Virtual training

Why Training is the Key to Overcoming Customer Churn

The CloudShare Team

Apr 08, 2024 - 4 min read
Key to Overcoming Customer Churn

Churn is among the most significant hurdles your software company must overcome — and a low churn rate is one of your biggest indicators of success. But what can you do to reduce customer churn? Is it simply a matter of building a superior product with an excellent user experience? 

Yes and no. 

While the quality of your software does play an important role in churn and retention, customer education is just as essential. The faster you can get prospects through onboarding to product adoption, the more satisfied those prospects will be as customers. And the more satisfied your customers are, the lower your company’s churn rate. Let’s talk about some specific ways you can use customer education to tackle the challenges of customer churn — starting with a brief explanation of what churn is and how it works.

What is Customer Churn? 

Customer churn occurs whenever a customer decides to terminate their relationship with your business. It’s basically a fancy way to say you’ve lost a customer. It exists as a direct contrast to customer retention, which refers to any instance where a customer decides to renew or maintain their relationship with your company. 

Churn rate, meanwhile, is a direct measurement of how many customers you’ve lost over a given timeframe, expressed as a percentage of your total subscribers.

Calculating Your Customer Churn Rate

The process for calculating your churn rate is relatively simple. 

First, define the timeframe you want to measure. Typically, software companies will calculate churn on a monthly, quarterly, and/or annual basis. Note your total subscribers at the beginning of the timeframe and how many subscribers you lost by the end of that timeframe. 

Finally, apply the following formula:

(Lost Subscribers/Total Customers At Start)*100

This will provide you with a percentage value. For instance, if you had 500 subscribers at the beginning of the year and lost 78 by the end, your churn rate would be 15.6 percent.

How a Customer Education Strategy Addresses Churn

An effective customer education strategy should provide new customers with a complete idea of how your software works and how their business can use it in as short a timeframe as possible. This deep knowledge of your product helps to improve both customer satisfaction and customer engagement. 

More importantly, it helps to ensure that your customers are able to maximize the return on their investment in your software. Because customers are receiving such significant value, they’re much less likely to churn. That just leaves one question, then — what can you do to deliver that kind of training? 

A few things.

First, segment your customers based on their needs, pain points, industry/vertical, and any other relevant demographic. You’ll want to create tailored onboarding content for each major demographic your software targets. You might also consider leveraging artificial intelligence to help your team deliver more personalized training content to each prospect. 

For each customer segment, identify which features of your software are key adoption and retention indicators. What do your most satisfied and dedicated customers do most frequently? At what point does each participant in your onboarding go from prospect to customer? 

Equip your sales team with the capacity to provide hands-on demos and training content to prospects and leads. This will allow you to introduce customers to your software well before they start onboarding. Consequently, they’ll be able to progress through the onboarding process much faster. 

Finally, embrace ongoing education and continuous improvement. Create training materials for customers who might be interested in exploring new features of your software or new products from your company. Beyond that, develop educational content that will be relevant to your customers based on their sector.

Other Reasons for Customer Churn

Ineffective onboarding isn’t the only cause of churn. If you’re positive that you’ve made your customer education strategy as effective as it can be, there are a few other issues that may be causing you to lose subscribers:

  • Bad customer service
  • A cumbersome, frustrating, or difficult user experience
  • Buggy software
  • Lack of product-market fit
  • Pricing problems
  • More compelling options offered by competitors

Churn is Only Part of the Bigger Picture

Churn represents one of the biggest roadblocks for a software company’s growth. If your business is able to defeat it while also bringing in a healthy stream of new subscribers, you’ve set yourself up for success. Customer education is a big part of making that happen.

Bear in mind, however, that churn is only part of the equation. Churn rate is like any metric in that it’s best examined with context — it should, therefore, be calculated alongside other metrics such as retention rate and new customer acquisitions. Alone, it doesn’t necessarily provide a complete picture of your business’s health. 

And at the end of the day, that’s really what you’re interested in securing. Interested in learning more? Read about some of the benefits of customer education, learn how education and marketing go hand-in-hand, and read our eBook on how virtual instructor-led training helps reduce churn. Then, once you’ve done all that, reach out to CloudShare to book a demo, and we’ll show you how our platform can help.