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Most products have a learning curve, especially SaaS products that can be relatively complex and hard to set up. Unless you help your customers discover the full capabilities of your product and incorporate it into their lives, you risk losing them to a competitor who does a better job assisting them.
Enter customer education.
Customer education not only helps you retain customers but also serves another purpose – boosting brand awareness. This happens because, unlike customer enablement and customer training, which are product-focused, customer education also means sharing knowledge about topics relevant to your niche or industry.
Therefore, it’s addressed to prospective customers as well as existing ones, and it’s a smart marketing strategy to attract leads while showcasing your expertise and building trust.
How do you know if your customer education program has brought value to your business? We have singled out the top 7 Key Performance Indicators (KPIs) that hold the answer to this question.
Let’s see these KPIs, why they are important for business growth, and how customer education plays a role in shaping them.
7 KPIs That Measure Customer Education Effectiveness
The following 7 KPIs demonstrate the impact of customer education on your business goals. Monitoring them regularly will help you improve your training offerings and stay on track with your goals.
1. Course Completion Rates
Completion Rate (%) = (Number of Students Who Completed the Course / Total Number of Students Enrolled) * 100
The course completion rate is a metric that indicates a positive learning experience and customer engagement with your program. Although not a business metric, it’s an excellent first indicator of success – it means that your program has successfully attracted prospective customers, leaving a positive impression, and has managed to hold the attention of existing and new ones.
This and other learning and engagement metrics (time spent on activity, certifications issued, quiz scores, etc) can be accessed via your Learning Management System (LMS).
Learning Management Systems (LMSs) like LearnWorlds offer even more in-depth data, including course performance and course sales. In addition, our platform offers a Survey builder that enables you to capture new lead information and create surveys – including NPS – to gauge learner satisfaction with your online courses.
2. Customer Acquisition Cost (CAC)
CAC = Total Marketing and Sales Expenses / Number of New Customers Acquired
Customer Acquisition Cost (CAC) is the amount of money a company spends to gain a new customer.
To calculate CAC, you add sales and marketing expenses (e.g., advertising, marketing campaigns, sales team salaries) and divide their total by the number of new customers you gained during a specific period of time.
How customer education reduces Customer Acquisition Cost: As we mentioned, customer education can be part of your marketing strategy.
By proactively offering valuable resources, you generate leads, establish yourself as an authority, and start building trust even with people who are not yet part of your customer base.
Not to mention that customer enablement creates happy customers who turn into brand advocates and leave positive reviews for your products or promote them through word-of-mouth advertising, both of which are essentially “free” advertising.
Moving past the initial investment, customer education strengthens your brand and decreases the money you spend on marketing – which is undeniably the most costly factor in the customer acquisition equation.
3. Customer Churn
Churn Rate (%) = (Number of Customers Lost During a Period / Total Number of Customers at the Start of the Period) * 100
Customer churn is one of the most “burning” KPIs for a company – and you want to see it go down. The simplest way to calculate the customer churn rate is to divide the number of clients you lost during a certain period by the number of customers you had at the beginning of that period. Multiply by 100 to get the percentage.
You need to decrease churn and increase customer retention for two reasons:
How customer education prevents customer churn: Customer education is an effective way to boost customer retention rates because it ticks several boxes in one go.
For starters, an onboarding process minimizes time to value and helps new customers set up your product and start using it shortly after they purchase it, which decreases early churn.
Further down their journey, they will discover more use cases and functionalities and maximize the value they get from it – so why risk switching to a new product that might fail to meet their needs?
Last but not least, educated customers have a better user experience. They encounter fewer technical roadblocks, and they need to seek support less often – and when they do, it’s available 24/7 in the form of a knowledge base.
Do you want to learn how you can yield a positive ROI from customer education? Watch our on-demand webinar with customer education expert Vicky Kennedy for practical tips and strategies.
4. Sales Growth
Sales Growth (%) = (Sales in Current Period – Sales in Previous Period / Sales in Previus Period) * 100
Sales growth signals success loud and clear – for many businesses, this is the ultimate goal and key to survival.
The only downside of this customer education metric is that sales growth can result from multiple concurrent business initiatives, so it’s hard to pinpoint the exact contribution of customer education.
How customer education drives sales growth: Customer education drives sales growth in multiple ways. For one, it boosts brand awareness, perceived authority, and positive word of mouth, which makes it more likely that people will choose your product over a competitor’s who might be lesser known.
Your sales team can also use it as a testament to the level and quality of customer service you offer. Most customers appreciate having access to self-service tech-touch onboarding and prefer it over contacting support agents to resolve minor issues.
5. Customer Satisfaction (CSAT) and Net Promoter Score (NPS)
CSAT (%) = (Number of Satisfied Customers / Total Number of Survey Responses) * 100
Customer Satisfaction Score (CSAT) is another critical metric. It’s usually measured by asking customers to rate their satisfaction with your product using a linear scale. Satisfied Customers are those who give a positive response (typically selecting the highest satisfaction scores, such as 4 or 5 on a 5-point scale).
NPS = ( (Promoters / Total Respondents) * 100) – ( (Detractors / Total Respondents) * 100)
Similarly, the Net Promoter Score (NPS) is measured by asking “How likely you are to recommend our product to a friend or colleague?” Ideally, you want to get “extremely likely” responses.
Customer satisfaction and Net Promoter Score reflect a positive customer experience and indicators of future growth.
They usually go hand in hand with positive online reviews that build social proof for your brand. Therefore, you want to have happy customers who give your product the “thumbs up.”
How customer education improves Customer Satisfaction and NPS: Customer education offers customers the tools to learn your product and use it with confidence, getting the most out of it. So eventually, they’re happy with their purchase; as simple as that.
6. Customer Lifetime Value (CLV)
CLV = ( (Average Purchase Value * Average Purchase Frequency) / Customer Churn Rate) * Profit Margin
In this formula,
Eventually, Customer Lifetime Value is the average revenue generated from a customer for as long as they remain your customer.
Businesses often compare Customer Lifetime Value against Customer Acquisition Cost to predict profitability and make the necessary adjustments to increase CLV, especially via marketing and product development.
Naturally, you want this number to be as high as possible, as it’s directly related to your bottom line and, in the long run, your business’s survival.
How customer education increases Customer Lifetime Value: As we mentioned before, a customer education program encourages product adoption and boosts customer loyalty – which is how it makes the most difference in increasing CLV through upsells and renewals.
Repeat customers sign up for higher plans, renew their subscriptions, and buy several products from your brand.
7. Customer Support Tickets
The first way to measure the impact of customer education on incoming tickets is to compare the number of support tickets before and after the training.
This method will give you an indication of the impact, as a decrease (hopefully) might also be attributed to other factors, like an update of the product’s user interface that made it more intuitive and easy to navigate.
The second method is to compare the number of support tickets that come from trained vs not trained customers. This method can demonstrate more clearly the exact impact of customer education, even if from a slightly different perspective.
In any case, a decrease in customer support tickets means less workload for your team, better quality of customer service, and fewer customer support costs as your customer base grows.
How customer education reduces customer support tickets: When customers have access to a knowledge base with on-demand training content (webinars, articles, guides), they are less likely to reach out to your support team and your CSMs (customer success managers).
Ready To Maximize Your Business Performance?
Customer education can complement other business growth strategies and safeguard your place in a competitive market. Aligning your customer education program with your business goals and monitoring its results using relevant metrics will increase your chances of success.
LearnWorlds offers all the tools to build a vibrant customer education academy – from website builder and content authoring with AI to in-depth reporting on everything that matters, CRM and customer service integrations, and advanced eCommerce features.
Explore these and more features with a 30-day free trial.
Further reading
Androniki Koumadoraki
Androniki is a Content Writer at LearnWorlds sharing Instructional Design and marketing tips. With solid experience in B2B writing and technical translation, she is passionate about learning and spreading knowledge. She is also an aspiring yogi, a book nerd, and a talented transponster.
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