Customer education programs are educational activities that a company sponsors for the purpose of supporting the product use of two broad categories of current or potential customers: business professionals and individual consumers. Executives view the activity as a strategy to help their companies maintain existing customers and obtain new ones by improving their functional competency and satisfaction.
Organizations frequently use customer education programs to drive competitive advantage, increase revenue and improve customer satisfaction. Benoit Aubert, who leads the School of Information Management at Victoria University at Wellington, asserted that one of the primary goals of customer education is to strengthen customer loyalty. This position is supported by Ed Cohen, the chief technology officer at 9Lenses, who also said that education is provided to customers with the expectation that it will increase customer loyalty.
HR’s Role in Customer Education
Human resource executives began focusing their efforts on customer education in the early 1990s due to a desire to better align the HR function with corporate goals. They believed they could accomplish this alignment by helping the larger organization anticipate customer behavior and, by extension, provide solutions that were more attractive to customers and would result in increased revenue. This belief resulted in the involvement of customers in management development, team building and value-setting activities.
In the last 10 years, companies have demonstrated a more intense interest in this topic, and customer education has become more pervasive regarding the number of programs offered, the number of customers served and the financial investment in the function. Once seen as something that companies offered to benefit customers, customer education programs are now viewed as a service to increase revenue through repeat purchases and customer acquisition.
Jack and Patti Phillips of the ROI Academy point out that the investment in customer education has increased the focus on measurement and evaluation. According to Ed Trolley, the author of “Running Training Like a Business,” and Josh Bersin of Bersin by Deloitte, L&D receives funding for customer education initiatives with the expectation that they will produce a return on investment (ROI) in the form of higher levels of client loyalty and that these increases in loyalty will translate into higher profits for the company.
The ROI Challenge for L&D Professionals
One challenge for L&D professionals is that calculating the business impact of customer education programs has proven to be a difficult task. A 2010 Bersin by Deloitte study on modern measurement concluded that training measurement initiatives needed to expand. Author and coach Phaedra Brotherton takes the sentiment a step further by citing senior training executives, who said that the training industry lacks a measurement methodology that ties financial outcomes to learning engagements. A second challenge is that popular approaches for measuring training impact are geared toward employee-based training and development programs, not customer education. A third challenge is that there is no consensus on how to measure customer loyalty.
Is Net Promoter Score a Solution?
On possible solution is for L&D professionals to use net promoter score (NPS) to measure the loyalty of customers who attend training programs. NPS is a business, not a training, metric and focuses on business impact. The use of NPS as a means to measure customer loyalty is widespread, having been adopted by more than two-thirds of Fortune 1000 companies. NPS is also easy it is to implement.
The NPS measure is a Likert scale that asks participants to rate, on a scale of 1 to 10, how likely they are to recommend a product or service. Calculating NPS is accomplished by segmenting the responses to into three groups: detractors, passives/neutrals, and promoters. Detractors, who respond between 0 and 6, are individuals who are not likely to recommend a product or service to a friend or colleague. Passives, who provide a score of 7 or 8, are neither likely nor unlikely to recommend a product or service. The last category is promoters, who provide a score of 9 or 10 and are highly likely to recommend a product or service. The NPS score is calculated by subtracting the number of promoters from the number of detractors.
HR managers can assess how programs impact loyalty using a modified version of NPS: “On a scale of 0 to 10, where 0 is ‘extremely less loyal’ and 10 is ‘extremely more loyal,’ how did this class make you feel about the company?” This approach would provide both business leaders and training managers with an objective measure of the impact that training had on loyalty.
