Why we need a new approach to customer retention KPIs

I’ve been at Indeed for over 10 years, working in customer success (CS) and revenue, and I’ve learned a lot about how quickly things can change – especially when it comes to retention and the KPIs we use to measure it.

Right now, the landscape is… a little weird. The economy is pretty unpredictable, which makes it all the more pressing for people to find new jobs. Naturally, this means there’s a lot of competition for job advertisers like Indeed.

At the same time, businesses are tightening their purse strings, and our customers are doing the same. So just like we’re all being asked to do more with less, our customers are asking us to do more with less. That creates a really interesting dynamic.

Customer success is a critical part of that equation. Growing and retaining existing customers is just as important – and often cheaper – than acquiring new ones. But to meet the modern demand we’re all facing, our metrics have to evolve too.

The two biggest challenges in modern customer success metrics

Too many KPIs and not enough focus

One of the biggest challenges in modern CS is simply the volume of metrics available.

There’s no shortage of KPIs you could track. Most teams have seen long lists and probably use several of them to guide their teams. But the reality is that the list can get really long, really fast.

The more metrics you ask a team to focus on, the harder it becomes to prioritize what actually matters.

Instead of goaling teams on five or ten different things, it’s worth challenging yourself to focus on just the one (or two, max.). Not because the others don’t matter, but because focus drives clarity – and clarity drives impact.

Why traditional retention metrics no longer work

The definition of retention is also changing.

It’s not enough to say, “The client was spending last year, and they’re spending again.” That’s too simplistic for the world we’re operating in now.

Customers are more informed than ever. There are entire guides online showing people how to lower the cost of the products they use. If customers are actively learning how to reduce the value of what they’re paying for, that’s a signal that something deeper is happening.

So retention today isn’t just about "keeping" a customer. It’s about retaining the user, retaining their spend, and then growing that spend.

If you're reading this and thinking, "That’s a lot to ask from a CS team,"  I wholeheartedly agree. But it’s the reality we’re operating in.

Understanding the complexity of today’s customer success model

At Indeed, we help people get jobs. That’s the reason we exist. In customer success, that translates to helping employers reach their hiring goals. We try to keep it as simple as possible.

But even with that simplicity, the operating model is complex. We support customers across multiple products – employer branding, job advertising and candidate sourcing, and recruitment automation. That means CS operates in an environment that’s both adoption-based and consumption-based.

On top of that, at Indeed, we don’t require contracts; our customers can leave at any time they choose. So, every single day, our CS teams have to consistently prove the value of the product and the value they’re adding. That raises an important question: how do you goal teams in an environment like that?

4-step framework for setting better customer success KPIs

1. Keep your KPIs simple and tied to business value

This is the mantra: keep everything simple.

KPIs should be relevant to your business and directly tied to the problems your product is solving. At Indeed, that comes back to helping people get jobs. The more customers use the platform effectively, the more likely job seekers are to find work.

There’s a reason the phrase “if everything is a priority, nothing is a priority” comes up so often – it’s true.

Shifting from a large set of metrics to a few high-quality ones makes a difference. Those metrics should be easy to understand and usable across performance management, enablement, and compensation.

If someone has to work through a complex formula just to understand their performance or their bonus, that’s a big problem. The simpler the system, the more focus your team can put on driving value.

2. Define the actions that drive KPI success

Keeping things simple doesn’t mean ignoring everything else. There are always underlying actions that drive your top-line KPI. The question is whether those should be goals or guidance.

Metrics like CSAT, adoption, or engagement cadence can give you directional insight into performance. They help explain outcomes, even if they’re not what you directly goal teams on.

At Indeed, we think about these as benchmarks.

For example, higher product usage, deeper feature adoption, or consistent engagement patterns often correlate with stronger retention and higher spend. We don’t necessarily set goals on these, but we make them visible and show how they connect to the primary KPI.

That way, teams understand what good looks like without being overwhelmed by too many targets.

3. Focus on proactive metrics, not just reactive ones

Not all metrics are equally useful.

Reactive metrics – like CSAT or NPS – tell you how a customer feels after something has already happened. By that point, it’s often a little too late to change the outcome.

Proactive metrics, on the other hand, help you anticipate what’s coming.

Think about how triage works in a hospital setting. It’s not just about asking what’s wrong – it’s about checking underlying signals to catch issues early.

In customer success, that means looking at things like customer health scores, predictive churn indicators, and triggers that prompt action. These help teams understand where to focus before problems become critical.

They give direction. They help answer the question, Where should I be spending my time?

4. Iterate, test, and align across the business

Setting KPIs isn’t a one-and-done exercise.

The starting point is your data. Look at everything you have, identify where you’re strong, and focus on areas where there’s room to improve. There’s no value in optimizing for something your team is already crushing.

It’s also important to focus on what’s controllable. If your team is measured on a KPI beyond their influence, it will, understandably, create frustration and reduce accountability.

Alignment across teams is just as critical. Sales, marketing, product, and CS all need to be aligned on what matters and why. Without that, you risk working toward conflicting goals.

Transparency helps reinforce that alignment. When performance is visible across the organization, it drives ownership.

And finally, iteration has to be part of the culture. Gather feedback, test changes with smaller groups, and refine before rolling anything out broadly. Learning from what doesn’t work is just as important as building on what does.

Managing complexity without losing focus

Even with a clear approach, complexity can build over time.

It’s easy to end up with way too many tools, too many reports, and too many places to look for information. When that happens, teams spend more time navigating systems than actually driving outcomes.

Simplification at the operational level matters just as much as simplification at the KPI level. Consolidating tools and reducing noise helps teams stay focused on what actually drives results.

And it’s worth acknowledging – no organization gets this perfectly right. This is an ongoing evolution.

Bringing it all together

At its core, setting KPIs in customer success comes down to a few key ideas:

• Keep it simple
• Give your team a clear blueprint of what good looks like
• Focus more on proactive metrics than reactive ones
• Iterate, test, and keep improving

When you get this right, teams are better positioned to drive retention, grow customer value, and operate with real accountability. And in a landscape that’s constantly changing, that clarity is what makes the difference.

This article has been adapted from Matthew’s talk at Customer Success Summit New York 2024. Watch the full version, and other talks from our NYC Summit, with a Pro+ membership.

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