Management theorist and author Peter Drucker wrote that “the purpose of business is to create and keep a customer.” While the first part of Drucker’s assertion has rung true for centuries, we continue to see businesses struggle with the latter part — the importance of customer retention.

The Subscription Economy Is Here

Modern customers have a wide variety of choices vying for their attention. As their needs have evolved, so have the business models that companies rely on to serve them. In business-to-business (B2B) sales, in particular, we are moving from a transactional to a relationship-based model. Zuora CEO Tien Tzuo, who coined the term “subscription economy,” explains this shift (disclosure: Zuora is a Skilljar customer):

In the old world (let’s call it the Product Economy) it was all about things. Acquiring new customers, shipping commodities, billing for one-time transactions. But in this new era, it’s all about relationships. More and more customers are becoming subscribers because subscription experiences built around services meet consumers’ needs better than the static offerings or a single product.

When people wanted an affordable car in the early 1900s, they bought a Model T. If they needed to make a photocopy in the 1960s, they bought a Xerox machine. They bought these items because they were the only choice, and when it was time for a new one, they went back to the same companies. However, this practice of implicit brand loyalty is a relic of a bygone era.

How can companies effectively compete in this environment and retain their customers? The journey starts with customer training.

Unlocking Customer Retention With Training

High customer retention is built on great product onboarding,” explains Des Traynor, co-founder and chief strategy officer at Intercom (a Skilljar customer). “Can you actually get customers up and running well? If you can get them in and get them set up properly, it absolutely changes the dynamics of your entire business.”

It’s important to remember that product onboarding is not a point-in-time exercise restricted to the first 30 or 60 days of an account; it’s an ongoing process that spans the entire life cycle of each customer. Onboarding includes training both for new customers and for existing users who may need to learn about new product features or integrations or have refresher materials on hand.

For software as a service (SaaS) companies in particular, lifetime value is based on a strong foundation of active, engaged users who understand the value of your product and experience that value regularly. To ensure that your onboarding and long-term training strategy promote customer retention, here are three strategies to consider:

1. Create Customized Learning Paths

It’s not enough for training to be product-focused; it should also be designed to help customers achieve business outcomes. Given the complexity that often accompanies new business tools, as well as the variety of job roles that may use a particular product, it is important that each role or team in an organization has a training program that addresses their specific needs and goals. By creating multiple learning pathways, tailored to provide the most relevant information for each employee, you can ensure that customers absorb training and directly influence product adoption.

2. Track Support Inquiries

If your organization keeps track of support ticket categories, you can leverage this information to design onboarding training modules that proactively address common issues. Start by digging into the “how-to” category of support tickets and documenting the common themes that arise. Then, create content that addresses these topics. For example, if there’s a high volume of requests around a particular feature, consider enhancing that section of your onboarding training, or release courses that address best practices for achieving a specific goal relating to that feature.

3. Create a Formal Strategy Around New Features and Product Updates

Software products in particular often have frequent updates. Every time you release something new, customers need to learn how it relates to their needs and how they can use it — a prime example of why training is important beyond the initial 90 days of an account. Without a formalized training strategy for these updates, you risk having customers who either ignore the update (and potentially lose out on its value) or who struggle to train themselves. The resulting frustration of both groups of customers can spell disaster for the long-term health of the account, as customers feel unsupported and ill-equipped to use your product.

Measuring Retention

Once you have a formal onboarding program in place, it can be tempting to consider it checked off the company to-do list. However, like any other business strategy, your onboarding program requires regular measurement, evaluation and optimization to ensure that it is meeting your customers’ needs. This process is especially important if you want to understand how your training program is affecting renewals and retention. To help you start using data-driven customer training, here are a few questions to consider:

  • Do customers who participate in training renew at a higher rate than the customers who don’t? Of the number of customers who renewed last year, what percentage participated in training?
  • Of customers who churned in a given period, how many were engaged in training?
  • What is the average lifespan of your customers? Are there notable trends among the accounts that have been with your company for several years when compared to the accounts that churned within a year?

Concluding Thoughts

Over the course of his life, Peter Drucker witnessed firsthand the evolution from door-to-door sales to department stores and malls to the early years of online shopping and mobile commerce. Throughout each of those eras, Drucker believed that “the quality in a product or service is not what you put into it, it’s what the customer gets out of it.”

As technology continues to increase in complexity and the competitive landscape across nearly every industry continues to expand, customer retention will increasingly depend on organizations’ ability to demonstrate the value of their product throughout the entire customer life cycle. The most effective, engaging and scalable way to drive this value over the long term is with a training strategy that places customers — both their needs and their desires — at the center of your efforts .