Growth of customers has always been a major focus of business strategy However, is the acquisition of customers sufficient to ensure long-term success? In the current shift of companies to model of recurring revenue Customer satisfaction, retention as well as churn and engagement are now top priorities.

In this article, we'll explore how the notion of growing customer base has developed and the reason why it is only an element of a larger strategy to achieve efficient and sustainable business growth. Let's get started.

  Skip ahead:  

•         What is customer growth?
•         The link between customer growth and recurring revenue
•         Four key elements of growth in an organization
•         How customers are educated can help boost development
•         Customer education challenges and thoughts on the future

What is customer growth?

Growth in customer numbers is the growth of the number of customers a company has.

While customer success can be portrayed as numbers, it's crucial to be aware that this figure represents more than "data." It's the end result of a complete customer experience, one that is influenced by sales, marketing and initiatives for customer success.

The connection between growth in customer numbers and revenue

Today, customer growth tends to be at the heart of discussions about business growth. This model of thinking about growth in business is focused on getting large quickly, acquiring customers as well as closing the sale. And while new customer growth is certainly a part of business growth strategy We believe that the efficiency of growth requires more consideration than it's getting.

Customer growth solely focuses on growing the number of clients, which usually means boosting the number of people that are passing into your sales funnel.

Growth efficiency, on the other hand, prioritizes the optimization of your customer journey, driving higher efficiency in retention and conversion rates, but not necessarily boosting the amount of customers who are able to enter your sales funnel during the stage of awareness.

But don't just take it from us. FlexClip "found that the focus on retention of customers and growth through education have had a more sustainable impact on their growth rate than acquisition alone," shares Jessica Miller who is Partnership Manager.

The author continues "Customer education programs have substantially improved our recurring revenue mostly through reducing churn and increasing engagement with the product. Through helping customers understand the features we offer effectively, we've noticed a direct correlation between better-educated customers and higher renewal rates ."

Acquisition is no longer enough to drive growth strategy. By expanding your growth strategy to include retention and expanding efforts, you will improve the efficiency of growth.

Four key elements that fuel growth in an organization

In other words, if the acquisition alone is no longer enough to propel the growth of a company, what else could?

The solution lies in a combination of retention, acquisition and expansion efforts. In combination, these methods will increase the annual recurring revenue (ARR) in time that is a true indicator of sustainability.

It's not just about growing revenue; it also involves increasing customer retention, sales strategies as well as overall relationships with customers. The following are the four main drivers that can drive this kind of development in a business:

1. Stronger upselling and cross-selling programs

Improving your cross-selling, upselling and sales initiatives lets you generate more revenue from customers whom you've already purchased.

John Russo, VP of Technology Solutions at OSP, utilized this opportunity to grow in his own firm. "Probably among the metrics that really blew our minds was this 25% increase in upsell opportunities among clients who are actively engaged with our education programs," he says.

In the Russo scenario, interacting with an already-captive audience has positively increased revenue, all without raising his customer acquisition cost (CAC).

2. Customer retention and churn prevention

Although CAC refers to the cost of getting customers through the sales funnel, churn and retention represent your ability to keep clients after conversion.

Customer churn and retention are two different sides of a coin. On one side, customer retention refers to the number of customers that continue to use your service or product. Conversely, customer churn refers to the number of customers who quit using your product or service.

A high churn/low retention rate signifies that you're losing customers rapidly, effectively throwing the money that you invested to get these customers right back into the garbage. This means reducing churn and boosting retention is essential to efficient expansion.

To start prioritizing this growth effectiveness, you should consider strengthening customer retention by improving relations with your customers by using things such as personal engagement, anticipatory strategies as well as a comprehensive educational program.

John Russo confirms this: "...there there was a 15 percent reduction in the churn rate when they implemented a more structured and personalized approach to customer education. It is clear that education can have a a positive effect not only on retention of customers, but develops relationships over time that lead to sustainable growth over a ."

3. Customer satisfaction

Businesses that struggle to boost sales to customers typically implement their customer success efforts too late--in after product adoption, only reacting when issues develop. This reactive approach forces teams to catch up and miss the opportunity to build stronger relations with customers from the beginning.

To improve the customer experience business must adopt a proactive approach by implementing strategies like customer education early in the customer journey.

Informing customers about how they can maximize the value of their purchase, you help them get past any potential issues and build trust. Engaging customers in a proactive manner with customized materials, such as online classes, webinars, onboarding tutorials, and ongoing support content--can decrease the load of customer service teams, but can also stop issues in the first place.

The outcome is increased client satisfaction which then leads to stronger retention, positive reviews, and word-of-mouth referrals.

4. Engagement

Customers tend to be more likely to turn into more loyal customers and use new features when they understand what benefits they can get from your service and how they can reap the benefits.

Engaging customers through the customer journey It is possible to strategically implement experiences that educate and inform customers on new and existing offerings at key moments in their journey.

As an example, in only two years Hootsuite launched an academy that engaged over 450,000 students at over 800 universities.

Linking dots The relationship between the education of customers and their growth

So far, we've explored 4 key growth drivers:

• Stronger upselling and cross-selling applications
• Customer churn and retention rates
• Customer satisfaction
• Engagement

Each is a key element in growth efficiency. A strong, comprehensive customer education program can realize each of these in the company.

In fact the Intellum-funded Forrester study found that the annual investment in customer education is at a record high and shows no signs of slowing over the next few years. Customer education isn't just the hot new buzzword; it's an impactful method, and firms are beginning to understand the importance of it, as demonstrated by this report.

In the report organizations run customer education programs to improve the customer experience (customer satisfaction) as well as engagement and use, adoption, and more. These labors are big. The companies that have formalized education programmes reported an almost 40% rise in the adoption of products, 30% of engagement and 26% in the satisfaction of customers.

Understanding that customer education can be a powerful strategy to increasing efficiency in growth, let's pivot and take an in-depth look at the ways to do.

What can customer education do in driving the growth

Education for customers doesn't only aid in the growth of your business, it actually drives it by empowering customers to fully adopt and be engaged with your product. Below, we'll explore how customer education improves the growth of your business, beginning with the use of products that are targeted to training.

1. A rise in the use of specific products for training

The Forrester report showed a 38.35 percentage increase in acceptance of specific products for the formalized education of customers.

Customers can benefit from education to boost new customer growth and see those same positive results across three important areas:

1. Customer onboarding: Customer education is often employed as a way to expand onboarding but maintaining it as a fun and customized. It is also an excellent opportunity to capitalize on growing audiences and capitalize on the high levels of engagement. It is also a great opportunity to capitalize on that interest and target high-priority products and services.
2. Launches of new products: Education for customers should not stop after your customers have joined. Utilize learning tools when launching new services, products, or new features in order to improve customer understanding of that new product or service.
3. Infrequently it's the case that an offer isn't successful. This happens. However, you shouldn't label it as a failure until you've incorporated it into your educational strategy.
    
     Sometimes, an underutilized feature is incorporated into the process of onboarding. But, it is best to do this when that feature is essential to your customer's immediate success or can decrease their value-for-money (TLV). In other cases, think about creating distinct resources to support it, and then promoting them through emails, social networks, and internet marketing.

Education promotes product understanding. When consumers are taught on specific products, they're more likely to make use of them and utilize the products effectively, resulting in greater adoption during those onboarding and advocacy stages of the customer experience.

2. Improved customer satisfaction

When educated on using the product, they are less likely to experience disappointment and are more likely see positive outcomes. These results create an empowered customer who is happy customer.

Companies that have an official education plan have a 26.2 percentage increase in satisfaction of customers. A fact that Jessica Miller, Partnership Manager at FlexClip is a first-hand witness to.

"We examine NPS (Net Promoter Score) which is a measure of satisfaction, and customers who engage with our educational content have a 25% higher NPS score than those who don't," she states. "By empowering customers to create quality videos of professional standard, we've improved their satisfaction and created better reviews and stronger relationship with our customers. ."

Satisfied customers tend to leave positive reviews and engage with word-of-mouth advertising (advocacy) that drives retention and also acquisition. In combination, better retention and better acquisition contribute to stronger growth efficiency.

3. The value of a customer's lifetime (CLV)

Businesses with educational programs for customers see 34.6 percentage increase in their the average value of customer lifetime (CLV) per trainee.

CLV stands for the average customer value multiplied by the average customer time of life.

Looking back at "customer growth" vs. "growth efficiency" increasing your CLV with customer education happens by increasing customer value and the length of time. It can be done through two main ways:

1. Upsells and cross-sells We've already discussed that well-informed consumers are more likely to adopt a product or service. That extends to add-ons and upgrades. Through educating your customers to increase their knowledge, you will be able to boost the quantity of add-ons and upgrade (upsells or cross-sells) your team makes and increase your average customer value.
    
     Miller noticed this when he was at FlexClip: "With more engaged users, our CLV has grown by about 15 percent. It's largely due to customers upgrading to higher level subscriptions after they have realized that they can take advantage of all the features FlexClip provides. ..."
2. A lower churn rate means that customers who appreciate the value of your product or service are less likely to churn. Keeping more customers increases the life expectancy of customers.

4. Higher win rate for the new customers

Your winning rate is how many sales opportunities that you can convert as well as by using customer education it is possible to achieve an increase in win rates up to as much as 28.9 percentage.

There are many ways that customer education can help your company, however it can also be extremely beneficial for the customer. The two ways that it can help these are through reducing their TLV as well as increasing the total value they derive from the connection.

Additionally:

• More informed prospects are more likely to convert the faster you are able to prove the worth of your offer and the more quickly a potential client will be converted.
• Stand out from the competition: Customer education is another touch point in your relationship that allows you to really hone into and highlight your distinctive selling point.
• Give your sales team the tools to succeed to measure the TLV and calculate the value your clients receive from your education programs. Then, share the figures with sales team members to help them during the sales process.

5. Costs for customer support to be reduced

In addition, increasing the number of customer support staff members available, lowering demand for support staff, and cutting down on support costs are three common objectives that businesses seek to achieve when they add customer education to their toolbox.

Studies support this line of thinking. Research shows that businesses with customer education programs see the following results: a 15.5 percent decrease in support inquiries and a 7.2 percentage cut in support costs.

If your customers can access an extensive library of educational tools, they're more likely to troubleshoot independently and reduce the requirement for the assistance of your support personnel.

Additionally, educating your customers proactively helps reduce the requirement for "reactive" customer service, i.e. the catch-up after adoption we discussed in our previous article. This is why we see a lower support cost.

and lastly the customer education program allows companies to expand without having to increase their support staff in line with their overall customer growth.

Challenges in customer education and last thoughts

Clearly, customer education is a key factor in boosting growth however, there are a few challenges. In order to implement a successful education program needs careful planning and resources to make sure it provides the intended value. Yet, many businesses face typical obstacles that could impede their efforts.

The Forrester report outlines a number of these issues, and, if not addressed, could hinder the success of a program and possibly reduce the effectiveness of growth. The top issues with customer education are:

• Lack of tools for developing educational resources. This could include equipment like webcams, lighting, as well as quality cameras, or even software tools such as editing software as well as an education platform.
• Lack of skills and technical knowledge for developing training programs - Just because you have a customer success team, it doesn't mean that they're adequately prepared to launch an effective training program.
• Insufficient labor force for moderating and running programs. and launching a robust educational program with your existing team is possible. However, maintaining your program's effectiveness could be difficult without support.
• Content is lacking - To create the most effective customer education program requires personalized, carefully curated content. Repurposing existing content and going deeper could yield plenty of content However, you'll require more content to give the quality your clients demand from a complete and comprehensive service.
• Lack of budget In the case of any fresh initiative, your teams require a budget in order to achieve their objectives. This budget can tackle any of the above points as well as more.

Numerous companies try to create educational programs for customers without taking into account and addressing these issues. As a result, the programs could actually hinder effectiveness by performing what they were designed to do. goal, i.e., lowering levels of engagement, satisfaction, and retention and increasing churn.

Instructing customers in the correct way

The key conclusions of the Forrester report is that "Creating the right customer education programs takes a lot of effort and planning, but don't try to make a fresh start." A successful customer education has been proven to be a driver of growth efficiency, however, the key to success is thoughtful execution.

Do you want to elevate your strategy to improve customer service the next level?

Download the Ultimate Customer Success Guide for free and begin making a strategy to keep your customers engaged, loyal, and thriving with your business.

  Discover how your business can use customer education for better customer service today.  

  When your customers win and your company is rewarded, too.  

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