Five Ways Customer Education Impacts Your Bottom Line
Is it worth investing in Education offerings for your customers?
Customer Education has a much larger impact on the success of your business than counting ‘butts in seats’. How can Customer Education impact your bottom line? Below are five key ways that Customer Education makes a difference.
1. Shorter Sales Cycle
Is it training? Is it marketing? “Free” self-paced offerings are a valuable lead generator.
Providing some Education offerings at no charge to prospects is a good investment in time and resources. Educated prospects become highly qualified leads, and highly qualified leads are more likely to buy your products.
I used this approach at two companies where I launched Customer Education programs.
At SugarCRM, a commercial open source customer relationship management software company, we provided free self-paced eLearning for prospects.
At conferences, prospects and customers excitedly told us how helpful the training videos were. They were even excited to meet me in person after hearing my voice on the videos! Sales reps found the prospects were highly qualified and ready to buy since they conducted their self-study of the product with the product evaluation.
At Jaspersoft, we provided a freemium eLearning library, the Online Learning Portal. The free offerings aligned with what the Marketing team wanted to promote. Sales reps provided free coupons for a 30-day subscription to the Online Learning Portal to coincide with the product evaluation. Not only did this reduce the sales cycle, it also decreased the need for valuable resources like Sales Engineers to deliver the basics product demos.
The impact of free training: Prospects leverage training offerings to quickly ramp up on your free product trial, resulting in highly qualified leads and shorter sales cycles.
2. Customer On-boarding
Do you measure your customer time to implementation? It’s a good metric to have. Depending on your product, those first 30 - 90 days of your customer lifecycle are critical for ensuring that customers are successful and renew.
Service Source found that if a customer doesn’t become loyal in 90 days, their renewal likelihood could drop to as low as 10%.
What are you doing to ensure customers are on-boarded? Have you created and communicated key milestones for customers to meet in those first 30, 60, 90 days? Does your Customer Education offerings provide hands-on skill and best practices to ensure product adoption? Or, do you hope they figure it out on their own and leave you alone?
Leverage your Education offerings and Customer Success Managers to get your customers quickly trained and then work to meet key milestones in the first 90 days. Then, measure whether your trained customers have a shorter on-boarding time.
3. Customer Lifecycle
While on-boarding training is critical, don’t stop there. At my previous company, we leveraged Education throughout the customer lifecycle.
We encouraged customers that bought Professional Services to train the Project Team before the consultants started their project. This allows the Consultants to leverage their technical expertise (and not have to go over the basics again and again). It also enables the customers to have a good foundation of product knowledge leading to a deeper dive into their customizations with the Consultants.
Once the developers are trained, next up is usually the administrators to build out the user types, users, and permissions. About two weeks before the end users get their hands on the go-live product, it’s a good time to get them trained.
After the initial roll out, there might be ongoing training for new hires, especially if there is a lot of churn in certain roles, and then staying up to date on the new releases.
A typical engagement might look like this:
4. Customer Support
Often times, “How To?” questions makes up the biggest bucket of your Customer Support team. Does your Support team tracks this data? It's interesting to find out where customers are getting stuck and then determine whether your Education offerings address these issues.
Rather than engaging individual Support agents to go over the basics, Customer Education provides and scales the general information to customers.
Because each ticket logged is expensive, Educated customers cost your company less. In addition, companies may see a dramatic drop in the support queue or time to close a case. Some companies even require the Support authorized contacts take on-boarding Education before they can log their first case.
At SugarCRM, we found that the while the support queue was smaller, some cases actually took longer to close. The reason: Customers got their basics answered through Education, and logged more complex cases with Support because they used the product more deeply. This can actually benefit the Support agents by keeping them engaged and challenged.
At a previous company, we found that the more engaged customers were, the more likely they were to renew. So it’s important to remember that customers that log cases are engaged; it’s the customers that don’t log cases that are a real flag.
5. Customer Health, Satisfaction, and Renewals
Of course you want your customers to renew, and the renewal rate is likely your most important metric. You’d think that I would put it at the top of the list. However, customer satisfaction and renewals metrics are lagging indicators; which means that you may not know the impact of your Education offerings for several months or even years until the renewal date comes up.
Customer satisfaction and renewals are also the product of what has come before, if your customers were onboarded properly and received the Education they needed through their implementation and beyond.
At a previous company, we measured customer health scores, NPS and renewal rates, and found that educated customers had a 15% higher NPS, and were 20% more likely to renew. While it took time to finally gather these metrics, and they showed the full impact of Educated customers on the business bottom line.
Start With Baseline Metrics
Investing in Customer Education provides a real value for your customers and the success of your company. Take the time to get baseline metrics before you implement your Customer Education program, and then measure the impact along the way of prospects, on-boarding, customer lifecycle, support, satisfaction, and renewals.