Jonah Lopin is now a founder at Crayon and former VP of Customer Success at Hubspot. I recently had the chance to interview him about how he developed the Customer Happiness Index (CHI) for Hubspot’s internal use and how he uses it to maximize their customers’ engagement and success with their solution.

1. What is CHI and how is it calculated?

CHI is our Customer Happiness Index. It’s a play on the Chinese word 气, which means life force. It is a measure of the degree to which one of our customers is practicing inbound marketing in a way that is likely to lead to long-term success. Our customers with the highest CHI scores get the biggest lift in traffic and leads every month. These customers also give us the highest Net Promoter Scores and have the highest renewal rates.The CHI score is a function of many dimensions of a customer’s usage of Hubspot software for marketing. CHI awards points for customers who blog regularly, track leads through our system and run effective email and conversion campaigns, engage in social media, etc.

CHI is calculated based on how well a customer is doing inbound marketing. The inputs are not all created equal. We’ve analyzed thousands of customers over the years and determined which dimensions of inbound marketing are most highly correlated with success. Those dimensions are much more heavily weighted in CHI than others, and those are the things our marketing, sales, and services professionals teach our customers to do.

2. Why did you start measuring CHI?

We wanted a way to understand which of our customers were doing really well with our software, and which might need some more help to make inbound marketing work inside their organization. Surveying customers is a decent approach, but it’s expensive for us and a poor customer experience. We wanted something we could measure every day without bothering our customers with surveys.

3. How have you organized to facilitate customer success with Hubspot?

When new customers sign up, they work with one of our Inbound Marketing Consultants to implement our software and drive change in their organization throughout marketing, sales, and other departments. We also do a lot of teaching. Some of our customers are already experts in inbound marketing when they sign up, which is great. Other customers want to get a mini-education in inbound marketing from one of our experts. Either way, our Inbound Marketing Consultants work with our customers to get them the highest CHI score possible to drive traffic and leads and help them exceed their inbound marketing goals.

After the first few months of working with an Inbound Marketing Consultant, our customers work with our Account Management team and our Support team to drive further success.

4. How do you and your team use CHI daily, weekly, monthly, yearly at Hubspot?

We use CHI to see whether cohorts of customers are doing better or worse than the baseline. We use this approach to see whether experiments we may have tried in a given month are “working.” One could measure something like customer retention in this context, but then you’d have to wait a year or more to see how the cohort does. CHI gives us a valuable leading indicator to see whether changes in the business are having positive effects or not, so we know whether to double down or divest ourselves of those strategies.

Our consultants and account managers use CHI to see which customers are on track to get great results and which customers might need some additional help. It’s a powerful and efficient way to know where to invest our time to help customers the most.

5. What have been a few surprises as you have embarked on this effort?

One thing that surprised me a lot was how highly correlated some of our features are with customer success compared to others. All usage is “good” on some level, but when customers use our blog, for instance, that is a signal that they are much more likely to succeed than customers who simply engage in social media tracking. I was a bit surprised at the relative importance of certain dimensions of using our software in terms of predicting customer success compared to others. Some of those insights have had a big impact on how we run the business and how we drive customer success.

6. Anything negative? Any unexpected negative impacts on customers?

I’m happy to say that CHI has never harmed a customer or a kitten or been anything but a positive influence on our ecosystem.

7. What advice would you give to an organization looking to increase their customer success and reduce churn?

First, of course, you need to look at your contract terms, sales positioning, delivery team, the product, pricing and packaging, your target customer demographics, and a host of other big-picture issues. Beyond that, here is my step-by-step guide to using data to drive churn down:

  1. Measure as many dimensions of customer usage and engagement as you can, and relate those data points back to your customer record in your CRM system or your reporting engine.
  2. Use the data to identify segments of customers who exhibit important behaviors (outsize success, high NPS, retention characteristics, etc.)
  3. Run regressions to determine the most significant dimensions of usage and adoption and combine those factors to create a single score that is highly predictive of the behaviors from step 2. Consider calling your score CHI :).
  4. Now that you’ve got a good leading indicator of customer success, make changes in the business to try to drive CHI scores up. When you try something that works, keep doing it. When something doesn’t work, just try something else.

Thanks Jonah for your time and insight.

Read more:

3 Simple Steps for Reducing Customer Churn

How to Calculate the ROI of Personalization for Improving Customer Success

Creating Your Best Customer Experience with Evergage