How To Calculate Customer Success Margin in Bench | Arithmix

Customer success margin is a crucial metric that every business should track. It helps you understand the profitability of your customer base and the effectiveness of your customer success efforts. In this article, we'll explain what customer success margin is, why it's valuable to calculate, and how to calculate it in Bench.

What Is Customer Success Margin?

Customer success margin is the difference between the revenue generated by a customer and the cost of serving that customer. It's a measure of how much profit you're making from each customer after accounting for the expenses associated with acquiring, onboarding, and supporting them.

Calculating customer success margin requires you to understand the various costs associated with serving a customer. These costs can include sales and marketing expenses, customer support costs, and any other expenses related to delivering your product or service to the customer.

By tracking customer success margin, you can identify which customers are the most profitable and which ones are costing you money. This information can help you make better decisions about how to allocate your resources and prioritize your customer success efforts.

When Is It Valuable To Calculate Customer Success Margin?

Calculating customer success margin is valuable for any business that wants to maximize its profitability and optimize its customer success efforts. It's particularly valuable for businesses that have a recurring revenue model, such as SaaS companies or subscription-based businesses.

For these types of businesses, customer success is critical to retaining customers and generating recurring revenue. By calculating customer success margin, you can identify which customers are the most profitable and which ones are at risk of churning. This information can help you prioritize your customer success efforts and ensure that you're focusing on the customers that are most valuable to your business.

How to Calculate Customer Success Margin in Bench

Bench is a cloud-based accounting software that can help you calculate customer success margin. Here's how to do it:

1. Calculate the revenue generated by each customer over a specific period of time. This can be a month, a quarter, or a year, depending on your business model.
2. Identify the costs associated with serving each customer over the same period of time. This can include sales and marketing expenses, customer support costs, and any other expenses related to delivering your product or service to the customer.
3. Subtract the costs from the revenue to calculate the customer success margin for each customer.

Once you've calculated customer success margin for each customer, you can use this information to identify which customers are the most profitable and which ones are at risk of churning. You can then focus your customer success efforts on the customers that are most valuable to your business and ensure that you're maximizing your profitability.

In conclusion, calculating customer success margin is a valuable metric that every business should track. It helps you understand the profitability of your customer base and the effectiveness of your customer success efforts. By using Bench to calculate customer success margin, you can make better decisions about how to allocate your resources and prioritize your customer success efforts.

How Do You Calculate Customer Success Margin in Bench

Bench itself isn’t naturally geared towards letting you calculate complex metrics like Customer Success Margin. As an alternative, teams typically use products like Arithmix to import data from Bench and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Bench, combine it with data from other systems, and create calculations like Customer Success Margin.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Customer Success Margin in Arithmix

Calculating metrics like Customer Success Margin is simple in Arithmix. Once you've created your free account, you’ll be able to import your Bench data, and use it to create natural language formulas for metrics like Customer Success Margin.

Arithmix is designed to give you the power to build any calculations you want on top of your Bench data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.