Proactive Customer Education, Customer Retention, and Demand for Technology Support: Evidence from a Field Experiment

Abstract

Do service provider efforts to educate customers influence customer outcomes? We analyze the outcome of a field experiment executed by a major public cloud infrastructure services provider in 2011. 366 out of 2,673 customers who adopted the service during the experiment received a service intervention: an engagement through which the provider offered initial guidance on how to use basic features of the service. Before execution, it was unclear if this proactive customer education would have positive or negative effects on customer retention and demand for technology support. We show the treatment reduces by half the number of customers who churn from the service during the first week. Further, treated customers ask 19.55% fewer questions during the first week of their tenure than the controls. Although the treatment’s effects decay within one week, we show that such proactive customer education can have significant economic benefits for the provider. In particular, we find that treated customers increase their accumulated usage of the service by 46.57% in the eight months after signup. Finally, we provide evidence that the effects of the treatment are strongest among customers who have less experience with the provider.

Keywords: field experiment, proactive service, service co-production, customer retention, technology support, cloud computing.