Education as a CRM Tool

  |  January 2, 2003   |  Comments

Shorten sales cycles and create additional revenue streams. What you learn about your customers is often as valuable as what they'll learn from you.

Employees are more loyal to companies that invest in their education. Can we extrapolate this idea and say customers are more loyal to companies that invest in their customers' education? I think the answer is yes. Customer education can be a vital tool for both acquiring and retaining customers and should be factored into CRM strategy.

When I worked at Open Sesame in 1997, one large roadblock was our prospects were not ready to think about building dynamic, personalized Web sites. It isn't that they thought it was a bad idea. The problem was they didn't understand what a dynamic, personalized Web site was or why it was a good idea. Back then it was a "new" concept without much precedent, there were no "best practices" or case studies to help them select the best companies or map the best implementation strategy.

I bet this sounds familiar. In Open Sesame's case, the educational process was about personalization and dynamic Web experiences. In your case, it may be different. Perhaps you educate prospects on bathroom and shower installation techniques. Perhaps you educate them on international marketing best practices. Whatever your industry, educating prospects is probably a large part of your sales cycle.

Education is a loyalty factor. As commodity industries try ever harder to determine what services they can offer clients as differentiators, many turn to education, hoping it will strengthen their brand position and increase loyalty among current customers.

How to Build a Better Mousetrap

The idea is working. Home Depot's television commercials don't sell their products. They sell knowledge. Commercials often focus on workshops and tutorials Home Depot holds in its stores. In these workshops, prospects and loyal customers alike can learn how to install a shower, build an outdoor deck, or rewire a house. Even the corporate slogan gives education a nod: "Shop. Learn. Improve." Home Depot's Web site translates some how-to knowledge online in a "Fix It" section. Following each "lesson," a set of tools and materials required for completing the job at hand is listed. After reading "Patching Large Holes in Wallboard," I realized I needed lots of tools I didn't own. Guess where I can buy them? Home Depot, of course!

If a Cherry Falls in a Black Forest Cake

Want to send me Cherry-Fudge Brownies as a holiday present? (Yes, you do!) Learn to make them at Epicurious. Education combined with personalization (you can save favorite recipes) not only provides an easy way to acquire customers but also builds a house list of loyal chefs and (in my case) culinary dreamers.

For reasons unknown to me, Epicurious does not make it easy to buy ingredients for a recipe. It's an obvious commerce tie-in, which it doesn't do effectively. Kraftfoods.com does a little better. You can print an ingredient list for all your saved recipes, sorted by grocery store aisle. There's still no online commerce tie-in. Maybe it would be easier if ingredients were not perishable.

Dammit, Jim! I'm a Doctor, Not a Grocery Store

OK, you don't sell semi-sweet chocolate morsels. That doesn't mean you can stop reading. MetroWerks is a software company that makes compilers and other software used by developers to create programs that run on platforms such as mobile phones and PDAs. For years, MetroWerks has offered courses at CodeWarriorU.com. If you want to write a program for Motorola phones, you can take "The Hitchhiker's Guide to Programming the Motorola M*Core Microcontrollers." Required materials include a book and some software, both available for purchase via MetroWerks online or an affiliate. Barnesandnoble.com takes a similar approach with Barnes & Noble University (a project I was involved in when there).

Not only do these companies view education as loyalty programs, they also monetize it by offering paid as well as free classes.

Maybe you're a hardware manufacturer. Hewlett-Packard's HP Learning Center teaches everything from designing your own business documents to firewall basics, all with appropriate product tie-ins.

Cold, Hard Facts

Consumer education is a good idea. It translates into real, measurable business success. You can track your users, their purchases, and courses they take and request information during courses. You'll learn a lot about your customers and prospects while generating real return on investment (ROI). I asked Tony Reed for some real numbers. He's CEO of Powered, the company that created the HP Learning Center, MetroWerks University, and Barnesandnoble.com's Online University.

Reed says course-related emails get a click-through average of almost 60 percent, and 62 percent of "students" increase their purchases on related sites. Good news for Kraftfoods.com: Reed tells me over 60 percent of customers identify online learning as a motivator for their offline purchases.

Part of the Sales Cycle

If your sales cycle involves lots of customer education, think about creative ways to become a "learning center." Draw people to your business who want to learn about what you do. Had Open Sesame started an online course to teach personalization, it would have had an automatic lead-generation system. People taking courses are a self-selected group interested in using the technology. They would have shortened the sales cycle, because prospects would have already completed the learning process. In addition, Open Sesame would have been viewed as a thought leader in its category. Had it offered paid courses, part of the sales cycle would have been monetized.

Putting the Education in CRM

Take a long, hard look at your company and the knowledge your prospects require before they engage you. Consider how education can be used not only as a sales tool but also as a way to grow relationships with customers and to learn more about them. Plan to make education a prime component of your CRM strategy in the coming year.

But first, send me the Cherry-Fudge Brownies you learned to make at Epicurious.

Until next time...

Jack

Jack Aaronson is the CEO of Jack Aaronson Consulting as well as a corporate lecturer. Jack Aaronson Consulting works with companies to increase the loyalty and satisfaction among their customers, increasing their profitability. Focusing on multi-channel user experiences, Jack and his team makes sure that your users have a fulfilling and enjoyable user experience across all of your touchpoints. As a corporate lecturer, Jack also travels around the world teaching companies how to effectively implement personalization, loyalty programs and multi-channel CRM. He also publishes a newsletter about Personalization, User Experience and other related issues.

Reprinted from ClickZ

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ABOUT THE AUTHOR

Jack Aaronson

Jack Aaronson, CEO of The Aaronson Group and corporate lecturer, is a sought-after expert on enhanced user experiences, customer conversion, retention, and loyalty. If only a small percentage of people who arrive at your home page transact with your company (and even fewer return to transact again), Jack and his company can help. He also publishes a newsletter about multichannel marketing, personalization, user experience, and other related issues. He has keynoted most major marketing conferences around the world and regularly speaks at Shop.org and other major industry shows. You can learn more about Jack through his LinkedIn profile.

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