Whether you are managing a SaaS customer base of 10 or 1,000 or 10,000, you need a consistent way to track the health of your customer base. There is software to help you do this at scale, so if you are at or near the many hundreds of customers mark, I hope you have that.
But, a surprising number of companies still do customer health scores manually, having their customer success managers handle the task. And an even more surprising number of companies aren’t managing or monitoring customer health at all. Ack, that’s hard for me to wrap my head around considering that when we launched our SaaS product, I instituted health scoring when we hit about 25 customers.
You need to retain and grow customers and you won’t be able to do it without keeping tabs on the state of your customers relationship with your product and your company.
Regardless of which approach you are using—software, manual or none at all—I believe you can’t manage a SaaS customer base of any size without a consistent process for this.  A customer health score simply takes several key metrics or activities and combines them into a single “score” to indicate the customer’s overall health.
Again, I am surprised how many companies aren’t doing this. It’s pretty easy to do, and if you approach it right, it’s  scalable as well. Here are some of my suggestions for customer health scores.
Decide on your customer health scoring criteria
What makes for a healthy customer, or an at-risk customer? What behaviors exist in these customers? What events or triggers can you see? Take a look at the various activity, actions and usage that indicate customer health. Here are some to consider:

* Customer pays (for freemium products)
* Customer uses product with X frequency
* Customer uses X feature(s)
* Customer account has X number of users
* Customer account includes multiple key stakeholders
* Customer account includes executive-level relationships
* Customer has desired outcomes met
* Customer is using support resources
* Customer is active participant in community
* Customer has explicitly stated their satisfaction (not a fan of this one, but…)

You can also include some “at risk” flag for scoring as well, for example:

* Lost customer stakeholder
* Lack of adoption of key features
* Business event occurred (such as customer being acquired or an executive team being replaced)
* No login in past X days

Don’t overcomplicate customer health scores
Pick no more than 3-5 metrics to determine your customer health score. Anything more than that will be untenable and unscalable to track. Make the score itself super simple—you can actually use a score, from 1-5, but I personally love red (at risk), yellow (unsure or midline), green (healthy) as indicators of health.
This is about a total picture of the customer in just a few metrics, so you need to pick your metrics wisely. That’s why companies can get paralyzed at this step. Which health metrics should they use to score? How should they weight each? Do they each need to be weighted the same? Do all metrics need to be objective or can some be subjective?
Don’t get into an extended debate about the perfect scoring approach—that’s wasted energy for little gain.
Just get started. Pick some key metrics, and then score the customer base. Take a look at the results. Do they seem accurate? Spot check some accounts you are really familiar with. Is the score representative of the customer’s health? If you score the customer base and then look at the results and they seem pretty accurate, then run with it. If they don’t seem right (somehow your most deeply adopted customer who just signed a 3-year renewal ended up with an “at risk” flag, for example),