Welcome to the Pilot episode of CE Labs – the Customer Education Laboratory!

This podcast series is devoted to you – The Customer Education pioneers out there – to share what we, and others have learned from hard-won experiences in the trenches of fledgling SaaS companies and tech startups.  

  • Maybe you’re a member of a Customer Success team realizing that you need to invest in Customer Education — or that you have an interest in doing it yourself
  • Perhaps you’re the first Customer Education hire at a growing company
  • Maybe you’re part of the growing community of Customer Education Heroes.

In this episode we introduce ourselves and our mission and begin challenging the assertion:  “You don’t need a customer education team until your company is mature”.

You need Customer Education earlier than you think. Starting Customer Education early in a business will help you scale customer adoption and growth.

So you’re thinking about starting a Customer Education program? Increasingly, companies are investing in Customer Education programs at an earlier stage. Sometimes these programs support the company’s Customer Success or Marketing strategies. Sometimes it’s just because they realize their employees are spending so much time training that they should devote a full-time person to do the job.

So if you’re the executive spinning up a Customer Education function, or you’re the first Customer Education person in-seat, how do you think about starting a team?

In our first episode of CELab, the Customer Education Lab, Dave Derington and Adam Avramescu explore how mature your organization needs to be before investing in Customer Education. Our perspective is that most organizations start too late, which is why companies are now investing earlier and earlier. The organizations that invest in Customer Education earlier are able to scale.

The escape from ad-hoc-atraz

Many companies invest in Customer Education because they’ve been in “ad hoc hell” (or as we call it, ad-hoc-atraz) and find it hard to escape. Everyone in the organization, from CSMs to Project Managers to Support Reps, are doing their own version of training. They redesign and customize it every time. No two people use the same materials.

Why do we do this? We’ve seen a few limiting beliefs that prevent organizations from escaping ad-hoc-atraz:

  • We don’t have enough time. Everyone is busy and doesn’t have time to create or update standard materials. We’d argue that you don’t have enough time not to invest in standardized and scalable training. Your team is spending precious time answering the same questions, or delivering the same trainings, over and over. You can take this off their plates so they can focus on the issues that truly need custom solutions.
  • We’re providing white-glove service by customizing everything. This usually isn’t true for startups. You’re doing what the customer wants, but not always what they need. This puts you in reactive mode where you’re taking orders, not partnering with your customers.
  • My CSMs should be able to do it all — they are our trainers. You didn’t hire most of your CSMs and project managers to be expert trainers. You might have some that are phenomenal at it, but unless you specifically hire them for their facilitation or documentation skills, instead of (for example) their relationship management or project management skills, they may not love or be good at Customer Education tasks.

This is why we recommend creating a Customer Education function once you have more than a few CSMs: it helps you deliver education consistently and scalably. To figure out whether your business is ready, take your all-in CSM headcount costs or cost-per-ticket and show the dollar value of the time people are spending on ad-hoc documentation and training. It may very well be more than a full-time person already.

Your first few months of Customer Education

Both Dave and Adam found that it took around eight months to go from having no real Customer Education content to a functioning first version of our programs at Gainsight and Optimizely. Now at Azuqua and Checkr, we’re both trying our hands at this again.

One thing we’ve found is that this process is iterative. You’re going to have three or four “first things” before you have a program in place.

A piece of advice – be realistic about how long things actually take to create. The fact of the matter is that bad training is quick to create; good training takes longer.

In an article published by the Association for Talent Development (ATD), Robyn Defelice and Karl Kapp found that in 2017, it took an average of:

  • 38 hours to create an hour of traditional classroom training
  • 28 hours to create an hour of virtual instructor-led training
  • 42 hours to create an hour of passive e-learning (no interactivity)
  • 71 hours to create an hour of limited-interactivity e-learning

While the amount of time it takes has gone down in the past several years, especially due to improvements in course authoring technology, it still takes longer than people think!

We recommend starting with materials that are quicker to prototype and update, like articles and recorded sessions, but eventually you’ll want to add more interactivity to make the learning more effective for people to retail.

It’s important to move towards education programs that will scale with your organization and your customer. If you’re delivering ad hoc trainings, most of the time it’s not very interactive. You’re doing a feature tour of your product or a runthrough of a slide deck with time for questions thrown in. This would be like teaching someone to play the piano by telling them how good they’ll sound when they play it.

Ad hoc training is more interactive for the trainer — they have to do a lot of talking, and a lot of work to customize it. Your Customer Education programs should be more interactive for the customer — give them time to reflect, try their skills, and ask more pointed questions.

Speak the language of your business

If you’re the executive making a business case for Customer Education, then we encourage you to speak the language your board speaks.

For example, many SaaS (Software as a Service) businesses care about their CAC/LTV ratio — the Cost to Acquire the Customer vs. the Customer’s Lifetime Value.

As opposed to on-premise software or other types of products where there’s an initial transaction, the SaaS model means that you initially spend more money on Sales and Marketing than you get back when the customer first signs with you. Instead, you need to keep delivering value so that the customer expands over time. That way, you’ll eventually make back the money you spent on CAC and hopefully a lot more.

This image from Jason Cohen’s “smart bear” blog summarizes it well:

Image result for cac ltv smartbear

While your board likely doesn’t care how many hours of training you delivered or what satisfaction score the customers gave, they do care about your CAC/LTV ratio. They may care about your product’s Time to First Value for new customers. They almost certainly care about your overall retention, expansion, and churn numbers.

So your Customer Education program’s charter should be to help you drive these metrics at scale, by enabling customers to use your product and achieve success in their space.

Luckily, you have some industry benchmarks to start from. Maria Manning-Chapman from TSIA (Technology Services Industry Association) found that trained customers:

  • Are 68% more likely to use the product more
  • Are 56% more likely to use more features and functions
  • Are 87% more likely to work more independently (i.e. not submit as many tickets)
  • Renew at 92% vs. 80% for untrained customers

Thought Industries, a LMS provider, paired this with research from Bain & Company to show that a 5% increase in renewal rate would increase profit by 60-228%.

Customer Education is hard to measure — it requires an upfront investment that will pay off over time, and most teams don’t achieve cost recovery in their first years, even if they sell training. But if you can measure how Customer Education affects the leading indicators of renewal for your product, such as increased product adoption, then you’ll be able to build a strong strategy for Customer Education in your business.

What can I do today?

If you’re just starting to think about Customer Education, here are three things you can do to get started:

  1. Find out how you educate customers today, and who does it. Interview or survey your team to find out how your CSMs, Support Reps, Project Managers, and other roles deliver training and documentation to customers.
  2. Quantify the amount of time spent in ad hoc training and documentation. How many hours do your teams spend preparing and delivering materials that won’t be reused or scaled to other customers?
  3. Define the value metric that you’d like Customer Education to drive for your business. Is it product adoption? Customer satisfaction? Something else? Then choose some “leading indicator” metrics that you can measure today to see if you’re making progress. This could be something like support tickets submitted or NPS scores.

Learn more in Episode 001 of CELab: The Customer Education Lab.

Leave a Reply