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Once you've attracted a customer and helped them onboard, your job has just begun. Now it’s time to focus on helping them stay happy by keeping them engaged and coming back for more. Gallup research has found that, when compared to the average customer, customers who are “fully engaged” represent a 23 percent premium “in terms of share of wallet, profitability, revenue, and relationship growth.” The same survey revealed that companies that successfully engage their business-to-business customers benefit from 63 percent less customer attrition, 55% more “share of wallet,” and 50% greater productivity.
Engagement matters—more than simple customer satisfaction, more than big sales promotions or lower prices, more than loyalty programs—because it helps your company hold onto the customers you have. Gallup calls engagement the “emotional connection between your customers and your company.” The organizations that do it best focus on helping their customers in ways that matter to the bottom line—not their bottom line, but that of their customers.
Here you'll learn techniques for keeping customers engaged and three metrics that help you measure how well you're doing.
As with the other phases of the customer lifecycle, the success of your engagement efforts can be measured by analyzing the data. The biggie here is “churn,” the loss of a customer. While Kelly mentions that customers may stop using your product for reasons that are “sometimes inside your control and sometimes outside your control,” he notes that it's still important to stay on top of churn as an indicator of the overall health of engagement with a customer. As a customer training leader, you’ll want to take this a step further and measure the impact of trained customers vs. untrained customers with regard to churn.
Here's a simple example. If you start the quarter with 100 customers to renew and you lose 25 of them by the end of the quarter, your customer churn would be calculated like this:
(100 customers - 75 customers) / 100 customers
= 25 customers / 100 customers
= 25% customer churn
The first question to answer is, what percentage of those 25 customers that you lost consumed your training? A simple way to answer that is to correlate the data in your learning management system (LMS) with data in your customer relationship management (CRM) system. For example, we could calculate what percentage of the 25 customer accounts marked as “closed lost” that quarter completed at least one training course in the last 12 months. A low percentage here shows a correlation between untrained customers and poor business outcomes (number of active customers in this case).
However, customer and revenue churn are rarely the same in the real world because companies have multiple product lines and different levels of customer buy-in. While you may see a fairly consistent level of customer churn, revenue churn will likely vary over time. It is, logically, dependent on the revenue you were generating from those specific customers who have churned.
Here you can correlate “closed won” opportunities where the renewal value is lower than the planned amount among trained customers. A low percentage here again shows a correlation between untrained customers and poor business results (revenue in this case).
Another vital measurement to track is “negative churn.” This represents your ability to offset churn metrics by increasing the amount you are able to generate from other customers through upselling. If you lost two $500/month customers in a given month and you were able to increase the SaaS fees from another customer by $1,000/month, you've nullified that particular churn metric. That additional buy is also a signal that your engagement efforts are working for that customer.
You can also measure the positive impact of trained customers—what percentage of the customers you retained that consumed your training. In addition, you can ask, what percentage of customers that renewed above their original annual contract value consumed training? High percentages here show a correlation between trained customers and positive business outcomes.
One important non-numeric metric to consider is “referenceability”—how willing your customers are to serve as references for your company. A number of marketing and promotion techniques are much more effective when the voice of your customer is present, whether that’s by offering a quote for a press release, being part of a case study for your website, or fielding a phone call from a prospect. The willingness of a customer to stick with you— and speak on your behalf—says a lot about the level of service your organization delivers month in and month out and the strength of engagement they believe they're getting in return.
A common way to measure this engagement is through Net Promoter Score (NPS) surveys. They are used consistently across industries because they are easy to put in place and provide solid data. Once again, you can correlate your NPS results with data in your LMS. You can keep it simple; simply add a true/false “completed training column” to your NPS results to enable you to calculate the NPS score of those who completed training (true) vs. the NPS of those who did not complete training (false). In my experience, the NPS of trained customers is measurably higher than the overall NPS and certainly higher than the NPS of untrained customers.
About the author:
Pat Durante is the President of CEdMA and the Senior Director, Technical Enablement at Talend. He is an education executive with significant experience in managing sales, customer, partner and employee training initiatives for global technology companies.
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