7 Ways to Measure ROI on Customer Training
It takes time, money, and effort to create and deliver training programs, and it’s not always easy to understand the value of what you’re offering. This article is aimed at helping customer training teams begin measuring the return on investment (ROI) of their customer training initiatives.
If you don’t measure your ROI, then you won’t know whether your training program is effective, which parts are working well, and which parts need improvement. Most training managers are working with limited resources, and tracking this data can help you allocate your limited budget towards the areas that will generate the best return for budget spent.
Here are the metrics that you need to track to give you the data to successfully work out ROI.
1. Customer Retention Rates
It can cost as much as five times more to attract a new customer than to retain an existing one. Retention is a crucial metric when it comes to measuring customer training ROI. While some churn is inevitable –– no matter how good your product is, it won’t be the right fit for everyone –– an effective customer training program that reduces customer effort should increase retention rates.
Customer Retention Rate = (Number Customers Renewed ÷ Customers Up for Renewal) x100
Long-term product loyalty is a significant indication that your training is working, as your customers are choosing to renew contracts or not cancel their subscription instead of jumping ship at the first opportunity. Measure how many of your customers who have undertaken your training choose to renew their contracts and look at how long they have been with your company.
2. Satisfaction Scores
While retention is an important metric when measuring training ROI, you need to consider it in conjunction with customer satisfaction. Sometimes your customers will stay with you out of convenience because it takes time and effort to go through the research and purchase process, and even more effort to change products and retrain users. On the other hand, customer satisfaction will indicate the number of customers who will be more willing to refer your product to potential customers, and act as ambassadors for your brand and product. That’s why customer satisfaction is so important i.e. it tells you how much of your customers are genuinely happy, rather than just locked into your contract.
Customer Satisfaction/NPS Score = Percentage of Promoters (Satisfaction Score of 7-10) – Percentage of Detractors (Satisfaction Score of 1-6)
When you start a new training program, compare the before-and-after customer satisfaction score to see if customers are responding to your training. Satisfaction scores should start to soar.
3. Upselling and Deep Selling Rates
If your customer training is effective, your product will become an essential part of your customers’ day-to-day lives. They won’t be able to live without it and will fully understand how it makes it easier to do their job. Users across different departments will be so impressed that they will want to know what else your product can do, or what additional services your company offers.
Upselling and Deep Selling Rate = (Upselling Monthly Revenue ÷ Monthly Recurring Revenue) x100
When trained customers move from free to paid, upgrade their pricing plans, or implement additional products at a higher rate than untrained customers, you know that your customer training is paying off. The lifetime value of each customer should also increase in line with these metrics as you start to sign longer-term, higher-value contracts.
4. Reviews and Referrals
It’s not just customers who love review sites. When companies are looking for a new product or service, they check out reviews online, or they ask their network for recommendations on channels such as LinkedIn.
If you’ve delivered effective customer training, then you will see an increase in five-star reviews across sites such as G2Crowd, Capterra, or TrustPilot. Your customers will move from being product users to brand advocates. In addition to reviewing your product, they will also proactively recommend and mention your product in response to questions on sites such as LinkedIn, Reddit, and Quora.
5. Product Adoption and Engagement
Are your customers using your product? Or have they found workarounds to avoid using your system? If they don’t understand your product’s value or know how it will make their jobs easier, they will continue to use old systems and processes to bypass your product.
Product Adoption Rate = (New Active Users ÷ Signups) x 100
Product Engagement Score = (Percentage of Active Users+Percentage of Features Adopted+Retention Score) ÷ 3
Understanding your customer training ROI involves measuring what percentage of your product’s features are used by customers. If your customer training program is effective, then the percentage of customers using more of your product’s features should rise.
6. Time Taken to Get Up to Speed
Your customer training program should help your users get up to speed more quickly with your product. While there will always be a learning curve after implementation, this curve should start to flatten over time. To do this, track the time it takes for your product to deliver value to users. Each product’s value will be different, but what you can measure is the time between a user’s first login and the time that your product delivers its intended value.
Date and Time Value Delivered – Date and Time of User’s 1st Login
For example, if your product helps users build landing pages, you can measure the time between a user’s first login and the time they publish their first landing page. Over time, the time between these two events should get faster.
7. Volume of Support Team Queries
If your customer success team is overburdened with requests, escalations, and issues, then you’re not alone. However, these customer support requests can be a hotbed for training curriculum ideas i.e. focus on creating training content aimed at lowering the number of customer support issues raised. If your training curriculum is working, then the volume of customer support tickets should decline over time.
When users are better educated on your product, they will have the knowledge to resolve minor problems themselves (without contacting your support team), or have access to a coworker (or online forum) to help them. In either case, your training curriculum is helping to reduce the number of support queries coming into your support team.
How Effective is Your Customer Training Program?
An effective customer training program can deliver tangible ROI in several ways. If you provide effective training, it can help you retain customers, improve satisfaction, increase contract values, reduce support requests, and generate reviews and recommendations. If this isn’t the case for your customer training program, then measuring your ROI can be the first step that enables you to identify gaps in what your customers expect versus what your product is delivering.