How To Calculate Customer Success Margin in Freshservice | Arithmix

Calculating customer success margin is an important aspect of any business that wants to measure the effectiveness of its customer success efforts. In simple terms, customer success margin is the difference between the revenue generated by a customer and the cost of acquiring and servicing that customer. It is a metric that helps businesses understand the value they are providing to their customers and the profitability of their customer success efforts.

What Is Customer Success Margin?

Customer success margin is a metric that measures the profitability of a customer over their lifetime. It takes into account the revenue generated by the customer and the cost of acquiring and servicing that customer. The revenue generated by the customer includes all the money the customer has spent on the business, including purchases, subscriptions, and renewals. The cost of acquiring and servicing the customer includes all the expenses incurred by the business in acquiring and retaining the customer, including marketing, sales, support, and account management costs.

Calculating customer success margin is important because it helps businesses understand the value they are providing to their customers. If the customer success margin is positive, it means that the business is generating more revenue from the customer than it is spending on acquiring and servicing that customer. This is a sign that the business is providing value to the customer and is profitable. If the customer success margin is negative, it means that the business is spending more on acquiring and servicing the customer than it is generating in revenue. This is a sign that the business needs to improve its customer success efforts or reconsider its customer acquisition strategy.

When Is It Valuable To Calculate Customer Success Margin?

Calculating customer success margin is valuable for any business that wants to measure the effectiveness of its customer success efforts. It is particularly valuable for businesses that operate on a subscription-based model or have a high customer acquisition cost. In these cases, it is important to understand the profitability of each customer to ensure that the business is generating a positive return on investment.

Calculating customer success margin is also valuable for businesses that want to identify opportunities to improve their customer success efforts. By understanding the profitability of each customer, businesses can identify which customers are the most valuable and focus their efforts on retaining and growing those customers. They can also identify which customers are the least profitable and consider whether it is worth continuing to invest in those customers.

In conclusion, calculating customer success margin is an important metric for any business that wants to measure the effectiveness of its customer success efforts. It helps businesses understand the value they are providing to their customers and the profitability of their customer success efforts. By understanding customer success margin, businesses can identify opportunities to improve their customer success efforts and focus their resources on the most valuable customers.

How Do You Calculate Customer Success Margin in Freshservice

Freshservice 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 Freshservice 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 Freshservice, 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 Freshservice 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 Freshservice 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.