At the intersection of education technology and the B2B customer experience, John Ragsdale points us to the road to profitability (not ruin)
It seems that many in the B2C world are talking about using technology to improve the customer experience as a crucial element of customer success. Not so much in B2B. Why? Is that good or bad? Is this an opportunity missed?
John Ragsdale is an expert in this area. He is the distinguished vice president of service technology research for the Technology Services Industry Association (TSIA). His area of expertise is in assisting enterprise technology firms with the selection and value realization of service tools and platforms, with a constant focus on the customer experience.
John conducts insightful, thought-leadership research and analysis on the most pressing business issues facing services leaders.
His take is that for several reasons, B2B companies are not paying enough attention to modern learning management technology and CRM as important contributors to maximizing the customer experience. Increasingly, the customer experience is a key influencer in the decision to renew because the better the experience, the more is retained, the more value and success are realized.
Let’s understand where we are and how we got here
Ragsdale observes that in the B2C world, companies understand that the customer experience is key to success and they have a vision and a customer success strategy that is all encompassing. Here marketing is in charge of everything that touches the customer, provides coordination and monitors results.
Not so in B2B, by contrast, where there is no continuous responsibility for the customer. Here marketing’s responsibility is to generate leads for sales. Implementation, onboarding, customer training and support are all parsed out to different departments, often with little coordination.
John adds that without an overarching vision or strategy, and responsibility for the implementation of that strategy, customers will have a disjointed experience.
In B2B, the customer experience is more essential now than ever
Ragsdale cautions to look back before we look ahead. In the on-premise training world, the customer paid upfront for a lifetime of technology. The prevailing philosophy was the deal is closed, the check cleared, we’re done. Large or small customer, happy or not, doesn’t matter.
Now customers pay by subscription, but B2B is not using their technological leverage to reach the potential this business model offers. Instead of buying a perpetual license, customers are basically buying by a time period of consumption. If there is no consumption, they are not realizing value. If companies don’t ensure value, there will be no renewal.
This is especially important given the high cost of acquisition. Most cloud companies won’t break even until the second renewal.
Next-generation education technology opens doors
Ragsdale recounts that the first LMS he ever used was limited to converting instructor-led training (ILT) into online training. It was the exact same presentation. Same slides, same narration. Today it’s tailoring bite-sized chunks for just-in-time delivery – sophisticated chunking.
These next-generation learning management systems can tell you who is consuming the content, and whether content is good or bad. Used vs. not used. The granular details of consumption. That is a major contributor to improving the customer experience and ensuring customer success.
Here are some stats that are relevant to John’s point:
- 88% of B2B tech companies have an LMS (though many are first generation)
- 70% have budget for additional LMS capabilities in the next 2 years.
B2B companies have, or are positioning to acquire the required technology.
B2B companies can use the customer education technology to drive personalization, which is a powerful competitive differentiator and should be a core customer success strategy. There are no two customers that are alike. Sure there is overlap, but you need to speak to their uniqueness.
Ragsdale adds an important point – don’t assume you know everything about the customers. People have different reasons for buying your product. Find out what their goals are. Let that drive everything. We need to ferret out what is the uniqueness and tailor our communications, our offers and our learning plans to that uniqueness.
Thought Industries is well positioned in providing this new level of technology.
We need some new customer success metrics
The traditional measures of customer success are customer satisfaction and NPS. Ragsdale opines that these are not effective as they should be, we need some new ideas.
John points to the customer effort score as a big determiner of success. Gartner has a measure that is very helpful in gauging how much effort a customer had to expend.
The Gartner Customer Effort Score (CES) is a customer experience survey metric that enables service organizations to account for the ease of customer interaction and resolution during a request.
Our lives are incredibly complicated. When vendors proactively go in and remove effort, it builds an environment where people begin to love the technology. Apple is an example. They made it baby-simple.
B2B executives should also look at a click stream analysis for information about how customers are consuming your technology. Less than half of education services have adoption and consumption analytics. They need a dashboard to understand how customers are consuming the product so they can design effective training.
Here’s Ragsdale’s advice for B2B companies going forward
- The best choice for B2B companies is to name a Chief Customer Success Officer and form a new Customer Success department.
Customer Success should not be a renamed support organization. Customer Success has 2 goals: adoption and consumption. Our data shows that companies with separate education services and customer success departments, renewal rates are higher, and expanded selling is higher.
- Stop assuming you know what customers want and how they want it.
Classroom is not how people want to learn. It’s inefficient – the information is not retained – and ineffective in driving consumption. Interview your customers and prospects, to build the experience they need.
- Part of the problem is the power structure within organizations.
Education services don’t have a big reputation or a big budget. Sales and marketing do. Simply, education services and customer success must take center stage when the customer experience is in play.
- Embrace support
It used to be that the only people who called for support were system administrators. Now, the second largest percentage of support calls are end-users who don’t know how to use the product. We have to pay attention to these customers with targeted training. Set them up for success.
We need renewed respect for creating learning content in the digital world.
It is much more complicated, and much more important, to create digital content to speed education and consumption. It’s more important than writing code.
To synthesize Ragsdale’s recommendations: B2B companies are at the intersection of education technology and the customer experience. They get to choose the road they go down. Only one leads to greater customer success, higher renewals and increased profitability.