A Guide to Budgeting for Customer Education
Most software companies educate their customers. That education may take the form of product demos led by sales representatives or onboarding training held by customer success managers. Marketing teams may produce educational content for the company website and product teams may hold information sessions and webinars. As the business grows and the market expands, there often comes a time to launch an official customer education initiative. How should a business budget for such a program? Let’s dive in to consider the costs involved!
The Basics of a Customer Education Budget
Launching a new customer education (CE) program from the ground up requires two assets: skill and technology. The costs associated with these will vary depending on quite a few factors, but this guide will cover the primary considerations for both.
Budgeting for Skills
We’ll begin with a breakdown of skills required. In this article we outlined the primary roles found on a fully operational customer education team, so we won’t repeat that here, but the main take-away is you’ll need to hire for both strategy and execution. You may think that hiring one individual as your first and primary CE hire will be a good starting point, but you’ll still need to budget for content developers as a fast follow. There are very few individuals skilled in everything from business strategy to curriculum design and e-learning development, and you may find yourself stuck in a corner if you’re expecting to hire one person to do it all.
So let’s get real on headcount costs for the first year. We’ll keep it simple and assume that your head of CE will have curriculum development skills and that your instructional designer will develop the courses themselves (as opposed to hiring an e-learning developer separately).
Director of Customer Education: The average US salary according to salary.com for this role is $240k, with a range of $190k to $280k. When determining your budget for this role, it’s important to consider if you have any other individuals at the company with customer education experience. If you hire someone too junior, you risk spending a lot of money on a program without realizing its full potential. On the other hand, you may not need to invest in a senior-level employee if they’d be reporting to someone with relevant experience. Other factors include their scope of responsibilities: Will they manage education programs for one or two products only, or will they manage product education across multiple business units, audiences, and channels?
Instructional Designer (ID): The median salary in the US for IDs is $68k, according to salary.com, with a range between $55k and $82k. However, there are a few considerations for this range as well. An experienced ID is worth their weight in gold because they know how to create effective content that leads to measurable impact. The last thing you’ll want to do is invest in a customer education initiative that doesn’t yield demonstrable results. So, while you may find IDs at a lower salary range, consider a competitive offer to ensure you have the right talent driving content development. Note that one in-house ID can realistically create 1-2 courses a month end-to-end, which is an important fact to consider when setting expectations. If you’re expecting to launch a multi-course learning path within a few months, you may need to hire an additional ID.
There are other skills you may need to budget for, including LMS administration, graphic design, video production, facilitation or training, and data analysis. However, these generally don’t need to be in-house, full-time roles, especially in the beginning.
Considerations for In-house vs Agency
One option to consider is whether you’ll employ content agencies for development rather than hiring in-house IDs. Working with an e-learning agency is a great way to get high-quality content developed quickly, but you may still need at least one CE employee in-house. Agencies rely on in-house subject matter expertise for visibility into the learning objectives required. While you may have staff that really know the subject matter, you’ll still need a point of contact that understands how to translate that material into meaningful learning outcomes that will drive relevant results. A good agency can consult and provide guidance, but there may be missed expectations and opportunities if there is no in-house peer they can work closely with. If you do choose to outsource content development, note that the average cost for a multi-lesson, interactive e-learning course is $4-7k, though this can vary widely depending on the subject matter complexity, graphic elements, and authoring tools.
Tools and Technology
Your newly hired education team will need some tools and tech to develop, deliver, and track the program. Again, the specifics here will vary depending on factors such as content modality, delivery method, and channels, but we’ll outline the basics below. Note that we won’t cover tools and tech that aren’t CE-specific, such as project management software or data analytics tools.
Content tools: Content tools include those used to create screengrabs, UI walkthroughs, and videos. Some common tools include:
Camtasia - $499/yr
Iorad - $500/mo
Loom - price unknown
E-learning authoring tools: E-learning authoring tools allow you to deliver interactive, measurable content. E-learning is a great way to ensure that learners are not only engaging with the learning, but also meeting the objectives of the lesson. Common tools include:
Storyline 360 and Rise 360 (Articulate): $1499/yr per user
Captivate: starting at $33.99/mo per user
Evolve: starting at $576/yr
Graphic design and editing tools: These tools are used to create graphic elements for videos, slides, and e-learning. Examples include:
Adobe Creative Cloud: starting at $37.99/mo per license
Canva: $12.99/mo
Final Cut: $300
Virtual delivery tools: Virtual delivery tools support virtual instructor-led training sessions (vILT). You likely already have Zoom or Meet in use at your company, but your education team may require some additional features, such as whiteboarding and breakout rooms.
Delivery platforms: Customer education is typically delivered via a learning management system or learning experience platform (LMS/LXP), or a digital adoption platform (DAP). While it may be tempting to launch via a content management system (CMS), you will miss out on the opportunity to track meaningful learning analytics that will empower you to make future decisions. There are many, many options to consider and factors to weigh when it comes to selecting a learning platform, so we won’t cover that in this article. For budgeting purposes, it’s important to know that some platforms price per learner while others offer flat rates. Pricing can be as little as $5k a year to hundreds of thousands of dollars annually.
What about AI?
AI is rapidly changing the face of the customer education industry. It seems like every week there is a new AI tool being positioned as a game-changer that will allow businesses to create more with less. While AI can certainly expedite some tasks around curriculum and e-learning development, avoid falling into the trap of assuming it replaces any of the skills mentioned in this article. AI requires the right inputs to produce meaningful results. While some AI tools state that they can turn any content into a course, only a skilled instructional designer will know what objectives should be covered to achieve the expected outcomes.
Consulting and Services Costs
As you can see, building, scaling, and up-skilling a customer education team requires many skills and a wide range of experience. Often, businesses turn to consultants and professional service companies to fill in the gaps and empower them to grow to the next level. There are many former education practitioners who offer their expertise as consultants, and there are businesses like Echtus that offer end-to-end services from strategic design to content development and delivery. And of course, the costs for consulting and services will vary based on needs, but it’s one to consider in your budget proposal.
Looking for support?
Echtus experts are available to help you navigate the world of customer education. Schedule a quick call to learn more.