For companies with SaaS product offerings - Customer Heath Scoring is about find out deeply is the customer engaged with its product. Generally, the deeper the customer’s engagement - the higher the score they have.

Customer Health Scoring is segmenting the customer based on their engagement with your product.  Knowing the level of engagement is invaluable as it enables putting in targeted programs relevant to that segment of users.  for example, if the score is low, retention programs should be implemented as retaining a customer is 5 times cheaper that acquiring a customer. On the flip side if it is a very high score consider using that customer as a reference.