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Customer Health Score
A composite metric combining usage, engagement, and sentiment signals to predict customer renewal likelihood.
Formula
Health Score = Σ (Component Score × Weight)
Components typically include: usage, engagement, support, NPS, payment
Calibrate weights based on correlation with churn
Definition
What is Customer Health Score?
Customer health score is a composite metric predicting the likelihood a customer will renew or churn. It combines multiple signals (usage, engagement, support interactions, sentiment) into a single score that helps prioritize customer success efforts.
Healthy customers are likely to renew and expand. Unhealthy customers need intervention.
Why Health Scores Matter
You can't manually monitor every customer for churn signals. Health scores automate early warning detection, letting customer success teams focus on accounts that need attention before they churn.
Good health scores predict churn 60-90 days in advance, giving time for intervention.
Building Health Scores
Identify metrics that correlate with churn: login frequency, feature usage, support tickets, NPS, payment issues. Weight each component based on predictive power. Validate against historical churn data. Continuously refine as you learn more.
Example
Health score components (weighted):
- Product usage (40%): 85/100
- Support tickets (20%): 70/100 (fewer = better)
- NPS response (20%): 90/100
- Payment history (20%): 100/100
Health Score = (85×0.4) + (70×0.2) + (90×0.2) + (100×0.2) = 86
Score above 80 = healthy. Below 60 = at risk.
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