Customer health scores explained: Strategies for success

Identifying at-risk customers before they churn is essential for long-term business growth. That’s where customer health scoring comes in. A customer health score helps businesses measure the strength of their client relationships, identify accounts that need attention, and proactively improve retention strategies.

For SaaS and service-based businesses, understanding customer health scores is about fostering engagement, delivering value, and ensuring clients achieve their desired outcomes.

In this guide, we’ll explore what a customer health score is, how to measure it, key metrics to track, and ways to improve customer success health scores. Plus, we’ll discuss how Moxo empowers businesses to enhance client engagement and build stronger relationships.

What is a customer health score?

A client/customer health score is a metric that helps businesses assess the overall status of their customer relationships. It provides insight into whether a client is thriving, disengaged, or at risk of churn. By tracking client health scores, businesses can take proactive steps to retain accounts and improve customer satisfaction.

Client health scores are based on a combination of engagement, product usage, support interactions, and overall satisfaction. Different businesses use different customer health scoring models, but the goal is the same: to predict customer behavior and take action before it’s too late.

Types of customer health scoring models

There are several ways businesses assign customer health scores, each with its advantages:

• Point-based scoring – Customers receive a numerical score based on weighted metrics, such as engagement, product usage, and feedback.
• Letter grading – Customers are categorized using a system similar to school grades (A, B, C, D, F), making it easy to interpret risk levels.
• Color coding – Customers are grouped into color-coded categories (green for healthy, yellow for neutral, red for at-risk) to provide a quick visual overview of account health.

Each model helps businesses quickly identify which customers need attention and which ones are in good standing. The key is to choose a system that aligns with the company’s goals and customer success strategy.

Why is it important to measure customer health score

Tracking customer health is not just a best practice – it’s a necessity for businesses that rely on retention and long-term relationships. A well-defined customer health score helps teams make informed decisions, reduce churn, and drive customer success.

Here’s why businesses should prioritize measuring customer health scores:

1. Early churn detection

Customers rarely leave overnight. There are warning signs – declining product usage, reduced engagement, and unresolved support issues. By monitoring client health scores, businesses can predict churn and take corrective action before losing valuable clients.

2. Improved customer engagement

A healthy customer is an engaged customer. When businesses track customer health scores, they can identify inactive accounts and re-engage them with personalized outreach, educational content, or proactive support.

3. Smarter resource allocation

Not all customers require the same level of attention. Client health scores help customer success teams focus on high-value accounts that need immediate assistance, ensuring resources are allocated efficiently.

4. Stronger upsell and expansion opportunities

Clients with high health scores are prime candidates for upsells, cross-sells, renewals, and expansion. Tracking health scores allows businesses to identify these opportunities and position their offerings accordingly.

5. Better customer experience and loyalty

A proactive approach to customer health improves overall satisfaction. By addressing pain points before they escalate, businesses create a positive experience that fosters long-term loyalty.

Customer health score is more than just a metric – it’s a powerful indicator of customer satisfaction, engagement, and long-term retention. It helps businesses proactively identify risks, seize growth opportunities, and build stronger relationships by understanding customer needs in real-time.

Key metrics to measure customer health score

Customer health scoring is only as effective as the data behind it. Businesses need to track the right metrics to get an accurate picture of customer engagement and satisfaction. While the exact metrics may vary by industry, the following are commonly used metrics to assess customer health:

1. Product usage and adoption

• Login or usage frequency
• Number of key features utilized
• Duration of active sessions
• Expansion of usage over time (e.g., adding new users or increasing feature adoption)

Customers who actively use a product are more likely to renew and expand their engagement, while declining usage can signal disengagement.

2. Engagement and interaction

• Response rates to emails or messages
• Participation in training sessions, webinars, or community events
• Number of support tickets submitted vs. resolved
• Direct feedback from customer surveys

High engagement levels indicate strong interest, while a drop in activity can be a red flag for potential churn.

3. Customer support interactions

• Number of open and resolved support tickets
• Response time for resolving customer issues
• Customer satisfaction (CSAT) scores from support interactions
• Frequency of escalations to higher support tiers

Frequent unresolved support issues can lower client health scores, while quick resolutions and high CSAT scores contribute to a positive customer experience.

4. Customer sentiment and feedback

• Net Promoter Score (NPS) – measures customer loyalty based on likelihood to recommend
• Customer Satisfaction Score (CSAT) – reflects satisfaction with specific interactions
• Reviews and testimonials – qualitative insights into customer sentiment

Tracking these sentiment-based metrics provides a clear picture of how customers perceive your product or service.

5. Contract renewal and payment history

• Subscription renewal rates
• Payment consistency and delays
• Expansion or downgrades in contract size

Customers who frequently renew and expand their contracts are in good health, whereas late payments or service downgrades indicate dissatisfaction.

6. Customer success milestones

• Achievement of onboarding goals
• Completion of key training or certification programs
• Implementation of recommended best practices

A customer’s progress toward success milestones can indicate long-term potential and value realization.

By combining these client health score metrics, businesses can create a comprehensive score that accurately reflects engagement, satisfaction, and retention risk.

How to calculate a customer health score

Calculating a customer health score involves combining multiple metrics into a single, actionable score that reflects the overall health of a customer relationship. While the exact formula varies by business model, the process generally follows these steps:

1. Identify key metrics to track

Start by selecting the most relevant metrics for your business. These may include product usage, engagement, support interactions, NPS scores, and payment history. The goal is to ensure that the score is data-driven and reflects meaningful customer behavior.

2. Assign weightage to each metric

Not all client health score metrics carry the same importance. For example, a SaaS business may prioritize product usage over support tickets, while a professional services firm may focus more on engagement levels. Assign a percentage weight to each metric based on its impact on customer retention.

Example of a weighted scoring model:

• Product usage: 30%
• Engagement: 20%
• Customer support satisfaction: 20%
• NPS score: 15%
• Payment history: 15%

3. Normalize the data

Since different metrics are measured on different scales, it’s important to standardize them. This can be done by converting each customer health metric into a common range, such as a scale from 0 to 100.

For example, if product usage is tracked on a scale of 1 to 10, it can be converted to a percentage:

Formula: (Current usage / Maximum possible usage) × 100

4. Calculate the weighted score

Once all metrics are normalized, apply the weightage to each and sum them up to get the final customer health score.

For example, if a customer has:

• Product usage: 80/100 (weighted at 30%) → 24 points
• Engagement score: 70/100 (weighted at 20%) → 14 points
• Support satisfaction: 90/100 (weighted at 20%) → 18 points
• NPS score: 60/100 (weighted at 15%) → 9 points
• Payment history: 100/100 (weighted at 15%) → 15 points

Customer health score = 24 + 14 + 18 + 9 + 15 = 80/100

5. Define score categories

Once the client health score is calculated, businesses should establish clear thresholds for different customer statuses. A simple classification could be:

• 80-100: Healthy (engaged, likely to renew)
• 50-79: At risk (some engagement, needs attention)
• 0-49: Critical (high churn risk, immediate intervention needed)

Alternatively, businesses can use letter grading (A- F) or color coding (green, yellow, red) for easier interpretation.

6. Automate tracking and updates

Customer health scores should be dynamic and updated regularly. Using CRM and customer success platforms to automate this process ensures key stakeholders receive real-time insights and can take timely action when necessary.

By consistently measuring and refining the health score calculation, businesses can proactively manage customer relationships, reduce churn, and drive long-term success.

How customer success teams can use customer health scores

A customer health score is a strategic tool that helps customer success teams proactively manage relationships, reduce churn, and maximize lifetime value. By leveraging health scores effectively, teams can implement targeted interventions and enhance the customer experience.

1. Prioritizing at-risk customers

Customers with declining health scores need immediate attention. By identifying early warning signs – such as decreased product usage or poor support satisfaction – customer success teams can step in before dissatisfaction leads to churn.

How to take action

• Reach out with personalized check-ins
• Offer additional training or resources to boost engagement
• Investigate recurring issues and escalate solutions

2. Enhancing customer engagement

For customers showing moderate health scores, engagement strategies can help prevent further decline. Encouraging customers to interact with key features, participate in training sessions, or attend webinars can reinforce value.

How to take action

• Send tailored content based on usage patterns
• Schedule proactive strategy sessions to realign goals
• Offer incentives for engaging with new features

3. Identifying expansion and upsell opportunities

Customers with high health scores are prime candidates for upselling and contract expansion. If a customer is actively using the product, achieving key milestones, and providing positive feedback, they may be ready for premium features or expanded services.

How to take action

• Introduce relevant upsell opportunities during check-ins
• Offer exclusive benefits for high-value customers
• Leverage testimonials from similar customers to demonstrate added value

4. Strengthening renewal strategies

Tracking client health scores over time can help customer success teams predict renewals. A steady or improving health score signals a strong likelihood of retention, while a declining score indicates the need for intervention before the contract term ends.

How to take action

• Initiate renewal discussions early for healthy customers
• Offer customized retention plans for at-risk accounts
• Reinforce ROI by highlighting success metrics before renewal discussions

5. Aligning customer success with other teams

Customer health scores provide valuable insights that extend beyond the customer success team. Sales, product development, and marketing teams can all benefit from these insights to improve overall business performance.

How to take action

• Sales teams can use client health scores to tailor pitches and highlight relevant success stories
• Product teams can identify feature gaps based on common issues among low-scoring customers
• Marketing teams can refine messaging based on the behaviors of high-scoring customers

By incorporating customer health scores into daily operations, customer success teams can take a proactive, data-driven approach to building strong, lasting relationships.

How Moxo helps businesses improve customer health scores

A strong customer health score depends on seamless communication, proactive engagement, and a frictionless customer experience. Moxo’s service orchestration platform helps businesses strengthen client relationships by enabling structured workflows, real-time collaboration, and high-touch customer interactions – all essential for improving customer health scores.

1. Streamlined client interactions for higher engagement

Moxo provides a centralized client portal where businesses can manage all customer interactions in one place. Businesses can keep client engagement levels high by making it easy for customers to ask questions, submit documents, and track progress.

How this impacts customer health

• Increased customer participation through real-time messaging and guided workflows
• More opportunities for proactive outreach and issue resolution
• A frictionless experience that keeps customers engaged and reduces churn risks

2. Proactive support and issue resolution

Slow response times and unresolved issues negatively impact customer health scores. With Moxo’s structured workflows and automated notifications, customer success teams can resolve concerns faster and prevent small issues from escalating.

How this impacts customer health

• Faster response times and improved resolution rates
• A more transparent support experience, reducing customer frustration
• Automated follow-ups to ensure continued customer satisfaction

3. Personalized onboarding and training

The customer health score declines when users struggle with onboarding. Moxo’s platform enables businesses to create personalized onboarding experiences with step-by-step guides, task tracking, and automated check-ins.

How this impacts customer health

• Ensures customers receive the right training at the right time
• Reduces friction in the onboarding process, improving initial adoption
• Helps customers reach success milestones faster, increasing long-term retention

4. Data-driven insights for proactive success strategies

Moxo allows businesses to track customer interactions and engagement trends, providing valuable data for customer success teams. These insights help identify at-risk accounts before problems arise and highlight opportunities for upsells or expansions.

How this impacts customer health

• Businesses can spot disengagement trends early and intervene proactively
• Customer success teams have data-driven insights for personalized engagement
• High-value customers can be nurtured toward expansion opportunities

5. Secure and compliant communication for long-term trust

For businesses handling sensitive data, maintaining trust is critical. Moxo ensures all customer interactions are secure, compliant, and auditable, reducing the risk of miscommunication or compliance issues that could negatively impact customer relationships.

How this impacts customer health

• Strengthens customer trust with a secure, all-in-one communication platform
• Reduces friction by offering a seamless, compliant collaboration experience
• Ensures customer concerns and documents are handled with transparency and security

Moxo helps businesses improve client health scores through automation, engagement, and proactive customer success strategies. With structured workflows and a centralized client hub, businesses can foster stronger relationships, increase retention, and ensure long-term customer success. 

Ready to improve your customer health score? Schedule a demo to learn how!

Conclusion

A customer health score is a powerful tool for predicting retention, reducing churn, and maximizing customer success. By tracking key indicators like product usage, engagement, support interactions, and customer sentiment, businesses can take a proactive approach to managing client relationships.

A well-designed health score enables customer success teams to:

• Identify at-risk customers before they churn
• Strengthen engagement with personalized outreach
• Pinpoint expansion and upsell opportunities
• Improve renewal rates through data-driven retention strategies

However, measuring customer health is only the first step. To truly improve customer relationships, businesses need the right tools to drive engagement and streamline interactions. Moxo provides a comprehensive solution that helps businesses enhance communication, automate workflows, and proactively manage customer success, resulting in stronger customer health scores and long-term client retention.

Ready to improve your customer health score? Schedule a demo to learn how!

FAQs

What is a customer health score?

A customer health score is a metric that helps businesses evaluate the strength of their customer relationships by analyzing engagement, product usage, support interactions, and satisfaction levels.

Why is customer health scoring important?

Customer health scores help businesses identify at-risk customers early, improve engagement, optimize resource allocation, and increase retention rates, thereby providing valuable insights for customer success teams.

How can businesses improve their customer health scores?

Businesses can improve customer health scores by enhancing onboarding, increasing engagement through proactive outreach, resolving support issues quickly, and ensuring customers reach their desired outcomes.

How does Moxo help businesses improve customer health scores?

Moxo streamlines customer interactions with structured workflows, proactive communication, and automated client engagement, helping businesses reduce churn and strengthen customer relationships.

What’s the best scoring model for customer health?

The best client health score model depends on the business. Point-based systems, letter grading, and color-coded categories are commonly used. The key is to choose a model that aligns with customer success goals and provides clear insights.