How would you measure customer success for a newly launched product?

Question

How would you measure customer success for a newly launched product?

A company is launching a product (eg. APIs) for customers which will simplify their existing work and also reduce manual steps involved and time taken for the customers. A company knows what metrics to track such as new customers joining in, active users to measure their success and success of their product. But how will they measure success for customers with regards to this new product?

Asked at Zoom over a year ago

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Joe_riley · Answer 1 · 2022-07-09T01:21:29+0000

Clarification

Let's just spend a moment making sure I understand the question correctly. We as a company offer a product, more specifically a set of APIs, that our customers use to reduce the time taken to perform X. X can remained undefined but it is critical to the success of our customers and must be performed.

While the two are closely aligned, for the sake of this problem we want to discuss how to measure the success of our customers using our product and not ourselves.

Measurement

So generally speaking, I think success can be measured as how much value are our customers getting out of our product. As mentioned above our customers use our API platform as a way of more efficiently accomplishing X.

I would start off with measuring the number of hours our customers are saving using our product. Ideally, we would have some internal benchmark along the lines of customers save 1 hour per every Z API calls made. Based off of that we could divide average number of API calls made per customer by Z to determine the average number of hours saved by using our product per customer.

While the average number of hours saved per customer by using our product is a good indicator of customer success, we can take this further by trying to estimate how much those hours are worth to the customer. If they weren't using our product and doing it manually, what would the hourly rate of the person performing the work be? If we multiply that hourly rate * the number of hours saved we get the total number of value created for the customer.

The other part of the equation that's missing here is how much the customer is paying us to achieve that value mentioned above. We should have those numbers internally.

Summary

In order to measure the amount of success our customers are having using our product, or phrased another way how much value we are adding to them, we can look at:

(number of hours saved * hourly rate of person would performing task X) - how much they pay us