EDITOR’S NOTE: Occasionally, we invite learning community experts to share their advice with our readers. Today we feature a post by Adam Avramescu, Head of Customer Education & Training at Checkr and Co-Founder of the CELab blog/podcast. He also authored the new book, Customer Education: Why Smart Companies Profit by Making Customers Smarter.
Are you thinking about starting a customer education program?
Perhaps you want to support broader customer success or marketing strategies. Or maybe your support team spends so much time training customers that a dedicated position seems justified. Or possibly you want to differentiate yourself from competitors who might otherwise beat you to the punch. These are all valid reasons to offer standardized customer education.
As a specialist in this discipline, I’m seeing increased interest from organizations of all types, especially startups. It’s a smart move. Why? Because early investment in customer education helps young companies scale successfully.
My industry colleague, Dave Derington, agrees. In fact, we believe most organizations start too late. That’s why we recently launched Customer Education Lab – a website that helps professionals connect and share ideas about how to structure, launch and manage customer training and education.
In our first podcast episode, we discussed key factors to consider as you lay the groundwork for this function. Specifically:
1) When to invest in a customer education program
2) How to win support from executives
3) What to expect after launch
4) How to get started
To help you dig deeper, I’ve also outlined each of those topics below…
1) When to Invest in a Customer Education Program
RSVP FOR THIS JANUARY WEBINAR NOW!
Many companies are operating in an ad-hoc prison that seems hard to escape. We call that “Ad-Hoc-Atraz.” Everyone provides their own version of training – from account managers and project leads to customer service managers and support reps. No two people use the same materials. And they redesign and customize training content every time.
Why is this such a common issue? Limiting beliefs are often the primary culprit. For instance:
“There’s not enough time.”
Everyone is so busy creating custom training for each customer, no one takes the time to develop standard materials. We would argue that you don’t have enough time not to invest in standardized training. Your team is actually wasting precious time answering the same questions and delivering the same core content over and over. If you take this burden off of each individual’s back, they can focus on issues that truly need custom solutions.
“We’re providing white-glove service by customizing everything.”
This is a commonly held belief in startup settings, but it usually isn’t true. You may be responding to whatever customers say they want, but it may not always be what they actually need. This puts your team in an endless reactive mode where they’re continuously taking orders, but not truly partnering with your customers.
“Our CSM should be able to do it all. They are our trainers.”
Think about that. Most likely you hired your CSMs and account managers for their relationship management or project management skills. Some may be phenomenal at delivering training, but unless you hired them specifically to document and facilitate training, you can’t expect them to be good at customer education tasks. In fact, they may not even enjoy these tasks, but they inherited the responsibility by default.
Startups shouldn’t expect to roll-out a full-scale customer education function on Day 1. But once your organization has hired more than a few CSMs, you’ll want to get ahead of “Ad-Hoc-Atraz” by delivering customer education in a consistent and scalable way.
How do you know if you’re ready? Calculate your all-in CSM headcount or cost-per-ticket totals for a specific timeframe. Then estimate the dollar value of the time your people spend on ad-hoc documentation and training during that same time interval. The total may very well be more than the cost of a full-time resource, already.
2) How to Win Support From Executives
REPLAY THIS WEBINAR NOW!
If you’re making a business case for customer education, we encourage you to speak the same business language your board uses. For example, many SaaS (Software as a Service) businesses focus on CAC/LTV ratio — (Customer Acquisition Cost vs. Customer Lifetime Value).
In contrast to selling on-premise software or other types of products in an upfront purchase transaction, SaaS models are usually based on subscription payments that accrue over time. This means vendors spend more on marketing and sales to acquire a customer than they actually receive at the start of a relationship.
In other words, SaaS companies must continue delivering value over the life of each customer, so total investment in their product increases over time. Ideally at some point, they earn back the money spent on CAC – and hopefully much more. Jason Cohen’s “smart bear” blog effectively illustrates this concept:
Although your senior executives may not care exactly how many hours of training you deliver or what kind of customer satisfaction scores you receive, they do care about your CAC/LTV ratio. They may also care about your product’s Time to First Value (TTV) for new customers. And they almost certainly care about your overall customer retention, customer expansion and churn numbers.
This means your customer education charter should be to help drive these metrics at scale, by enabling customers to adopt and use your product successfully in their space.
Luckily, there are industry benchmarks to help you establish some objectives. For example, research from the Technology Services Industry Association (TSIA) found that trained customers are:
- 68% more likely to use a product more
- 56% more likely to use more features and functions
- 87% more likely to work more independently (not submit as many tickets)
They also renew at a higher rate than untrained customers (92% vs. 82%). Customer learning platform provider Thought Industries paired these statistics with research from Bain & Company and found that a 5% increase in renewal rate increases profit by 60-228%. Analysis based on this kind of logic will help win the confidence of your senior decision makers.
Keep in mind that customer education is hard to measure. It requires an upfront investment that pays off over time. Most teams don’t recover the cost in their first years, even if they sell training at a premium. But if you measure training’s impact on product renewal leading indicators like increased adoption, you can build a strong case for establishing and maintaining a customer education team.
3) What to Expect When You Launch
When Dave and I launched customer education programs at Gainsight and Optimizely, respectively, we required about eight months to move from zero content to a fully functioning first version. Now at Azuqua and Checkr, we’re trying our hands at this again.
One thing we’ve found is that the process is iterative. You should expect to develop three or four “first versions” before a working program is in place.
REPLAY THE WEBINAR NOW!
In addition, it’s important to be realistic about how long it takes to develop effective learning experiences. Bad training is created quickly. Good training takes longer, but it will serve you well over the long-haul.
Just how long should it take to create training content, anyway? In 2017 Robyn Defelice and Karl Kapp addressed this question in an article published by the Association for Talent Development (ATD). They found that developing 1 hour of content requires:
- 38 hours for traditional classroom training
- 28 hours for virtual instructor-led training
- 42 hours for passive elearning (no interactivity)
- 71 hours for e-learning with limited interactivity
Although average training development time has decreased in recent years (thanks largely to improvements in course authoring technology), it still takes longer than most people think!
We recommend starting with materials that are relatively quick and easy to prototype and update – for example, articles and recorded sessions. But it’s important to move toward learning experiences that scale with your business and evolve with your customers’ needs. So over time, you’ll want to add more interactivity to make the content more effective.
If you’re delivering ad-hoc training now, it’s probably not highly interactive. For example, to build a basic product tour, you may decide to insert a few Q&A slides into an existing feature deck. But this kind of passive introduction doesn’t actually engage customers with your product. It’s like trying to teach people to play the piano by telling them to imagine how great they’ll sound when they touch the keys.
Ad-hoc training tends to be more interactive for trainers. They need to do a lot of talking, and a lot of work to customize the content. But effective customer education is actually more interactive for customers. You’ll want to provide opportunities for participants to try their skills, reflect on their learning experiences and ask questions that are pointed and relevant to their situation.
4) Getting Started
If you’re just beginning to think about customer education, it can seem overwhelming. We recommend starting with these first three steps:
• Clarify what customer education looks like today
How do your customers learn to use your product, and who delivers this educational experience? Interview or survey your team to understand the role that CSMs, support reps, project managers and others play in delivering customer training and other educational materials.
• Quantify the time spent on ad-hoc documentation and training
How many hours do each of your team members spend preparing and delivering customized materials that won’t be reused for others?
• Define the business value metric that customer education should drive
Investigate the key performance indicators that matter most to your business. Product adoption rates? Customer satisfaction scores? Time-to-value? Net retention or renewals? Something else? Also evaluate the “leading indicator” metrics you can measure today and track over time to verify customer education progress. This could be something like support ticket volume or NPS scores.
Summary
Hopefully, this introduction has sparked your interest in investigating customer education strategies more deeply. For more details about how to start a program, listen to Episode 1 of CELab or check other content at Customer.Education.
As champions of customer education, our philosophy aligns with John Leh and the team of extended enterprise technology analysts at Talented Learning. We’re excited to share our experience and ideas with this community, and we welcome your feedback anytime.
WANT TO LEARN MORE? REPLAY THIS WEBINAR!
To Charge or Not to Charge? Strategies for Pricing Customer Training
REPLAY THIS WEBINAR NOW!
How much should customers pay for training? How should you choose the best price? And when does it make sense to educate customers at no extra charge?
Join experts John Leh, CEO and Lead Analyst at Talented Learning, and Barry Kelly, CEO and Co-Founder at Thought Industries, as they clarify the economics of customer education. You’ll learn:
- The true cost of content: free vs. fee
- Where the “freemium” fits in
- Why timing is a key factor
- How to test your price points
- The value of bundles and other packaging methods
REPLAY THE WEBINAR NOW!
Need Proven LMS Selection Guidance?
Looking for a learning platform that truly fits your organization’s needs? We’re here to help! Submit the form below to schedule a free preliminary consultation at your convenience.
The post Starting a Customer Education Program: What You Should Know appeared first on Talented Learning.
Starting a Customer Education Program: What You Should Know original post at Talented Learning
No comments:
Post a Comment