By guest expert, John Leh
In a recent post — Customer Training: 5 Reasons Why It’s Smart Business — I explained how companies can develop stronger customer relationships through learning programs driven by advanced LMS technology. But that raises an important question: How do you win the funding you need to improve customer education?
The best way to gain support is by demonstrating return on investment (ROI). I know ROI is a controversial subject in some learning circles. Nevertheless, it’s essential for customer training programs. Here’s why…
The Wisdom of Customer Training ROI
Companies with excellent customer education programs manage them the same way they manage their business. Learning initiatives are supported only if they align with the organization’s broader customer experience priorities. This means training content isn’t developed unless it is:
- Needed and
- Designed to drive relevant customer behaviors or resolve key problems.
Prior to program approval, appropriate success criteria are established to measure ROI. If content doesn’t meet or exceed these standards, it must be modified or retired. That may seem harsh, but you can’t be in the business of customer training without accepting some risk. (Or as I like to say, you need to Walk on the Wild Side of Measurable Training.)
On the upside, while there are risks, this process also can lead to significant rewards. Once your measurement methodology is in place, you’ll have a convincing way to communicate with the executive team, and the potential to increase your budget over time. Also, a solid ROI framework can “bullet-proof” your training organization during business or economic downturns, when executives must eliminate programs they consider to be weak or discretionary.
Getting Started With ROI Measurement
You may be concerned that developing and tracking ROI metrics is difficult and time-consuming. But it doesn’t need to be overly complicated. I recommend a simple 3-step approach:
1) Locate Credible Customer Behavior Data
Customer activity is often easy for learning organizations to identify and measure. Why? Because most companies are already gathering this kind of intelligence to drive core business operations. Your challenge is to find existing sources of complete, accurate customer information, and develop benchmarks that map to your learning initiatives. Here are some commonly monitored metrics:
- Customer spend
- Customer retention rate
- Repeat purchases
- Incremental purchases
- Complementary or cross-product purchases
- Support renewals
- Support call or trouble ticket volume
- Product satisfaction scores
- Customer referrals and recommendations
- Frequency and quality of product-focused social media comments and questions
If you take the time to interview your company’s sales, marketing, channel and accounting leaders, you’ll find preexisting reports that measure many of the behaviors I’ve listed. The format and distribution frequency of the data may not be exactly what you want — but the goal is to find reliable information that you can modify, if needed. Once you have access to this data, you’re ready for the next step.
2) Layer-In LMS Reporting
Your LMS should provide course or content completion reports on an individual, job, group, or organization level — for any timeframe you require. This makes it possible to correlate customer behavior with training activity across target segments.
For example, among customers who completed recommended training (versus those who did not complete any courses), what are the differences in overall spending, repeat purchases, support call volume and other key metrics? Patterns should emerge that will help you calibrate the level of impact that training has on customer behavior. (By the way, I have never heard of a scenario where trained customers performed worse than untrained customers — for any desired metric.)
3) Make Predictions and Measure Reality
Now you have some baseline proof — and it didn’t cost you anything but a little elbow grease! The next step is to look ahead, develop some hypotheses, measure outcomes, and adjust your expectations, accordingly.
For example, let’s say you work at a software company. When you roll-out the next version of your product, you could track which customers complete a free e-learning module about the upgrade. Then you could compare the variances in time before they purchase the upgrade, or in support ticket volume after they upgrade.
From there, it is easy to extrapolate the predicted ROI, if you were able to convince 50% or 75% or even 100% of customers to consume the e-learning content within 30 or 60 or 90 days.
Using data points like these, you can allocate additional funds to successful programs with increasing confidence. You can also pinpoint and revise programs that are performing poorly, or eliminate them if they don’t warrant continued investment. With each revision, you can predict outcomes, and then take credit for contributing to improved business results.
Do you want a bigger budget to make customer training more engaging and effective? Are you eager to integrate cool elements like gamification, video and social learning? Keep making more money with existing funds, and your company’s leaders are likely to expand your budget soon.
Learn More! Webinar Replay
This is different from normal cost-center training and development talk isn’t it? We have a lot more ideas where this came from!
Join me and Caleb Johnson, Director of Strategic Accounts at Expertus, for the webinar replay “How to Select the Right LMS for Your Customer Training.” Together, we discuss:
• Best practices for selecting a customer-facing LMS
• The key differences between customer and employee learners
• The required LMS features needed for customer training
• Recommended next steps and resources
About The Author: Thanks to our guest contributor, John Leh, CEO and Lead Analyst at Talented Learning, LLC. John is an LMS selection consultant and training industry blogger focused on helping organizations plan and implement technology strategies that support extended enterprise learning. He has almost 20 years of experience in the eLearning and LMS industry, having served as a trusted advisor to more than 100 learning organizations with a total technology spend of more than $50 million. John helps organizations define their business case, identify use case scenarios and requirements, develop a vendor short list, write and manage RFP documents and negotiate a great deal. You can connect with John on LinkedIn on Twitter or by email.