The recent financial crisis has created a crisis of mistrust. The faith that customers have in service organizations, which is a key factor for the success of a business, is on shaky grounds. According to several research findings, customer education has a strong, positive effect on customer faith and therefore, customer loyalty.

Firms can benefit from a competitive advantage by sharing relevant business information with their customers. Now why would an organization want to share critical details about service processes with their customers? Does it really make sense to open the black box of service production to customers?

In addition to facilitating customer education by sharing relevant information, investment in customer education can also help the organization in other ways, such as enhancing the perceived transparency and credibility of the business, signaling business commitment, and addressing customers need for control, among others. As a result, customers are willing to collaborate more and reward the business with their loyalty.

Why educating customers is important

Investment in customer education has way too many proven benefits than just helping win customer trust and loyalty. Highlighted below are some key benefits:

• Marketing benefits – Information thats placed online makes your business and brand much more visible on the World Wide Web – the first place todays tech savvy and discerning customer is likely to turn to for information. A strong online presence ensures customers know instantly what they can expect from the product and how the product or service can help in solving their problem.

• Build trust – A clever sales pitch, catchy tagline and well defined USPs for your product or service might help grab the attention of your target customers but are they enough to sustain customer loyalty? Studies have connected educational approaches with increased levels of customer trust. The more a customer knows about your product or service and sees it in action, the more likely that they will trust your business and invest in your offering. Offering more informational content about your offering can help increase transparency of your business.

• Better product awareness – You can boost your customers awareness about the product or service more through an educational approach, rather than a selling approach.

• Enhance after-sales service – The more an individual knows about your product or service, the better their after-sales service experience will be. Access to information or real-time support eventually translates to better after-sales service.

In mature markets qualified by parity products, it is the service quality which sets a firm apart from its rivals. Interestingly, as customer education fortifies customers understanding of business processes, the technical service quality (what is delivered) elements have less of an influence on customer trust as compared to functional service quality (how is it delivered) elements.

This anomaly is because the more that customers are familiar about a product or service, the easier it is for them to see the significance of additional services provided (i.e., timely comment, reaction or vital information about your products etc). Education also helps customers to better discern and appreciate the subtleties of the additional services they receive. Finally, it has been noticed that the more customers know about a product or service, the more they appreciate additional interest (in the form of complimentary offerings) from the business as opposed to viewing it as another sales gimmick.

Customer education is one of the most significant indicators of better service quality that firms can leverage to distinguish their offerings from that of competitors and stand out in a rather crowded marketplace. Considering the investment in terms of time and effort, customer education used to be a seemingly daunting task for firms during the pre-digital era. Today, firms have a host of efficient and effective ways of educating customers at their disposal such as websites and portals that offer easy access to information for customers and can even support service employees in their efforts to inform customers.

How to educate your customers

With the dawn of the digital era, individuals and organizations are learning and adapting themselves to new forms of communication like never before. The advent of IT and social media has made sharing of information and knowledge almost effortless. So today, the question is not so much about time and effort than it is about how you will best leverage the various digital modes of communication to make your customer education strategy stand out. Here are some pointers:

• Leverage the power of your website

Your website is most likely the best tool you have for educating your customers. Being handy and easily reachable at all times, customers can use it to educate themselves, eliminating the need for you to give as much real-time support as you might otherwise have to. Focus on providing useful and relevant information for customers on your website. You can post blogs about the latest industry news and events, share case studies with the customers, or sketch out how your product works. A time tested and proven way to reach more customers is by combining an educational approach with SEO techniques. A successful SEO strategy can bring more visibility and leads for your website.

• User-friendly information

Try to present your educational content in an easy to use manner. This means comprehensible content rather than technical manuals or articles, going light on any language, and making sure that information is logically organized. This is important because people have relatively less time when looking for product service or information.

• Using different tools and forums:

Educate your customers by using different types of communications tools such as:

1. Video – Make promotional videos about your products and services where you can showcase how to use it and make them accessible on your website.

2. Seminars – You can organise seminars to educate customers who might prefer face-to-face contact.

3. Webcasts – Webcast are a brilliant way to reach more customers. You can record them and upload them on your website, or you can hold interactive webcasts too.

4. Social media – Linking your content and promoting your activities on social media can also offer you a wider reach to your customers.
The current findings that point to change in relative importance of technical and functional service quality attributes with increasing customer education suggest that business houses need to appreciate the dynamic nature of customer relations. The much touted customer relationship management (CRM) systems still hold on to a stagnant view of the customer. These systems needs to replicate the reality that customers are growing with the organization over time, constantly learning more and expecting more out of a product or service.

Providers of CRM systems might brag about their expertise in measuring customer competency but there is no replacement for training and empowering service employees to sense these developments in customers and respond accordingly.

The author is Prof. (Dr.) Ajay Mehta, HR consultant and corporate trainer at ERA Business School (EBS), one of the fastest growing Business school in the country located at Dwarka, New Delhi. He can be reached at [email protected].