How to Build Health Scores That Actually Predict Churn and Drive Growth

If you're in Customer Success, you've probably heard the term "Health Score" tossed around more times than you can count. And if we're being honest, it's one of those concepts everyone talks about—but few truly leverage to its full potential.

Most companies either overcomplicate their health scores with dozens of conflicting data points or oversimplify them to the point of uselessness. The result? A score that doesn’t really mean anything—and certainly doesn’t help you predict anything.

But here’s the truth: When done right, a well-built Customer Health Score is one of the most powerful tools you have. It can alert you to early signs of churn, flag accounts ready for expansion, and help your team work smarter, not just harder.

Let’s break down how to actually build one that works.

Why Health Scores Matter More Than Ever

Customer Success has shifted from reactive to proactive. And to be proactive, you need data—specifically, data that helps you identify risk before it becomes a problem.

A Health Score does exactly that. It's your real-time dashboard for customer health: where things stand, where they’re headed, and what you should do next.

When tied to smart playbooks and processes, health scores drive action. And that’s the key—they’re not just a reporting metric. They’re a decision-making tool.

The 3 Pillars of a Great Health Score

There’s no one-size-fits-all formula, but the most effective health scores are built on three essential categories:

1. Product Usage

Are your customers using the product in a meaningful way?

It’s not about how often they log in—it’s about how they use it. Are they adopting the features that deliver value? Are key users active? Are they getting closer to their goals?

Metrics to track:

• Adoption of core features

• Frequency of meaningful actions (not just logins)

• Usage trends over time

• Breadth of usage across teams or roles

  
  

A drop in product engagement is often the first sign of trouble.

2. Support Signals

How often are customers reaching out for help—and what’s the quality of those interactions?

Too many support tickets can point to product friction. But a total lack of engagement might be a red flag too. The right support metrics can reveal what your customers won’t say directly.

Look for:

• Volume of support tickets per account

• Time to resolution

• Reopened or escalated issues

• Sentiment from recent interactions

  
  

This data gives valuable context to usage patterns and shows where customers might be struggling.

3. Customer Engagement

This is the qualitative side of the equation. How invested is the customer in the relationship?

It’s about more than usage or tickets—it’s about engagement from champions, decision-makers, and users across the organization.

Ask yourself:

• Are stakeholders attending check-ins or QBRs?

• Are they involved in planning and goal-setting?

• Have there been org changes that affect your relationship?

• Is there visible buy-in from leadership?

  
  

This is where strong CSM intuition comes into play—and why health scores should never be purely automated.

Best Practices for Building Actionable Health Scores

Building a health score isn’t a one-time task—it’s a living model that should evolve with your business. But to get started, follow these principles:

Keep It Simple (at First)

You don’t need 15 metrics from five tools. Start with 3–5 indicators across the categories above. Focus on what actually impacts customer outcomes.

Weight the Metrics Thoughtfully

Not all signals are equal. For example, a drop in product usage might be more critical than a slightly lower CSAT score. Use weighted scoring to reflect real-world impact.

Tie Scores to Playbooks

What happens when a customer turns red or yellow? The answer shouldn’t be “we wait.” Connect health scores to specific actions—like scheduling an EBR, escalating to a manager, or reviewing the success plan.

Customize by Segment

Don’t use the same scoring model for a low-touch SMB account and a strategic enterprise customer. What “health” looks like will vary across segments.

Revisit and Refine

Treat your health score like a product. Reassess it regularly. Does it actually predict churn? Are your green accounts renewing? Are your red accounts leaving? If not—iterate.

Common Pitfalls to Avoid

Even good intentions can go off track. Here are three health score mistakes to watch out for:

• Overengineering: If the score is so complex no one understands it, no one will trust it.

• Only using lagging indicators: NPS and churn data are helpful—but they come after the problem. You need leading indicators.

• Ignoring CSM input: Your team knows your customers best. Build space for their qualitative feedback into the score.

  
  

How to Get Started This Week

You don’t need a full analytics stack to begin. Start with one pillar and build from there.

Try this: Pick one metric you can track today—like “% of customers using at least 3 core features weekly”—and monitor it across accounts.

Once you’ve validated its usefulness, layer in support and engagement data. Over time, your model will evolve into a strategic asset.

Final Thoughts

A good Customer Health Score isn’t just a nice-to-have—it’s the foundation of any proactive Customer Success strategy.

It empowers your team to prioritize effectively, intervene early, and create a consistent customer experience across the board. It turns anecdotal risk into measurable insight. And it gives your company the ability to scale customer success with confidence.

Build it right, refine it often, and tie it directly to action—and you’ll turn your health score from a dashboard into a growth engine.