According to Finances Online’s 2018 SaaS Industry Report, 73% of organizations estimate that all of their apps will be SaaS by 2020. This usage prediction also correlates to an estimated $76 billion in growth of the SaaS public market. In other words, SaaS is booming and looks like it will soon dominate B2B and B2C markets alike. But whether its CRM technology, holistic applications, or marketing analytics AI, SaaS companies all have one thing in common: the need for good customer training.
By training customers, SaaS companies increase the value of their software by driving increased customer penetration and loyalty. Subsequently, customer stickiness increases and customer service costs go down.
In this article, we outline 4 key reasons why customer training is critical. The first 3 are part of any effective customer training program. By meeting each of the three components, training can achieve the final item on our list, reducing churn, which ultimately affects your bottom line.
1. Meet Basic Customer Service Needs
Most basic customer service needs will be covered through onboarding of new clients. But onboarding tutorials need to cover more than the basic ins and outs of your product. First, onboarding should work to establish an inviting environment for your customers, which can affect their decision to stick with your software and make them more likely to reach out for help before jumping ship. In fact, Magoosh, an online test preparation software, found that a simple welcome message sent at the start of onboarding increased customer free-trial conversions by 17%.
Since onboarding is one place most of your clients will spend time, these tutorials should include how your product can add value to their business. In other words, incorporate how-to modules about specific functions in your product through case studies that also show how that function can lead to a competitive advantage.
Onboarding should also include some level of tailoring for the role of the customer using the training. Knowing their role can make your customer training more effective and ensure the customer achieves their desired outcome with your software. For instance, a CFO might need to understand how to access big picture analytics and how such analytics will benefit their bottom line. At the same time, a customer service employee will need to understand how to use the software to interact with their clients and perform basic searches.
2. Add value to existing customers
Training should occur on a continual basis. That means integrating tutorials into your software that explain more complex uses. Such “milestone” training might be triggered by a customer action or at set time periods based on your churn data.
Ongoing customer training lets users deepen their understanding of your software, while also allowing you to streamline initial onboarding. For instance, MINDBODY University On Demand allows its customers to select focused training courses according to their needs long after initial onboarding takes place.
By moving tutorials on more complex features to ongoing training rather than in onboarding, you can also ensure users don’t get bogged down with information before they’ve even mastered basic start-up functions.
3. Establish a feedback loop
If you look deeper into training and customer data, you can discover new ways to improve training, improve retention, and thus reduce churn. For instance, customer training data can tell you:
- How far and fast customers are progressing through onboarding
- Which tutorials need clarification or require customers to ask for assistance
- When and where customers are leaving (i.e. where churn occurs)
Getting feedback and revising your training based on that feedback can have significant results. Remember, all feedback can be useful, even from customers who left your company behind. For instance, customer support software company Groove found that by asking why a customer chose to leave or not upgrade, they were able to reduce churn by 71%. Customer feedback is a crucial component of any business model, and SaaS customer training is no different.
4. Reduce Churn
Churn, or the rate at which customers leave, can haunt the dreams of many subscription software employees. Why does churn happen? Most often, customers switch from one SaaS to another because they don’t think the software fills their needs or think they no longer need it. There are certainly instances in which both of those reasons are true. More than likely, however, the reasons for leaving an SaaS behind can be traced back to poor customer training.
Implementing quality customer training has been proven to reduce churn. For instance, Videonor, a cloud based video conference software service company, was able to reduce their churn by 54% in just one year by implementing a customer training program.
Simply having a training program in place does not automatically reduce churn. Effective training programs reduce churn because they focus on each of the 3 items above: basic needs, added value, and customer feedback.
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