A tech recession looms above, and customer spending seems to have seized. B2B companies feel the wrath of revenue cuts. What can you do today to throw the light on the dark area beyond the mountains where the endless void of churn takes over?
On a warm November evening, Sam Bankman-Fried, who has now stepped down as CEO of the crypto exchange platform FTX, stated,
“At the end of the day, I was the CEO, which meant that I was responsible for making sure that things went well. I, ultimately, should have been on top of everything. I clearly failed in that. I’m sorry.”
Thus started the crypto downfall joining the domino effect in the tech landscape and opening the floodgates for massive layoffs.
The weeks spilling into November saw thousands of people being laid off from some of the biggest tech giants, such as Twitter, Robinhood, Asana, Stripe, and many more.
The same tech that celebrated stories of their employees climbing the Himalayas with laptops as they thrived through the pandemic seems to fidget as the narrative today shifts from growth to profits.
Derek Thomson from the Atlantic compares the plight of the tech companies to that of a 52-year-old man dyeing his hair and trading his minivan for a Corvette. He says it is the ‘tech mid-life crisis’ where the metaphorical youth of the tech industry from 2020 that had scaled over endless optimizations and now comes to rest without a higher mountain to scale.
As interest rates bite into bottom lines and VCs tighten their grip on another entrepreneur wanting to explore space, jobs have been shot into the void of post-pandemic inflation. This has injected uncertainty into the market and reduced purchasing power.
Gone are the days when new software was bought for everyone’s whims and fancies. Today’s market would cut through anything that doesn’t make them feel like they have gained something out of it.
How does one make the customer understand their product’s value in a market which threatens to churn?
According to Zippia, companies lose $75 billion each year to churn. To keep the runway smooth, every company strives to keep its customers. Subscription Flow says 68% of customers are likely to stay with a company that offers a great customer experience.
But customer experience is more than just enhancing the customer's touch points with the product. Customerthink, an online community for customer-centric businesses, says a good customer experience strategy analyzes the gap between what is offered and what is expected by the customers.
This gap can be filled by equipping the customers with the correct information through customer education to gain value sooner from the product.
Customer education is a proactive approach to training your customers by increasing their knowledge about your product and helping them reach their ‘aha’ moments earlier in their life cycles.
Educating your customers occurs throughout their journey and starts before they buy your product. Your customer can be split into three categories based on their stage in the life cycle.
Depending on your product’s goals, objectives, and ease of use, a strategy incorporating multiple content formats, from detailed guides to videos, can be put together.
Customer education methods, if not anything, keep you at the top of your customer’s minds.
For example, You Need a Budget or most commonly known as YNAB, is a budgeting app that offers a free live one-hour class every week to educate its customers not only on the importance of having a proactive money management system in place but also on how YNAB can help make this job easy for them.
Other resources are tied to the existing content piece, which is repurposed from earlier live events that make it possible to create a collection of customer education pieces.
But customer education goes beyond what content is created in what format. It is about finding the best way to drive your customers to product maturity and guiding them to find a way to reach their goals. This way, a good strategy helps to accelerate growth and support retention with constant brand recalls.
With better maturity about the product, the customers also tend to become power users and loyal fans, bulletproofing your company against any recession or market swings in the long run.
What happens when the whole world crumbles with a war on one side and a chokehold fiscal policy on the other?
Revenue slump, diminishing profitability, and a slowdown in growth, yes, yes and yes!
But none of this has to mean you lose your customers.
When the going gets tough, we learn to figure out a new way to look at the things we have always looked at and innovate for the better.
Here are five ways to think customer education can help you recession-proof your business in 2023,
Enhancing the user experience starts with the user journey. In a recent blog exploring onboarding, we looked at how appealing to human psychology can help with product adoption.
The same hypothesis can be extended beyond onboarding to the entire customer journey.
We don’t have to dive into the collective unconscious or explore Jungian theories, but we can split personality types into two categories.
Let’s assume customer education utilizes two types of approaches,
Based on people’s reactions to interacting with people, Elearning Industry says that your customers can be broadly divided into introverts and extroverts.
While the introverts prefer to self-place their learning, extroverts would appreciate the experience of learning with mentors or human interaction. It is not a steadfast rule but a loose application of what content works best for who.
When you provide a library of content, you can always notice which user prefers a live demo or customer chat often and which user reads through guides. Seeing this trend can help you provide your user with content formats they are more comfortable learning from.
When we loosely define customer education as helping customers find a solution by creating a knowledge base around the problem, we realize customer education doesn’t necessarily mean the content your business produces.
Take the example of the skincare giant Glossier.
They build a $1.2B business in the competitive skincare industry, leading with user-generated content.
Skincare is complicated. Each skin type is different. Educating users on why they need a product and how it fits their particular use case might take a lot more time. So, Glossier lets people do the talking.
42% of their posts on social media are from users explaining how to use their products.
Similarly, in the SaaS space, as Product Hunt helps start the conversation about the product, communities built by the brands help to keep the conversation going and even help to bring more people to the product.
A recent market research study says that the augmented reality and virtual reality market is said to grow to $114.5B in 2027, with a growth rate of 25.3%.
Baume and Mercier is a luxury watch brand. Considering the hefty price tag of their products, the purchasing decision and customer journey were slow. So they teamed up with Haptic Media to create a virtual try-on experience on their website.
The intervention beyond the screen helped them increase their sales and considerably reduced the time spent on the purchase decision.
With technology at its side, the SaaS space has more opportunities to bring its product closer to its audience. When recording a product walk-through on Trainn, you can turn your script into voice-overs and speak to your customers in their local languages.
With more avenues to move closer to your user, why not apply the same to education and bring it closer to your customers?
Your customer education strategy is effective only based on the changes it creates within your customer base.
Mailchimp suggests the best way to go about analyzing metrics concerning customer education is to pick measurable goals that are consistent with the overall company’s objectives. That can be anything from less support time to more renewals.
Vivekanandhan Natarajan, co-founder of Trainn asks people to stop focusing on churn. Churn is reactive in nature. Instead he suggests to focus on usage-based metrics and on analyzing how to improve the people who’s usage is fluctuating or low.
This would help you understand if your customer is using your product better by the day and to dig into what they get out of it.
Seeing your metrics, can you get a picture of how your customers perceive your product?
Trello, a software that helps teams collaborate remotely has the best advice on why silos are the reason for failures.
When teams do not have a system to communicate with each other and run behind their goals, they lose track of the bigger picture and go astray. This becomes detrimental to organisations because there is lack of harmony and union.
Having a customer education strategy in place, helps your teams work cross-functionally to have better visibility into the customer lifecycle, their movement through it, and understand how close the outputs are to your overall organization’s aims.
For example, Joseph and Joseph, a cutlery brand, works with its content marketing teams to create elaborate meal plans and recipes to make their cutlery more appealing.
How would you mix different functions supporting your customer funnel to create unique messages for your customers?
Last week the investment bank Goldman Sachs announced that the current layoffs in tech do not indicate a recession but a course correction for higher valuations and bearish VC spending. It is a sign of times to come and an augury of conscious spending and learning the knack of keeping your customers close.
Whether recession or not, it is always advisable to build a customer education strategy that holds your customer’s hands as they walk through your product adoption funnel.
Trainn provides an end-to-end customer education solution for all your product needs. Explore Trainn or get on a call with us to understand why a video you can create in the next five minutes can improve your customer experience.