How HubSpot Reduces Churn By Increasing Their CHI (Customer Happiness Index)

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HubSpot All in one Inbound Marketing Software

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Jonah Lopin, VP of Customer Success at

HubSpot⁠

, defines the company’s Customer Happiness Index, or CHI, as “a measure of the degree to which [a customer] is practicing inbound marketing in a way that is likely to lead to long-term success.”

CHI is a play on the Chinese word 气, which means life force, and is a great indication of not only how much a customer will benefit from HubSpot but also how happy they’ll be with the service and how likely they are to renew.

The Research

HubSpot calculates customer acquisition costs (CAC) by dividing the amount spent on Smarketing (

according to HubSpot’s Dharmesh Shah⁠

, the total cost of sales and marketing) by the total number of customers, as shown in the equation below.

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image source⁠

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For a company to succeed, customer acquisition cost must be less than

customer lifetime value⁠

(the amount he or she pays throughout their time as a customer), otherwise customers are costing rather than contributing to revenue. Lowering acquisition costs is one way to lessen the burden, but lowering churn is also critical, as the longer customers stick around the more they end up paying in subscription fees.

Because churn is a complicated metric, HubSpot wanted to implement a more concrete measure of customer success. It’s not good enough for customers to merely stay subscribed, especially when plans that lock customers in for six months or a year can make it hard to measure satisfaction based on churn alone, and by the time a customer cancels or unsubscribes, it is often too late. Yet customer satisfaction is critical to keeping churn low.

The Execution

Rather than looking at churn alone, HubSpot uses their Customer Happiness Index as a more holistic representation of success. CHI is calculated based on several factors, including how frequently customers blog and track leads through HubSpot’s system, whether they run email and conversion campaigns, whether they engage in social media, and more. These inputs are weighted according to HubSpot’s analysis of thousands of customers over years.

Any time a new customer signs up for HubSpot, they’re assigned an Inbound Marketing Consultant who will help implement the software and work with them for the first few months of using HubSpot. Though many customers are familiar with inbound marketing, others are starting from scratch, and HubSpot offers a mini-education in inbound marketing to help customers achieve the highest CHI score possible. Regardless of age or experience, each customer receives a personalized monthly account review, the goal of which is to help them get as much out of their subscription as possible.

Tracking the CHI scores of their customers not only allowed HubSpot to keep around

33% of previously unhappy customers⁠

, but

Lopin also explains⁠

that customers who implement inbound marketing according to HubSpot’s guidelines “get double digit increases in leads every month.”

Why Did This Happen?

HubSpot uses CHI as a gauge of how much value the service is delivering—a critical component to lowering churn.

CHI not only serves as an indicator of which individual customers might need additional help, but it’s also a broader guide as to which of HubSpot’s strategies are working well and which ones are not, giving the company insight into broader, company-wide changes that can be made to increase happiness and reduce churn.

Actionable Advice

To identify the factors that contribute to customer happiness, measure as many dimensions of usage and engagement as possible. Identify the segments with the highest success based on satisfaction, engagement, retention, or another metric that matters to you.

Run regressions to identify which factors contributed to the success of your power users, and combine them to create a scale or score that predicts whether or not other customers will be successful.

Make changes to your acquisition, onboarding, support, and more to drive that score up for each and every customer.

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Source⁠

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