How to Improve Retention by Training Your Customers
Written by Dave Bailey
Are you struggling to onboard clients? An effective customer training program can improve retention without maxing out your tech team with training.
Imagine you could sit down with each one of your customers and show them the ropes of your product. Sure, it would be very effective, but can it scale? It turns out that sometimes, it can.
A deep knowledge of your customer is an essential ingredient in creating a great product. That’s why it can be so valuable to get into a conversation with them, whether by email, chat, phone, or face-to-face.
So, when I added myself to the waiting list for a new email client called Superhuman, I was impressed to discover that I’d get one-on-one training from the founder himself, Rahul Vohra.
’Wow,’ I thought, ’here’s a company that takes customer development seriously.’
Onboarding as a go-to-market strategy
Offering a one-to-one onboarding session is a smart way to engage in high-quality customer dialogue early on. But I assumed that eventually the company would phase out one-on-one training and replace it with an online process, involving videos and blog posts.
When I heard the founder say that the training was here to stay — and that he was hiring an entire team exclusively to onboard new customers — I scratched my head. Do the economics of onboarding customers really scale?
My favourite metrics framework is called AARRR Metrics (also known as ‘Metrics for Pirates’). The acronym stands for:
- Acquisition — acquiring new users
- Activation — helping users receive value from the product
- Retention — retaining users over time
- Referral — users inviting their friends
- Revenue — making money
As I thought about the benefits of training users, I realized something profound. Training customers has the potential to impact every single one of the AARRR metrics without the need for any product development.
1) Training increases acquisition.
Creating an experience that people talk about is a great way of reducing acquisition costs. However, one-on-one training creates something else that reduces costs: scarcity.
Scarcity is a powerful sales tactic. When training becomes a mandatory part of onboarding, it creates a genuine limit on how many people can start using the product. This can increase people’s FOMO (Fear of Missing Out) which, in turn, increases their desire to sign up.
2) Training increases activation.
Activation is the process of getting users to the point where they can get value out of the product. This might be through seeing friends’ activity in their feed, finding something great to watch, or viewing emails in a new client. The faster you can get users to a ‘valuable’ moment, the better.
A big part of training involves helping users get set up properly, and once that’s been achieved, the trainer can ask questions to help the customer get the most value from the product. I realised that an effective training session is virtually guaranteed to get a customer to their activation point.
3) Training increases retention.
As online services scale, they tend to become more complicated as they build features to cater to more use cases. But as they become more complicated, they also become harder to use.
Take Google Analytics, for example. To someone who’s never seen it before, it can look terrifying. Google Analytics leaves users to fend for themselves, providing little more than video libraries, pop-ups, and documentation — sorry Google, but you’re an example of the bad user experience here.
Superhuman, on the other hand, addresses its own complexity by providing upfront training, which increases the chances of people sticking around.
4) Training increases referrals.
Spending one-on-one time with customers is the perfect way to evangelize them. Customers who understand the benefits and attention to detail of a product are more likely to talk about it. Moreover, excitement is contagious and you won’t find a more excited person than a founder showing off their product.
For me, just the fact that I was getting one-on-one training was remarkable enough to share with other people who I thought would benefit from the product.
5) Training increases revenue.
Decreased acquisition costs and increased retention have a powerful effect on subscription revenues. Let’s look more closely at Superhuman, which costs $30 per month.
Let’s say that Superhuman pay $60 per hour, all in, for their training team. A 30-minute training session costs the business $30. Once the product is set up and the customer knows how to use it, they might stick around for five years. That’s $30 x 12 months x 5 years = $1800. That’s a pretty good return.
What businesses can benefit from this approach?
An email service may be the ideal candidate for a high-touch onboarding strategy. Changing email clients can require some technical knowledge that makes it hard for most customers, and learning a new system and its new shortcuts makes it difficult to switch again later on. Moreover, the target audience — executives with overflowing inboxes — have the money to afford a $30-per-month solution.
With obvious ways of reducing training costs — for example, with group training sessions — I expect to see more companies adopt similar approaches. Almost every early-stage company could benefit from the interaction with clients, the increased scarcity around launch, and spreading word of mouth from evangelised customers.
The question is: What have you got to lose by speaking directly with your customers?
Continue reading about customer retention:
- Fleshing out marketing plans for your new product? Here’s a guide to creating a product distribution strategy to suit your needs.
- Looking to hire talented salespeople? Learn what you need to know about sales team structures.
- Wondering if your MVP is ready to be released into the world? Read this guide about how to discover your product-market-fit.
Originally published May 21, 2019, last updated Aug 19, 2021
About Dave Bailey
Hi, I’m Dave Bailey and I coach tech CEOs from Series A to pre-IPO. Join 20,000 entrepreneurs who receive my new essay every week.
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