Back in the olden days of early 2020, we visited a customer onsite (pre-Covid-19) to deliver a quarterly business review (QBR) and participate in a “day-in-the-life” exercise in which we spent the day observing how our customer’s entire team was using Learndot in the real world. One of the topics we covered was gathering data and running reports. The customer described to us what information they need to show to management, and how they get that data from Learndot to create the reports they need.
The context of the discussion was about how the team can tell the story that customers who go through training programs, are somehow better customers. "Better customers" is too vague a term to report on, but it does beg the question, “What is a better customer?”
A better customer
A better customers is one who:
- Buys quickly
- Pays a reasonable amount
- Stays a customer for a long time
- Requires a reasonable amount of support (not too much, not too little)
- Buys more product over time
- Gives you a testimonial that you can publish
- Helps improve the product/service you offer
From each of these, we can define precise metrics that we can measure to determine what improved (how the customer “got better”) as a result of a customer completing training. As we worked on the whiteboard to document what these metrics might be and how to pull them into the reports, the VP of education services paused and reminded the group:
We are a force multiplier for our business.
The point he was making what that…what this team does…has multiplying and downstream affects on the business, and that it was this team’s job to figure out what those multiplying affects are and report the results to the rest of the company.
What is a force multiplier?
Force multiplier? I thought the same thing. What is that? Here’s the definition:
In military science, a force multiplier refers to a factor or a combination of factors that gives personnel the ability to accomplish greater feats than without it. The expected size increase required to have the same effectiveness without that advantage is the multiplication factor.
If you examine the first sentence of the definition carefully you might notice that there are three key parts:
- Factor: training.
- Personnel: The customer education team.
- Feats: the downstream results that customer education produces.
You might summarize it this way:
Training gives the customer education team the ability to accomplish better marketing, sales, product adoption, product sales, and net revenue retention than without training.
Sounds impressive, no?
It also sounds like a definition that gives us the metrics we need to measure how much of a force multiplier we can be. More on metrics below. Let’s continue with understanding the definition.
The second sentence of the definition also looks very familiar. It sounds a lot like the definition of scalability, which in its simplest form is “outputs grow faster than inputs.” And this is exactly what customer education is designed to produce…outputs (or results) that grow faster than inputs (resources).
Now that we understand the definition of force multiplier better, and how it applies to customer education, let’s look at the various ways customer education is a force multiplier.
What might those "greater feats" be? Here are four:
- Product use
- Product sales
- Net revenue retention
Let’s talk about each:
Customer education is a force multiplier for marketing. The best marketing educates, informs, and/or entertains. But marketing can only go so far. Market can communicate why someone should use a product and even what a product can do for someone. Marketing falls short of helping a prospective customer understand how it can help in pursuit of their challenges and goals.
Offering training to prospective customers, help them become more intimate with your product, how they can use it, and what it’s like working with you. That builds trust. And people buy from those they trust.
Product use and product sales
The customer I talked about above, knows precisely how much product its training customers purchase after completing training. How? He has a dashboard set up in Domo. It pulls data from Learndot, the CRM, and their product.
Do you have a dashboard like that? Do you know the dollar amount of product your training customers have purchased in comparison to the average product purchase for customers who do not complete training? You should figure out this number. It is the key to your contribution to the business.
Special note: I just want to add that this customer sells training directly and earns approximately five million dollars in the direct sale of training. You might think a team that sells five million dollars worth of training would not need to prove that training has an impact on product sales. It still does. And it goes to show that you don’t need to choose between offering training for free in order to gain product adoption and sell training just to make a profit of training. You can do both.
That’s being a force multiplier.
Net revenue retention
When customers renew and increase their contract value, the increase is called net revenue retention. That increase could come from customers adding more users and moving up in tiers, purchasing add-on modules of existing products, or purchasing additional product for other use cases. The most obvious example of training increasing net revenue retention is for companies that have numerous products.
Most of you have customers that only purchase one of your products. If you offer those customers training content on your other products, you can education them on how they could benefit from using other products. This will influence their decision to purchase that additional product.
It is a force multiplier because you are likely already running training courses for that product for existing customers of that product. It does not take much extra effort to invite customers who don’t already use that product to the training…but it could influence a large purchase of that product.
More than about learning
Working with customers and writing this blog has helped me understand a new way of looking at the benefits of customer education. It’s not just a means of helping customers learn your product, so they call support less. It’s a means of driving your entire business…from landing new customers all the way through to expanding relationships with them over time. That is how customer education is a force multiplier for your company’s business.
It’s time to update your customer education strategy
COVID-19 has forced us all into a new paradigm of work and serving customers. In-person customer training is no longer an option (at least for now) and software companies are rapidly changing how they go to market with training. If that sounds like you, you need to re-think your customer training strategy.
We wrote a guide called The Learndot guide to customer education strategy design to walk you through that process, so you can come out of this phase better off.