior.
Ensure metrics align with your current product features.
Check if scoring thresholds match actual customer success patterns.

Score Distribution Analysis

Monitor how scores are distributed across your customer base.
Look for biases in scoring toward specific segments.
Adjust weights if scores cluster too much in certain ranges.

Leverage tools like Userlens' trend analysis to identify shifts in customer behavior that may require updates. Pay attention to how feature usage evolves over time.

These updates lay the groundwork for smooth team collaboration.

Team Alignment

Once your scoring model accurately reflects customer behavior, ensure all teams understand and use the scores effectively. Health scores only make an impact when applied consistently.

Customer Success Teams

Provide clear documentation on interpreting score ranges.
Establish standard protocols for responding to score changes.
Track which actions improve scores most effectively.

Sales Teams

Share insights on how scores can predict opportunities for account growth.
Use health data to inform account planning strategies.

Product Teams

Link feature adoption metrics to overall health scores.
Identify which product updates influence customer health.
Use score trends to shape product development priorities.

Schedule monthly cross-team meetings with shared dashboards to review and align on customer health scores. This ensures everyone stays on the same page.

Conclusion: Using Health Scores to Drive Results

A well-designed health scoring system acts as both an early warning system and a growth driver. It provides insights you can act on, helping you address risks and uncover new opportunities.

To build an effective system, start with the right tools and processes. For instance, platforms like Userlens combine advanced analytics with customer feedback to monitor behavior, spot potential risks, and highlight upsell possibilities.

Key Focus Areas for Success

To make the most of health scoring, prioritize:

Automated alerts for potential risks
Tracking performance by customer segments
Dashboards that encourage action
Clear protocols for responding to score changes

Turning Insights into Action

When teams stay aligned and models are regularly updated, health scoring becomes a tool for driving customer success. These updates ensure your scores lead to actions that improve customer outcomes.

The aim isn’t just to track customer health - it’s to actively improve it. By using the right mix of tools, metrics, and processes, you can spot risks early and seize growth opportunities before they arise. Keep refining your approach to maintain effectiveness and support ongoing growth.