Calculate Customer Health Score

What is Customer Health Score?

The Customer Health Score is a numerical representation of a customer's engagement, satisfaction, and activity level with your business. It typically ranges from 0 to 100, where higher scores indicate healthier, more engaged customers.

Businesses use this metric to:

• Identify at-risk customers who may churn
• Prioritize customer retention efforts
• Measure overall customer satisfaction trends
• Segment customers for targeted marketing
• Track the effectiveness of customer success initiatives

While there's no single industry-standard formula, most implementations use a combination of engagement metrics, satisfaction scores, and usage patterns.

How to Calculate Customer Health Score

The most common approach involves weighting several key metrics and combining them into a single score. Here's a typical formula:

Where:

• Engagement Score (0-100): Measures how actively a customer interacts with your product/service
• Satisfaction Score (0-100): Customer satisfaction rating
• Usage Frequency (0-100): How often the customer uses your product/service
• Recency (0-100): How recently the customer interacted with your business

Interpreting the Score

The Customer Health Score provides several insights:

• 90-100: Healthy customer - actively engaged, satisfied, and frequent user
• 70-89: At risk - showing signs of disengagement but not yet churned
• 50-69: Warning - significant issues that need attention
• 0-49: Churn risk - high probability of leaving

Businesses typically set thresholds for when to intervene with at-risk customers. For example, you might:

• Offer discounts to customers scoring 50-69
• Provide additional support to customers scoring 70-89
• Launch re-engagement campaigns for customers scoring below 50

Worked Example

Let's calculate the Customer Health Score for a customer with the following metrics:

• Engagement Score: 85
• Satisfaction Score: 90
• Usage Frequency: 75
• Recency: 80

Using the formula:

This customer has a health score of 84, indicating they're in good health but showing some signs of potential disengagement. You might want to check in with them to understand what's causing the slight decline.