If we were to sum up Forrester’s latest report (commissioned by Intellum) on customer education in one sentence, it would be this: 

Customer education, when implemented strategically and correctly using vendors, will boost your top and bottom lines and positively impact KPIs in all business areas – from increased adoption, retention, and lifetime value to lower support costs – and the numbers are here to prove it. 

Honestly, that’s pretty much all you need to know, but if you’re the kind of person who needs proof (which is totally understandable), let’s dig in 🙂

The Rise (and Rise! and Rise!) of Customer Education Spending

Lately, there’s been a major plot twist in how companies think about customer education. 

In the past, many even questioned if it was worth the investment. In fact, whenever the software industry would hit a rough patch, training budgets were often the first to get the axe. It was almost like customer education was the unwanted guest at the budget party, always in danger of being shown the door.

But now? 

Customer education has gone from being the wallflower at the dance to the star of the show, becoming a key part of business strategy. And the numbers? They tell quite the story. 

Back in 2017, the average annual spend on customer education was $401K. 

Jump to 2024, and that number has shot up to $1.1 million. 

And by 2026? It’s projected to hit $2.2 million!

So why has spending increased so much? 

Because businesses have finally wised up to the fact that well-educated customers offer numerous benefits. Let’s get into it.

The Transformation of Customer Education into a Profit Center for Businesses

“There’s a reason education programs have soared in popularity and investment. Organizations are seeing substantial returns from their investment, impacting customer experience and both the top and bottom lines.”

Drive Business Success Through Customer Education,
(Study conducted by Forrester Consulting, May 2024)

Let’s talk about how customer education has gone from a nice-to-have to a total game-changer for businesses. And, spoiler alert, it’s not just about making your customers smarter—it’s about boosting your bottom line, big time. In fact, it’ll be hard to find any other initiative that has such a huge, positive impact on so many business areas and KPIs.

First off, check out these stats on the realized benefits of customer education programs:

• Companies are seeing a 38.3% increase in the adoption of products targeted by training. That’s like getting nearly 40% more customers to say, “Yes, please!” to your products. 
• Engagement and customer satisfaction rates are also way up, which means that people aren’t just using the products—they’re loving them. 

Now, onto the business outcomes:

• We’re talking a 34.6% increase in average lifetime value per trainee. That’s huge! 
• Plus reducing the sales cycle length by 8.1% means deals are closing faster, while win rates for new customers have jumped by 28.9%. 
• There’s also a 7.6% increase in annual revenue for products targeted by training. 
• Retention rates are also up, which means fewer customers are jumping ship. 

Moving onto the impact on customer support…

Companies have seen a 15.5% decrease in the number of support inquiries, and there’s a nice reduction in annual customer support costs. That’s less resources spent troubleshooting and more spent innovating. 

Huge cumulative net benefits

A three-year risk-adjusted financial analysis for a $1 billion composite organization shows that total benefits far outstrip costs, with cumulative net benefits soaring year after year.

• The return on investment (ROI) in this scenario is a staggering 372%, with a net present value (NPV) of $14.1 million and a payback period of just seven months. 
• In addition, 96% of companies have seen a positive return or at least broken even on their customer education initiatives.

Teaming Up for Success: Top Companies Are Leveraging Third-Party Vendors

One of the most interesting areas of the study focuses on what successful companies are doing differently. 

First off, high-success companies are way more likely to have fully formalized customer education programs:

78% of these companies have dedicated teams and formal programs in place. Compare that to just 35% of lower-success companies, and it becomes clear that having a structured approach is key.

But even more interesting is that these high-success firms work with third-party vendors in a highly strategic manner:

78% of high-success companies use vendors in a formalized way, compared to only 22% in low-success firms. 

This strategic partnership means they’re not just outsourcing to save money; they’re bringing in experts to add real value, skills, and innovative ideas to their programs.

And when these companies choose to work with vendors, they do it for all the right reasons:

• They’re looking to gain expertise (43%)
• They want an outside perspective (52%)

On the flip side, low-success companies often outsource just to cut costs or speed things up, which doesn’t really help in the long run.

Further, for high-success companies, having a third-party vendor on board has proven to be crucial for the effectiveness of their customer education programs:

• 87% of them say the role of a third-party vendor is “crucial” or “very important” 
• Compared to just 78% of the lower-success companies

Clearly, high-success companies get way more value for their money. They report higher engagement with their education programs, and their vendors play a critical role in shaping the vision and strategy. 

Technology is a big part of the puzzle 

One of the more interesting shifts over the past few years has been the most common types of education offered. 

In 2019, the types of education offered were:

1. In-person training workshops
2. Training, brochures, handbooks, and other printed material
3. Training videos
4. Real-time online training webinars/broadcasts
5. Certification programs (online or in-person)

Now let’s have a look at the types of training offered in 2024:

1. In-app guides (which didn’t even appear on the 2019 list!)
2. Training videos 
3. Training, brochures, handbooks, and other printed material 
4. Published training documentation in online forums/communities, blogs, etc. (also new to the list)
5. Prebuilt courseware or product/service training modules (another one that’s new to the list)

Digital transformation is revolutionizing customer education

Let’s face it – the rise of digital content and technological advancements have revolutionized customer education. In fact, according to the study, access to data, technology, and partner guidance are three of the factors that high-success organizations point to in terms of driving their program effectiveness.

Here’s how some of the most popular technologies are driving this change:

• Learning Management Systems (LMS): LMS platforms have become the backbone of modern customer education programs, providing a centralized hub for all training materials. 
• Virtual IT Labs (yes, like Cloudshare): Virtual IT labs provide hands-on, practical training in a controlled, simulated environment, allowing learners to practice real-world scenarios without the risk of impacting live systems. 
• Cloud computing: With cloud-based solutions, training materials and programs can be accessed anytime, anywhere, from any device. This ensures that all employees and customers can participate in training regardless of their location.
• Artificial Intelligence (AI): AI is playing an increasingly significant role in customer education, generating content and personalizing learning paths based on individual performance and preferences. 
• Video technology: Infrastructure improvements and increased internet speeds have made high-quality video content more accessible and therefore, more popular. 
• Community and social learning: The rise of online forums, communities, and social media has facilitated peer-to-peer learning and collaboration, making it possible for learners to share knowledge, ask questions, and support each other.
• Integration with business systems: Modern customer education platforms can integrate with other business systems, like CRM and ERP software, which means better alignment between training programs and business objectives. 
• Microlearning: Technology and social media has also facilitated the shift towards microlearning. Instead of relying on lengthy training sessions, companies can now deliver bite-sized, on-demand training modules – which is exactly what people seem to want.
• Data-driven insights: Advanced analytics and big data are providing deeper insights into the effectiveness of customer education programs. This allows companies to analyze vast amounts of data to identify trends, measure ROI, and make data-driven decisions to improve their training strategies.

So, what’s the takeaway?

Here’s the bottom line: Customer education isn’t just a nice-to-have—it’s an absolute necessity for your business. 

So if you’re looking to join the ranks of high-success companies, it’s time to get strategic:

• Formalize your customer education programs
• Bring in third-party vendors to add real value
• Leverage technology to its fullest

Remember, well-educated customers are your best advocates. They adopt more, engage more, and stay loyal longer. 

And companies that don’t get on this train now? They’ll be left behind, watching their competitors zoom ahead.

How can CloudShare help?

There’s no doubt that CloudShare contributes to the success of our customers’ customer education programs. 

For example, an industry benchmark study that we published in 2023 revealed that the current benchmark for online course completion is a horrendously low 13 percent, contributing to increased support costs and customer churn.

However, when CloudShare is used for virtual instructor-led training (VILT), completion rates more than quadruple to 62%. 

Why?

• Students engage in real-world learning and get active practice.
• Hands-on practice in their native environment drastically increases engagement and comprehension.
• Multimodal learning—including chats, quizzes, and in-app video—effectively engages students.

Want to learn how a CloudShare customer uses CloudShare to improve ROI customer satisfaction? Check out this short video. 

Sources: Drive Business Success Through Customer Education, a commissioned study conducted by Forrester Consulting on behalf of Intellum, May 2024.

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