Want Customer Success? Invest in Customer Training.

We all know intuitively that customers who are well trained perform better.

The problem is that training is hard. It's time consuming to develop, and it seems like as soon as your awesome training program is complete, your product changes and it becomes obsolete. This is a big reason why so many enterprise software companies, especially Cloud/SaaS platforms, under-invest in training their customers.

There is another reason, too. The perception that the costs of providing a top-notch training program outweigh its benefits. Of course, this is just a perception, and not a data-driven conclusion, because companies are not very good at using data to measure the success of their training practices.

Lately, I've enjoyed some lively discussions on these topics with Bill Cushard, Head of Training at ServiceRocket, which provides training, support, and utilization services for today's top software companies. Bill has been helping me understand all the connections between Training and Customer Success, and I've been helping him think about the best way to use data analytics to prove that connection. And I'm lucky enough to have him join me here to answer a few of my questions.

Tom Krackeler (Tom):

How do today's top enterprise SaaS companies think about customer training? And how do they deliver it — in person, via webinars, with videos, through in-app guidance, or some combination?

Bill Cushard (Bill):

Today's top enterprise SaaS companies treat customer training as a strategic imperative. These companies are betting on the belief that their software will ultimately change customers' financial statements and do not want to leave to chance that customers will adopt their product without help. Moreover, top enterprise SaaS companies understand the technology adoption lifecycle and treat each target group differently. As early stage companies sell to smaller, fast-growing companies, the users are more likely to be innovators and visionaries that do not need formal training. In these cases, good in-app help files are more than enough. However, when that enterprise SaaS company books a deal with a Fortune 500 customer, users are likely to be the early majority or even late adopters who expect training. In these cases, formal training (whether live or self-paced) is imperative and expected.

Tom:

What's an example of a company with a top-notch customer training program? What are the keys to success?

Bill:

Cloudera has a very good customer training program. A few keys to what makes it excel are:

1. Training is featured prominently. Cloudera has a "Training" link in their main navigation, making it clear how important training is.
2. Training is discoverable. Cloudera makes training courses available on their web site and anyone can register. They do not make customers log in to find training courses.
3. Training is not just product-oriented. Classes offered range from industry topics to product training. For example, Cloudera offers a class called Introduction to Data Science. This is a valuable course for any attendee, even if they don't use Cloudera services. (And what do you think happens when non-Cloudera customers take this course?)
4. Training employs a variety of learning methods. Cloudera offers classroom training, online resources, certification, and private training to suit the needs of various audiences.

Tom:

In today's world, you hear a lot about the "consumerization of the Enterprise," and how the introduction of simpler and more elegant user interfaces will change how enterprise software is bought and used. How does this impact the need for good training or how training will get delivered?

Bill:

I believe it's a false trade-off to say: "Since our product is so easy-to-use, we do not need training." Even if a product is as intuitive as the designer thinks it is (which is rare), if the product changes the way people or organizations work, people will need to learn that new way of working. Any enterprise software company that wants to help customers improve a result should spend time helping customers learn how to do that by using the new product, no matter how well the product is designed.

Tom:

Most tech companies have financial constraints. How should you decide whether to invest your marginal budget in making your software easier to use versus delivering a training curriculum?

Bill:

I'm a trainer, not a product designer, and even I would say if a choice must be made, I'd focus on improving the product design. However, the true answer to the question lies somewhere in the middle. Training, when done really well, is more about how to get work done using the product, rather than how to use particular features and workflows in a product. It's a subtle difference, but an important one. A good example of this difference is any of the early iPhone commercials. They were all instructional in nature, but none of them taught features. The commercials showed us how to order flowers for our wives at the last minute when we forget our anniversary, or how to find an apartment, or how to look up the name of a bird that we saw on a hike. When I watch these commercials, I'm learning how to accomplish things with the phone, not how to use the phone.

It's a constant trade-off. And I recommend chipping away at improving both your product and your training... over time. Very much in the spirit of the 20 Mile March.

Tom:

How do you measure whether a training program is successful? What are the key metrics? Any industry benchmarks you can share for companies starting a training program?

Bill:

Training professionals use the Kirkpatrick Four Levels model for evaluating the success of training. This four-level model was built upon by Jack Phillips, who added a fifth level.

• Level 1: Learner Satisfaction — This data comes from the training surveys we have all completed at the end of training courses. The point is to ask participants about their satisfaction with the training event.

• Level 2: Knowledge Improvement — The data here comes from tests. Did people learn what was taught in a training course, and did they demonstrate that by "passing" a test?

• Level 3: Behavior Change — Data for this comes from finding out whether people have changed their behavior or otherwise taken action on what they learned in a training course.

• Level 4: Outcomes/Results — Here is where Customer Success Analytics gets interesting. The data for this comes from the results people achieve after applying what they learned in a training course. Did productivity increase? Defects fall? Sales Increase? Costs decrease?

• Level 5: Return on Investment — At this level, we're simply comparing the dollar amount earned on the results from level 4 with the investment made in the training program. If a company invests $50,000 in training and had $50,000 in improvement to the business in the first year, managers can make a decision about whether the investment was worth it.

I'll skip the stats... but surveys of training professionals consistently show that most trainers use Level 1, and as the levels ascend, fewer trainers utilize them. Almost no training professionals use level 5.

Training professionals usually do not have access to data at level 4, for a variety of reasons and because it's too time consuming to collect data at level 3. Finally, training professionals do not budget time and do not have the expertise to really analyze the data and create insights from it. Training professionals generally are very good at collecting and analyzing data at Levels 1 and 2.

Tom:

How do you know whether or not your company should charge for training?

Bill:

Ask the following questions to determine whether you should charge for training:

Is there a market for it?

Open source is an important example. There is a market to learn Linux, Hadoop, NGINX, etc.

Is there a need for the underlying skill?

In other words, learning how to use Hubspot is important if I work at a company that uses Hubspot. However, learning the skill of Inbound Marketing is valuable to any marketer. Charge for the Inbound Marketing training. That way, even non-customers can learn this skill and pay for it. Become known for inbound marketing expertise, rather than just marketing automation software.

Is the product so universal, complex, and mission critical to a business that needs training?

Salesforce makes this point. If customers cannot live without your product at their business, there is value to learning the product well. CRM, ERP, HRIS, Virtualization, and DevOps are all good examples. Even if a customer could use a competitor's products, they still have to use that kind of a product. Training is expected because learning to get the most out of products like these is mission critical to the business.

Tom:

Should training always be run as a profit center, with its own P&L and margin targets? Or if not, what are the factors in deciding?

Bill:

It depends on the answers to the questions above. However, if you do not run your training business as a profit center, it should certainly be run as a business. Factors to help determine include: philosophical approach, company stage in life cycle, nature of the underlying technology, and how prevalent/critical the product is to customer operations (see answer above).

Tom:

In many SaaS companies, Customer Success Managers do a lot of ad-hoc training, and sometimes even formalized training curriculum. What makes a great trainer, and how is that similar or different from what makes a great Customer Success Manager?

Bill:

A great trainer...

1. Understands the audience.
2. Relates a topic to the real world.
3. Brings the topic alive.
4. Facilitates learning rather than pushes it.
5. Is not always an expert (but knowledgeable, yes).
6. Embraces that students are learning the topic and does not get frustrated with learners who struggle (as experts might).

Customer Success Managers have many of these traits, too. With a few key differences. Customers Success Managers become experts by the nature of their job working with customers every day. The problem with experts is tacit knowledge. Experts can forget how they learned something, or might no longer understand how someone else does not know it — they can lose the ability to help someone new to the topic learn it.

Great trainers do not fall into this trap. They understand that the audience is new to the subject. Great trainers thrive in this circumstance. Experts tend to get frustrated.

It's the same secret ingredient that makes great rock stars and comedians. If you can play the same song or tell the same joke night after night with all the enthusiasm of the first time you told it because you know that this is not the 1,000th time you've played that song or told that joke, it is the first time you played that song or told that joke to this audience... then you have the makings of a great musical performer or comedian. That is the essential difference between a great trainer and an expert.

To sum up, more and more companies are figuring out that a well-run training program is an important part of having wildly successful customers. Even for simple self-service products. An interesting next topic to explore is how to quantify the impact of training on customer renewal and upsell.

Bill Cushard is Head of Training at ServiceRocket. His experience building training departments in high-growth organizations helps him lead ServiceRocket’s training services business. Bill is passionate about the "training business segment" of the learning management system (LMS) market and in helping early-stage enterprise software companies build and run strategic training businesses.