Customer Training Is Outsourcing’s Hottest Trend
By Paul Harris
Corporate training isn’t just for the workforce any more. E-learning’s advantages and other incentives are spurring organizations throughout the world to outsource the training of their business and consumer customers. Driving the bandwagon is a fraternity of outsourcing suppliers eager to build a new revenue stream.
For executives of software provider Intuit Inc., it was one of those eureka moments. Sales of the company’s QuickBooks software were suddenly spurting, and a new analysis revealed why: Professional accountants were referring the product to their corporate customers after taking an e-learning course that made them certified users.
“We discovered that accountants who received their ProAdvisor Certification were referring QuickBooks to their small business customers at four times the rate of those who simply use the software,” says Rich Walker, Intuit’s director of accountant and advisor relations. “It is a causal relationship.”
Launched two years ago, Intuit’s new customer training initiative is out-tasked to Cleveland-based Convergys Corporation, a business process outsourcing firm that recently acquired e-learning content provider DigitalThink. Convergys Learning Solutions helped create the courseware and now manages the training via its scalable web-based platform, the L5 Learning Delivery System. It supplements Intuit’s classroom training program begun seven years ago with Dallas, Texas-based Real World Training.
Intuit is also part of the fastest-growing trend in learning – the outsourcing and out-tasking of customer training initiatives to suppliers that create e-learning courseware and perform numerous other services. Just like Intuit, many organizations are discovering unexpected benefits from offering e-learning courses on their products and services to business and consumer customers.
The bandwagon is gathering momentum on several continents. Can’t decide which digital camera or cell phone to buy? Step up to the retail store’s handy kiosk and take a tutorial about the product you’re considering. Want to know more about your broker’s financial services and tips on investing? Take an e-learning course on its Website.
The trend is being driven by cost-saving e-learning technologies able to deliver learning inexpensively—when and where they are needed. “Customer education outsourcing is growing at a 25 percent clip,” reports Doug Harward, CEO of The Exceleration Group, a Cary, North Carolina-based management consulting firm that specializes in corporate education. A recent study by the firm estimates that 58 percent of the emerging market in training outsourcing is in customer education, while only 42 percent of the market is in employee education.
Serving the market’s needs is an expanding army of training providers that ranges from small content developers to large business process outsourcing (BPO) firms. They assist their clients in discovering how e-learning technologies enable them to increase customer satisfaction, reduce training costs and increase revenues. The technologies also scale to larger audiences at a fixed cost, decrease the cost of delivery and improve core product adoption rates.
In addition, outsourcing suppliers promise to
- help their customers launch new products with improved communication
- increase satisfaction and loyalty
- enter new geographies with minimal cost
- improve quality and convenience of training through blended just-in-time learning.
They also can get customers on-board more quickly, improve adoption rates of new product features and upgrades, and improve learning with customer and partner certification programs.
Although software and personal technology suppliers are among the highest profile manufacturers to out-task elements of their customer training, they aren’t alone.
Organizations in a variety of fields are turning to e-learning to train their wholesale customers, dealers, and channel partners, often bidding adieu to classroom training. For example, automobile manufacturers rely heavily on learning outsourcing firms to train their dealer networks and other business customers. Among other fields:
● Healthcare. Medical products and pharmaceutical companies are aggressively employing e-learning technologies to train physicians and other healthcare workers on the use of their products. eTrinsic, a Louisville, Colorado, developer of simulation-enabled content and proficiency measurement technology, says its product is used by clients such as Eli Lilly, Bristol-Myers Squibb Welch Allyn, and Merck to train end-users, including non-professionals in home care settings.
● Professional associations. Business and professional associations are out-tasking the development and delivery of e-learning courses to their members to meet certification, continuing education, and other goals. Doing so not only attracts and retains members, but offers a meaningful revenue stream for the organization. For example, the American Psychological Association received US$4 million in revenue in only four months by providing a $300 certification course to members on the Health Insurance Portability and Accountability Act (HIPAA).
● Agriculture. Worldwide agribusiness company Syngenta recently began employing e-learning to reach farmers and other remote customers with training about a variety of product-related issues including applications to promote healthier crops. Syngenta outsources the activity to Productivity Point International (PPI), Research Triangle Park, North Carolina.
Supplements or replaces in-house training
To be sure, customer training is not a new endeavor. “Customer training has always been near to the hearts of product managers,” claims Frank Fedorovich, vice president of commercial sales for IT training company Global Knowledge. “But as the economy has squeezed costs out of organizations, many companies no longer have resources in-house to produce it,” he says. Clients typically seek selective out-tasking relationships rather than the complete outsourcing of all product training, but such contracts can ultimately lead to the outsourcing of entire product lines, says Fedorovich.
Customer training differs dramatically from workforce training in that it is typically a product support activity launched by the sales and marketing department, not from within HR. Marketing executives are not as concerned with an individual’s competency as they are in bottom-line results—increasing customer satisfaction and retention.
Harward says customer education activities normally support indirect revenue generation, such as reducing failure costs and risks in use of a product, or generating sales of core products. Among the most popular and effective customer training models are those created by Cisco and Microsoft. While retaining ownership of its intellectual property, Cisco has created a network of authorized education partners (such as Global Knowledge) that offer training on its products.
For learning outsourcing companies, customer training represents an enticing market that is less subject to budgetary fluctuations than workforce training. “Companies live and die on the success of new product launches, and are committed to budgets that ensure their success,” says Fedorovich. “They will invest in their customers even in hard times,” he says.
Global Knowledge’s own move into customer training was initially driven by requests from clients, says Fedorovich. Its expertise is in IT and enterprise training, where it offers more than 700 courses in 13 languages, covering such companies as Cisco, Nortel, Microsoft, Oracle, Red Hat, and Foundstone.
Global Knowledge recently created a customer-training program for a major client company that supports automobile dealerships with a variety of services. The supplier provided an e-learning course on the financing and insurance offerings available to use for the dealer’s customers. Global Knowledge’s hosted LMS documents each customer’s experience with the course, and then provides feedback to the client company.
The Cary, North Carolina-based company will roll out a marketing campaign before yearend to promote its new customer training services, he says. It will initially focus on b2b and b2c computer and electronics hardware training.
Specialized needs of clients
At Productivity Point International (PPI), the focus is on serving each client’s unique needs, says Mike McIntyre, vice president of outsourcing services. For example, PPI serves client Abbott Laboratories with simulation-based training on a medical device used by healthcare workers. Teaching the course on PPI’s Knowledge Publisher platform ensures that workers are certified on the high tech equipment, making it a valuable litigation mitigation tool as well as an inexpensive delivery method, says McIntyre.
But outsourced customer training is not always an e-learning endeavor, says McIntyre. For example, he says, Hewlett Packard employs PPI to provide classroom training on products each quarter to its channel partners. “In this case, interaction between value-added resellers and technical experts is integral to the company’s success,” he says.
PPI is also emphasizing, where appropriate, the importance of offering training to prospective customers before a sale. Such activities attract buyers to products and win them over. It also helps build lasting relationships, keeps customers notified of new product updates and strategic directions, and upsells them to new capabilities.
At Intuit, a blend of classroom and e-learning meets both customer and business needs, says Rich Golem, group manager of the Accountants Training Network. While the software company continues to offer classroom training throughout the country, especially for small business owners and accountants unfamiliar with QuickBooks, Golem claims that “the most productive and accessible way to train is through e-learning.”
Says Golem: “We focus on expanding our relationships with our accountant customers. Training is a key way to do it, and realizing an e-learning platform has helped us reach our most valued customers.” Under the outsourcing partnership with Convergys, Intuit’s product experts write the course content, and turn it over to the supplier for formatting and programming into its hosted learning platform.
Some corporations offer customer training within a larger comprehensive learning outsourcing context. For example, Sun Microsystems outsources customer training worldwide to Accenture Learning as part of a larger relationship with the consulting firm. Accenture hired 125 Sun instructors and even purchased Sun’s 25 training facilities in major cities. The supplier provides administration and delivery while Sun continues to develop content.
Training outsourcing supplier Convergys Learning Solutions is serving the market with its “Customer Training For-Profit Solution,” a new suite of services designed to enable clients to build and manage a profit-generating e-learning business. Todd Clyde, Practice Lead for Convergys Learning Solutions and former vice president of product strategy for DigitalThink, views customer training as a “full life cycle” that encompasses training both before and after the sale. Convergys provides its service on an out-tasking basis around four distinct areas of specialization: business consulting, courseware development, on-demand technology, and support services.
Clyde says the customer training market represents a different buyer and “hugely different problem” than employee training. “Customer training is an extremely specialized activity that involves far more than simply developing courseware,” he says. Convergys typically begins the client relationship with
- workshops on product strategy and rollout
- analysis of the market segment and audience needs
- curriculum design
- financial analysis.
Development of courseware follows careful study of the target audience to ensure that the design meets the aptitude of the typical learner as well as such technical limitations as bandwidth, multiple desktop configurations, and localization of content. Issues involving interactive courseware, simulations, and performance support systems are also considered.
For example, he says, up-front consulting answers an important set of questions from clients: Can we make money from this? How should we price the online courses? Which products should we move online—entry level courses or the entire certification path? Should we go narrow and deep or thin and broad with the initiative? “We work through those issues with customers, develop an e-learning strategy, and show them types of returns they can expect,” says Clyde.
Technical issues often include whether to use an existing LMS that’s not designed to serve customers and employees from the same database, he says. To date, more than 20 customer training initiatives have been deployed by the Convergys unit and its DigitalThink predecessor.
When considering an outsourcing supplier to perform one or more customer training activities, it’s important to select a supplier with proven capabilities in the industry and the training-related activities of interest. Customer training is an area of specialization, after all.
For example, Raytheon Professional Services LLC, a Dallas-based training outsourcing firm, offers product support expertise among its specialties. The company collaborated for almost 10 years with a global auto manufacturer to train 300,000 dealer personnel on the sale and repair of its vehicles. It also focuses on defense, finance, government, and high tech industries.
Most important, customer training absolutely must be targeted to the needs of the individual, say experts. Because customers normally have an option of whether to learn more about a product or service, “they will only buy training because of the convenience factor,” says one training company executive. “If you fail to provide training when and where they need it, you are leaving money on the table,” he adds.
Executives at Quicken also have advice for companies considering customer training gained from practical experience: “Understand your customers and their learning needs,” says Rich Walker. “And don’t approach customer training purely from a sales perspective. Above all, listen to your customers.”
Published: October 2004