Churn can be a costly setback for any business. When customers leave, it doesn’t just mean lost sales; it means losing the time, effort, and resources invested in acquiring and onboarding them. High churn rates often leave a business constantly scrambling to replace lost customers to maintain growth—a far more expensive and resource-intensive effort than retaining loyal customers.
By prioritizing customer retention, businesses can strengthen long-term relationships, increase revenue, and reduce the pressure on new customer acquisition. In this article, we’ll explore the drivers of customer retention, how customer education can improve customer retention, and how to build an effective customer education program.
Skip ahead:
- Six Drivers of Customer Retention
- Why Companies Should Prioritize Retention over Acquisition
- The Link Between Customer Education and Retention
- The Impact of Strong Retention Through Customer Education
- Key Metrics to Measure the Success of Customer Education
- How to Build an Effective Customer Education Program
- Using Technology to Scale Customer Education and Retention
- FAQs
Six Drivers of Customer Retention
Several factors drive customer retention. Here are a few of them:
User Onboarding
The onboarding process is usually a customer’s first interaction with your brand/product, setting the tone for the relationship going forward. A well-executed onboarding process introduces your customers to essential features, provides clear guidance, and helps them quickly realize your product’s value. This makes them more likely to stay engaged and continue using it.
Without clear guidance about your product’s capabilities, customers may feel confused, frustrated, or overwhelmed, especially if they encounter challenges early on. This leads them to miss out on features that could improve their experience or solve their problems. When this happens, customers abandon the product or one with a more user-friendly onboarding experience.
Product Value
Grzegorz Robok, the founder of Comfort Pass, is a proponent of delivering value through your product.
“At ComfortPass, we’ve built strong relationships by genuinely understanding what matters to our frequent travelers. We know what makes their journeys easier and more enjoyable and ensure they feel that every time. It’s this personal connection that keeps them loyal.”
Grzegorz is right.
Customers need to feel that they’re receiving consistent quality, performance, and value from your product or service. If your product fails to deliver—whether due to poor functionality, lack of updates, or not living up to marketing claims—customers may feel like they’re not getting their money’s worth. This can lead them to explore alternative solutions or competitors that offer better value.
Customer Service
Salesforce’s State of the Connected Customer report revealed that 77 percent of customers expect to interact with someone immediately when they contact a company. Customers expect timely, efficient, and empathetic support when they encounter issues. A responsive and helpful customer service team can turn a potentially negative experience into a positive one, reinforcing customer loyalty.
Conversely, poor customer service—such as long response times, unhelpful solutions, bad chatbots, or lack of empathy—leaves customers feeling frustrated and undervalued. When customer service fails, it can drive even long-term customers away, as they seek brands that are more attentive to their needs.
Customer Success
Customer success is a proactive approach where you help customers achieve your goals using your products or services. This involves actively guiding customers through their journey, offering personalized support, and ensuring they derive maximum value.
Without a customer success strategy, your customers may feel unsupported or unsure of how to make the most of your product. This lack of guidance can lead to dissatisfaction, causing them to abandon your product for competitors that offer a more hands-on approach.
Customer Education
Customer education is a crucial, yet often underutilized, driver of retention. By providing your customers with the tools, resources, and knowledge they need to understand and effectively use a product or service, you can empower them to succeed.
Educational initiatives such as training programs, online courses, webinars, workshops, and how-to guides ensure that customers are well-informed and confident in using your product. Without such education, they may struggle to fully grasp your product value, leading to frustration, underuse, and eventual churn. They’ll feel unsupported and may try to switch to a competitor that provides better resources for success.
Personalization
Salesforce’s research shows that 65 percent of customers expect companies to adapt to their changing needs/preferences, but 61 percent say most companies treat them as a number. This is a recipe for customer churn.
Customers appreciate businesses that understand their individual needs, preferences, and behaviors. You can create a more engaging and relevant experience for each customer by offering tailored recommendations, personalized communication, and customized solutions. This evokes a sense of connection and loyalty, as customers feel like you truly value them as individuals.
Why Companies Should Prioritize Retention over Acquisition
In 2013, e-commerce merchants lost $9 on average for every new customer acquired, but today, merchants lose $29 per acquired customer, a 222 percent rise in the last 8-10 years. This is not limited to e-commerce businesses, though. Depending on the industry you’re in, acquiring new customers can cost five to seven times more than retaining existing ones.
Here’s why: acquiring new customers often involves costly marketing campaigns, promotions, and sales efforts. If the campaigns fail, your time and money are a waste. You’ll also lose resources if you get a few customers but cannot break even on your customer acquisition costs (CAC).
In contrast, focusing on retention capitalizes on existing relationships, which typically require less investment to maintain and grow. Since those customers have already bought from you, all you have to do is create an exceptional experience so they can keep renewing their subscriptions, e.g., improving your customer support response times, offering periodic discounts, rolling out new product features, etc.
The more value your existing customers get from your offerings, the more likely they are to become brand advocates. Since 88 percent of consumers trust word-of-mouth recommendations far more than traditional advertising, you’ll likely acquire new customers when people recommend your brand to others—and you won’t have to spend a dime.
The Link Between Customer Education and Retention
When you provide educational resources, such as tutorials, eBooks, courses, and ongoing training, you empower your customers to use your product more effectively. As they become more proficient, they naturally increase their usage, discovering new ways your product can meet their needs.
This deeper engagement not only boosts customer satisfaction but also reinforces their decision to stay with your brand. They start to see your product as indispensable, making them far less inclined to seek alternatives.
This year, Intellum commissioned Forrester Consulting to conduct a study to determine the impact of customer education, and here are some findings:
- 96 percent of customer education programs see positive ROI;
- 34.6 percent increase in average lifetime value per customer trained;
- 26.2 percent increase in reported customer satisfaction rates;
- 22.3 percent increase in average retention rates for products targeted by training;
- 7.6 percent increase in annual revenue for products targeted by training.
Want to know how this works in real life? Let’s take the giant social media company, Hootsuite, as an example.
When the company decided to create an academy, its main goal was to teach customers how to use the Hootsuite dashboard properly. However, it didn’t take long before that goal morphed into something bigger as the Hootsuite team realized how online training could help them reduce churn, increase customer retention, and generate revenue.
So, Hootsuite worked with Thinkific Plus to build the Hootsuite Academy. The team created several free and paid online courses, which have, over the years, helped them educate nearly 500,000 students globally. Their flagship Social Marketing Certification Course, which costs $199, has been completed by 72,000 people and counting.
Using Thinkific Plus’ student feedback features, the Hootsuite team learned what students loved about the Academy and what they felt needed to be improved. As the team implemented this feedback, they were able to scale Hootsuite’s customer education program into a customer-retaining, revenue-generating, and authority-boosting channel for the organization.
Read: How Hootsuite Educates Customers and Generates Revenue Using Thinkific Plus
The Impact of Strong Retention Through Customer Education
There are many benefits of driving retention efforts through customer education. Here are some of them:
Reducing Churn
Customers who understand how to get maximum value from your products are far stickier. So, investing in product tutorials, webinars, documentation, courses, and certification programs helps customers realize the full potential of what they’ve purchased. As they derive value from your product, they’ll have fewer support issues and will not feel the need to switch to a competitor.
Increasing Engagement
Educated customers are more likely to engage deeply with a product because they understand its features and how it can meet their needs. This not only improves customer satisfaction but also helps you establish a long-term connection with your customers, reinforcing their loyalty and involvement with your brand.
Fueling Better ROI
Investing in customer education offers a strong return on investment (ROI) by facilitating retention and reducing the costs associated with customer acquisition. Since educated customers tend to stay longer (which increases their overall lifetime value), there isn’t much pressure to acquire new customers. So, you can save money on CAC and funnel resources, instead, into retaining customers, which is cheaper.
Customer education also reduces the need for extensive customer support as customers become more self-sufficient, further driving down costs and improving profitability.
Increase Upsell and Cross-sell Opportunities
When customers are well-versed in using a product, they’re more likely to recognize the value of complementary products or premium features. By demonstrating the full potential of your product, you can create natural pathways for customers to upgrade their subscription plans (upselling) and/or purchase related products or services (cross-selling), driving additional revenue.
Key Metrics to Measure the Success of Customer Education
To effectively use customer education to drive retention, it’s crucial to benchmark and measure the right metrics. These metrics help you track progress, assess the impact of educational efforts, and finetune your strategies.
Churn rate
Churn rate measures the percentage of customers who stop using a product or service within a specific time frame. This metric is essential for understanding how well your customer education efforts are working to retain customers. Recurly’s research reveals that the average churn rate across industries is 4.1%, but the benchmark differs depending on your industry, as seen in the image below.
By comparing churn rates before and after implementing educational initiatives like onboarding programs, tutorials, and online courses, you can see if your efforts are reducing customer attrition.
Customer lifetime value (CLV)
CLV is the total revenue a business expects from a customer throughout their relationship. Customer education directly impacts CLV by increasing the likelihood that your customers will stay with your brand longer, renewing their subscriptions, and/or buying more products/services.
Engagement metrics
Engagement metrics help you gauge how often and deeply customers interact with your products and educational resources. These metrics include product usage frequency, feature adoption, and interactions with educational content (such as the number of tutorials completed or webinars attended).
Support ticket volume
When customers are properly educated on how to use a product, they encounter fewer issues and become more self-sufficient. This reduces their need to contact customer support, resulting in fewer tickets and lower operational costs for your business.
Customer satisfaction (CSAT) and Net Promoter Score (NPS)
CSAT and NPS are critical metrics for measuring customer happiness and loyalty. CSAT is typically gathered through surveys that ask customers how satisfied they are with your product/service, while Net Promoter Score gauges how likely they are to recommend your product to others.
Customer education can significantly boost both scores because well-informed customers are more likely to be satisfied and enthusiastic about your product. Customers who are able to use your product to its full potential will generally report higher satisfaction levels and are more likely to recommend your brand to others.
How to Build an Effective Customer Education Program
Creating an effective customer education program requires thoughtful planning and execution that is aligned with customer needs and business goals. Here are some actionable steps to guide you through the process:
Identify customer pain points and goals.
The foundation of a successful customer education program is understanding the problems your customers face and the goals they want to achieve with your product/service. To do this, gather insights from various sources—customer feedback, surveys, support ticket analysis, and user behavior data. These insights will help you identify common customer issues, knowledge gaps, and underused features.
Segment your audience.
Customers vary in expertise level, industry needs, and usage patterns, so you shouldn’t take a one-size-fits-all approach. Instead, segment your customers based on these differences. For example, new users will require basic onboarding content, while experienced customers may need advanced tutorials on maximizing product features.
By tailoring content to these different segments, you can provide each customer with a personalized learning experience.
Create a content roadmap.
A well-structured content roadmap guides the progression of customer education over time. Start by mapping out the customer journey, from initial onboarding to advanced product mastery. Early-stage content should focus on quickly getting customers up and running with easy-to-understand resources covering basic functions and features.
As they become more familiar with your product, offer deeper content that dives into advanced use cases, best practices, and lesser-known features.
Use a variety of formats.
Customers have different learning preferences—some may prefer reading, while others may learn better through video or interactive content. Offering education materials in multiple formats helps you cater to various learning styles and improve customer engagement.
Consider using:
- Video tutorials (or online courses) for visual learners who benefit from step-by-step demonstrations.
- Written guides or eBooks for those who prefer text-based instruction.
- Webinars for live interactions with experts.
- Interactive product walkthroughs to guide users through features in real time.
Make learning accessible and convenient.
Customers will only engage with educational content if it’s easy to access and fits naturally into their workflow. You want your customers to be able to learn at their own pace, whenever convenient.
So, make sure your educational resources are easily discoverable—whether through a dedicated help center, within the product itself, or through email newsletters. In-app tutorials, tooltips, and embedded guides can offer just-in-time learning when a customer needs it most.
Collect feedback.
No education program should be static. Continuously gather customer feedback to assess how well your program meets their needs. Use surveys, in-product feedback forms, and support interactions to understand what customers like, what they find confusing, and where they need more help.
This feedback loop allows you to refine and update your educational content to stay relevant and effective.
Track metrics to measure success.
As you release new content and analyze feedback, measure the impact of your customer education program to ensure it’s driving your desired outcomes. Some key metrics to track include churn rate, customer lifetime value (CLV), engagement rates, support ticket volume, and customer satisfaction (CSAT).
Encourage peer learning.
Peer learning can be a powerful way to extend the reach of your customer education program. Create a community where customers can share knowledge, ask questions, and help each other solve problems. You can do this through online forums, social media groups, dedicated community tools, or user-led webinars.
Encouraging customer interactions lightens the load on your support teams. It also helps customers feel connected to your brand, which makes them more likely to stick around and become brand advocates.
Using Technology to Scale Customer Education and Retention
If you’re planning on incorporating customer education into your retention efforts, you’ll need a tool that is scalable and has the right features to help you create intuitive learning experiences for your customers. That’s what Thinkific Plus provides.
Thinkific Plus is a robust, out-of-the-box solution that allows businesses like yours to develop high-quality educational content that’s easily accessible to customers, regardless of their location or timezone. Here are some features we offer:
- Course creation tools: With drag-and-drop functionality, multimedia integration, and advanced content types like quizzes and surveys, course creation tools help you create engaging courses that cater to different learning styles.
- Seamless branding: Customize the learning environment to match your brand, creating a cohesive customer experience. From branded course sites to personalized learning pathways, customers can interact with educational materials in an environment that feels consistent with your brand identity.
- Robust analytics: Advanced analytics allow you to track customer progress, engagement, and performance. This way, you know which courses are most effective, what customers are struggling with, and the impact of your education program.
- Seamless integration capabilities: Smooth integration with tools in your existing tech stack, from CRM systems like Salesforce and HubSpot to email marketing tools like ActiveCampaign and Mailchimp.
- Advanced support: A dedicated Customer Success team will guide you through every step of your journey, from initial setup to ongoing program optimization. This helps you focus on creating great content and launching fast rather than on the complexities of platform management.
Boost your customer retention rates with customer education initiatives.
Empowering your customers with the knowledge they need to use your product confidently and effectively is a surefire way to reduce churn, increase engagement, and build stronger, long-term relationships. A strategic education program—from onboarding to advanced resources—helps customers realize lasting value from your offerings, which keeps them renewing their subscriptions.
Download our Customer Retention Program Project Plan to learn more about using customer education to aid retention.
FAQs
- How does customer education impact retention?Customer education impacts retention by empowering customers to use products effectively. Customers who understand a product’s full value are more likely to stay engaged and loyal.
- What should a customer education program include?A solid customer education program includes onboarding materials, feature/product tutorials, in-depth online courses, advanced guides, and eBooks. These resources help customers at every stage, from initial setup to maximizing advanced functionalities.
- How do I measure the effectiveness of customer education?The key metrics for measuring the effectiveness of customer education include churn rate, customer lifetime value (CLV), engagement rates, support ticket volume, and customer satisfaction (CSAT).
