Customer retention rates, customer lifetime value, and net new revenue are just several areas of revenue growth that can be supported through customer education. Offering engaging customer training opportunities will ensure that you have happy and informed champions that can vouch for your product to their team, drive referrals, and also suggest innovative service offerings for future revenue streams. See how to do this by scrolling down!
Skip ahead:
- The Role of Customer Education in Revenue Generation
- How to Drive Revenue Growth with Customer Education
- How Customer Education Drives Account Expansion
- How Customer Education Maximizes Customer Lifetime Value
- 5 Tactics for Sales Teams to Leverage Customer Education
- Customer Education and Revenue Generation FAQs
The Role of Customer Education in Revenue Generation
Customer education has typically been imagined only as a way to improve product adoption. Which alone helps generate revenue by creating demand for existing products and services. But in reality, customer education can offer so much more to your bottom line.
For example, 9% of free accounts convert to paid accounts without a boost from customer education. Becoming more active with your training programs can make this number climb so that you earn more revenue from existing customers.
Educating customers increases product adoption and renewal rates, reduces support costs, and increases customer satisfaction. And later, when customers become power users of your platform from education, they become less reliant on your sales or customer success teams for support on smaller issues. This savings in time and money offers a big benefit to your margins.
How to Drive Revenue Growth with Customer Education
There are many different ways to drive revenue growth through customer education tools, both directly and indirectly.
- Direct forms of revenue growth are those where the customer is purchasing a training program or a higher level of service as a result of the training.
- Indirect forms of revenue growth come from reducing costs to support the customer, such as when you have less employees needed to run onboarding programs or less marketing efforts needed to earn a lead back after they have churned.
The examples below dive deeper into several ways that you can earn revenue growth through customer education tools.
Customer Retention
Your target customer retention rate (CRR) varies depending on which industry you work in. For example, media and professional services have the highest average retention rate at 84% while IT and software companies have an average of 77% CRR.
The goal is to keep your CRR as high as possible. Happy and informed customers will continue to use your products and won’t consider churning for a competing product. Properly training your existing customer base will reduce the likelihood of experienced frustration with the product and will ideally show them innovative new ways to put product features to use for their unique industry or pain points.
With less churn, you won’t have to spend as much money on marketing programs to recruit new replacement leads or onboarding programs to train those new leads. This reduction in cost boosts your margins higher, which creates revenue growth.
Account Expansion
Account expansion is an obvious way to earn new revenue growth for your company. Any account should have a champion from the customer side that is passionate about learning about the product to solve a specific pain point or challenge that they were experiencing before using your company’s product.
Finding the champion & engaging them in educational strategies like webinars, product training courses, handbooks, and help centers will help them become power users. This is when you’ll likely earn a lot of positive feedback from the champion about other new or existing features that can meet other needs for them.
Creating a positive relationship through education will introduce new opportunities for selling other products and services that align to the customer’s needs.
Paid Training Programs
Let’s look at Hubspot and Salesforce, which are two customer relationship management (CRM) softwares that are widely used. Organizations that purchase Hubspot and Salesforce want to ensure that their employees are making the most efficient use out of the product, so they are likely to invest in paid training programs for their employees to become power users.
When there is strong incentive for the customer to make use of one specific platform, the creation of paid training programs can be a good strategy. This makes sense when companies have already heavily invested time or money into that one particular solution already.
Paid Certifications
Paid certifications follow a similar strategy to paid training programs. However, certifications are more likely to benefit the employee who is searching for a new job. Hiring managers can easily search for employees who have a specific designation or certification.
This type of revenue growth area makes the most sense for softwares or technologies that are very technical and require specialized knowledge. And like paid training programs, the certification should prove to be something that is highly in demand from hiring managers.
Training Subscription
Products that have very frequent feature launches may consider leveraging a training subscription for customer education. Plus, revenue growth is easier to forecast when products are sold on a subscription basis. Any of the above models could fall into this format, which would just grant a certain level of training access based on the subscription level or frequency paid.
As an example, a new user to your product could be offered a free 14-day trial to your customer education marketplace. After that, they would need to pay per employee, on a weekly or monthly basis for continued access. You could even offer specialized early access videos to newly released features on a separate pricing structure or membership level.
How Customer Education Drives Account Expansion
Customer education is going to be a top driver for account expansion in 2024 and beyond. There’s a clear difference between using education tools for retention versus expansion.
- Focusing on retention will help reduce costs and increase product feature adoption, but it won’t earn you a lot of new business or momentum forward as a company in itself.
- Focusing on account expansion will earn you net new revenue, customer insights, and feedback on future service offerings that you can add to your roadmap.
Setting up customized training programs for your new accounts is also a great way to learn about how they would typically use the product. You’ll be able to easily see where the gaps are and may be able to sell them additional or alternative features so that they receive the exact solution to meet their needs. As a result, you will land and expand these accounts faster.
If you’re unsure of how to approach your customers or you simply have too many customers to engage in one-on-one training programs, start with your largest customers first or consider adopting an online customer education tool to scale your training delivery.
How Customer Education Maximizes Customer Lifetime Value
Customer champions are what drive your business forward. Finding and empowering at least one champion in every single account is the key to continuously building more customer lifetime value (CLV).
The champion will typically be the person who has the most experience or decision-making power around the solution that your company provides. This person should be kept as educated as possible. They hold a lot of power when it comes to influencing other stakeholders in the customer account, signing off on renewals, and approaching issues when they arise.
It’s a good idea to keep your champion(s) up to date on all product features and consider engaging them in additional product training sessions when they onboard or when new products are released. Not only will the champion become a power user who is passionate enough about your solution to keep the relationship going strong, but they’ll also be able to turn around and train their own teams & industry peers about how to use your product. That saves your own team even more time and money!
5 Tactics for Sales Teams to Leverage Customer Education
Provide actionable strategies for how the sales team can use customer education as a growth tool. Include actionable strategies that address the two points above, as well as how they can use it as a value add in their sales pitches.
One of these should docs on the benefits of creating tailored learning experiences to attract and retain larger accounts.
When it comes to putting customer education into practice, where should you start? What tools are available for you to start using?
Below are 5 tactics that can help you deliver information in an engaging format to your customer base. Keep in mind that various tactics have differing needs when it comes to set-up time, budget, and maintenance. Fortunately, if you leverage Thinkific Plus as your customer education platform, there is plenty of onboarding and training support provided to get you up and running quickly.
Account-specific Webinars
Account-specific webinars are a great opportunity to show your customers exactly how to make use of the product. It involves crafting a 30 or 60-minute virtual session where customers can join online to watch a short training session and ask product-related questions in a group format. Inviting many stakeholders or users from one account to the same event will make effective use of the trainer’s time while also educating a large group at once.
Who should lead this: Ideally the sales or customer success representative should lead this initiative as they will have in-depth knowledge on the priority use cases specific to the customer and a relationship with the customer champion.
When is the best time to use it: While it’s a great idea to do these webinars any time to make sure that the customer is up to date about the product, you’ll definitely want to add them to any product launch plan.
Best practices:
- Demonstrate only the features and use cases that are relevant for this customer
- Have minimal presentation slides and focus most of the time on doing a walkthrough of the actual product
- Be prepared with several FAQs that you have heard from this account or similar customers
Online Courses
Online courses help new customers get up to speed with your product as fast as possible. You can combine a mix of media like quizzes, printouts, videos, and images into one virtual course.
This approach is great as it is easy to track exactly how much content each member of the customer account has absorbed, so you’ll be able to identify training gaps immediately. Then, you can follow up with additional resources or incentives to make sure they are fully informed about the product’s capabilities.
Who should lead this: Customer success or service representatives who are more focused on the onboarding stage. Marketing or enablement teams may be able to support content development.
When is the best time to use it: At the onboarding stage. Encourage your new customers to complete the course within 1-3 months of purchase so that they can start seeing value from your product as fast as possible.
Best practices:
- Keep in mind that different people have different learning styles, so having a mix of media will make your training program more accessible.
- Don’t forget to balance scalability and customization. Consider having a templated version of the course for smaller customers and change out certain aspects to customized media for larger customers.
Help Centers
Help centers are an online resource area or webpage where customers can self-serve. Since they are able to find information on their own time and as soon as they need it, this should drastically reduce how often your customers are coming to you for support on small items.
Who should lead this: A web developer or product marketing person should be responsible for the development of the help center, but customer success teams can support by encouraging customers to view information there.
When is the best time to use it: Anytime!
Best practices:
- If you’re serving a global audience, consider translating your help center so that it is accessible to your core regions.
- Use a mix of video and text so that it is digestible for the viewer. Remember that different people have different learning styles.
- Set-up website tracking analytics so you can see which pages are most frequently visited. This can help you identify where customers are often struggling with product adoption.
Customer Newsletters
Customer newsletters are a great low-lift way to stay in contact with your audience. As long as you have a list of emails (which you can create from your CRM), you’ll be able to do this tactic. You can use the newsletter to announce new product launches, share company milestones (like funding rounds or important changes to the C-suite), and remind customers about upcoming industry events that you’re attending.
As a bonus, you can also use customer newsletters to distribute other customer education tools like links to the help center or how-to videos from the onboarding courses.
Who should lead this: Marketing teams are usually responsible for the customer newsletter, but insights are provided by customer success and product teams.
When is the best time to use it: It’s best to have a regular frequency like bi-weekly or monthly launches. Add customers to the workflow as soon as they sign on to work with your business.
Best practices:
- If this is new, keep it simple. Find an email builder tool that works with your CRM and focus on pain points that are common to most of your customers.
- If you have a very large customer base, consider building separate newsletters for specific accounts, buyers, or verticals.
Quarterly Business Reviews
One-size doesn’t fit all, as Ricardo Saltz Gulko shares.
Quarterly business reviews are 1-1 meetings with customers where you’ll have the opportunity to learn about how they uniquely interact with the product and talk about their future with the platform. This helps you easily identify how the customer may make use of future products that you can upsell or cross-sell to them. It also helps you spot training gaps and know which educational tools to share.
Who should lead this: The customer success team should run these with each major account.
When is the best time to use it: Running it once per quarter will help you stay on top of new updates and product releases.
Best practices:
- Keep other departments in the loop! Learnings can help fuel content creation from the marketing, sales, and enablement teams as well.
- Bring just the champions and power users to the call so that you are not distracted by insights or updates from people that won’t often use your product.
Put your learnings to work
Implementing educational tools such as paid training programs, certifications, and personalized learning experiences not only boosts product adoption but also reduces churn and support costs. There are many ways to go about creating customer education resources, but the important part is to start it as soon as possible so you can see the revenue benefits quickly.
Download the Customer Retention Program Project Plan below to start putting your learnings to work!
Customer Education and Revenue Generation FAQs
- How can customer education increase revenue?
There are many different ways to drive revenue growth through customer education tools, both directly and indirectly.- Direct forms of revenue growth include account expansion, renewals, and net new sales on training programs.
- Indirect forms of revenue growth comes from improved retention rates, higher product adoption, and reduced onboarding costs.
- What are some ways to monetize customer education?
Offering paid certification and training programs allows businesses to monetize their customer education programs. - How can customer education reduce churn?
Educated customers have a better understanding of the product and are less likely to experience frustration. - How can customer education increase customer LTV?
Customer education programs help show customers the value of the product so that they continue to invest in the solution. It also helps build customer champions who can generate buy-in or referrals.
