We recently released the eBook “How to Use Customer Training Data to Make Better Business Decisions,” where we discussed the state of training metrics in 2017, and where there is still room to improve. Today’s post is about how to understand the impact your team’s results have on the company’s bottom line.
If you want to demonstrate the full value of your customer training program, the key is to connect traditional training metrics with the data in your CRM. While engagement data is helpful for understanding your content, the impact of your program should be the key factor that dictates your overall strategy. Here are a few metrics to highlight:
- How does training correlate with customer renewals and churn?
To answer this question, you first need to calculate your churn rate. Start by finding the total number of customers you had during a set time frame (i.e. one business quarter). Then divide that amount by the total number of customers you had at the beginning of the quarter.
For instance, if your company had 100 customers at the beginning of the quarter, and only 90 at the end of the quarter, your churn rate would be (100-90)/100 = 10%.
Now let’s say that 89 of those customers have taken training. Your renewal rate with training would then be 89/90 = 98.89%. And your churn rate with training would be 1/10 = 10%.
Note: if a high percentage of your customers who complete training still churn, take another look at your content and make sure it addresses the right knowledge gaps.
Another thing to keep in mind: if the majority of your customers who take training renew, that should be viewed as a sign of success – especially since it is far more expensive to acquire a new customer than to retain an existing one.
- What impact does training have on customer expansions?
Imagine that 5 of your customers purchase additional services, expanding their contracts from $1,000 per month to $1,500 per month. This would bring your Expansion ARR (annual recurring revenue) to $2500.
That might not seem like a huge difference, but think about it in terms of a customer’s total Lifetime Value (CLV). Generally, the longer a customer stays with you, the more money you receive from them.
- Does training result in increased product usage?
What you’re looking for here is a comparison between time spent in-app and time spent in training. Essentially, customers who take training should understand the value your product provides and be willing to invest in it further.
If you’re not sure how to find this metric, collaborate with your Product team. They may already be using measurement tools, like Intercom and Segment, which can capture customer behavior data.