Craig Weiss e-learning e-learning vendors elearning elearning 24/7 learning portal LMS

What’s hurting the LMS market

The learning management system market is breaking sales records and for many vendors increasing their market share and thus their bottom line. But while this is great news, the sad reality is the market as a whole is hurting and in the end its impact, will affect all of us.

The LMS market is strong. Revenues across the board are up, profit margins are healthy and competition is on-going (always a good thing).

But for all that is positive, there are negatives, and these negatives can hinder long term growth for commercial systems.

The Negatives

Features First..Usability Second

I am a huge fan of feature sets and enhancements. They are necessary for the evolution of any system and mandatory to garner more market share.

Make no mistake, there are plenty of vendors out there who believe in the concept of focusing on features and forgetting about usability, under the guise that people would rather have lots of cool blinky things rather than usability.  While this is a great concept for party decorations, it is not for a learning platform.

Why Does it Occur?

Because systems understand the importance of adding features and capabilities to keep their system fresh and updated. Yet, in working towards achieving the mass features path, usability often takes a hit.

Some common traits include:

  • Broadway Effect: Front end looks too busy, end users cannot figure out what to click, where to go, what to avoid – lots of information, flashiness, overload of the senses
  • Illogical – I often see systems that add features that seem as though they tossed a bunch of ideas on a wall and whatever stuck up there, went into their platform
  • Miss Targeted – A frequent guest, whereas they add features or enhancements that do not target their current customer base or future -example: they include corporate yet include rubrics
  • The True Wizard of Oz – Systems forget that the true power comes from the administrator side and thus the importance of usability should be their top goal, not some add-on that people may want

People want new and cool features, but they won’t utilize it, if your usability is difficult or challenging. Focus first on usability and everything else while come into place. Unless of course…

Let’s Do the Time Warp Again

How many times have you looked at a system, only to say to yourselves, wasn’t that available back in 2004 and if so, why are they touting that as something new?

I know, I have.  I see it a lot, especially with social learning and the wonderment of some vendors of  adding a “discussion forum and  text chat room” as part of their solution.  Great stuff, for 1996.

I even see it with reports – and with their “ad-hoc” capability. Again, fantastic – but ad-hoc has been available for 10 years. So, why are they just figuring this out now?

There are a plethora of vendors out there, with blinders on. 

They see their system as super and thus making some minor improvements is all that is required, but lets keep the system as a whole intact.  Part of this reasoning, is tied to size of customer base. 

There is a real fear that any modern enhancements would jeopardize their current customer base, some of whom have been with them for five years or more.

While this is understandable, they forget that they are in the business to land new customers too.  These new customers want capabilities that are current if not “emerging” for their audience.

I often compare this to those stodgy private clubs, whereas everything looks just as it was back in 1890. The rules are the same. The approach is the same. They still have a solid client base. The only thing that has changed is time, but not in their eyes.

Any systems come to mind, that fit this build? I know plenty.

We hear you. Wait, what did you say?

Customer support. Customer Service. Tech Support.

Ever heard of those terms? For some vendors the words are just words, not actually making it happen, and when they do, many charge for the privilege of you contacting them.

While there are vendors who offer full customer and tech support for free, the greater majority either do one of the following:

  • Limited free support – email (workdays), phone (not toll free and again, M-F, 9-5 ET)
  • Yearly fee for service – sometimes listed in tiered packaged approach or for advanced customer services such as 24/7 phone and/or email support

For the vendors who charge a fee there are lots of reasons they come up with, including the mention that they have to pay people (I get it) or in other industries people pay for support or everyone else is doing it or in the case of the limited free option – that this meets the needs of most of our customers.

But here’s the thing, there are costs involved with doing business, because the savings in return can be ten fold. 

While it is true that your customer support or tech support people are not being paid in candy, and thus, there needs to be a cost associated with it; you could offset those costs, with a higher markup or find other ways. 

“Everyone else” and “other industries” is worthless as well, because if that is the case, you – as the vendor- are basing your business decisions on another industry whose product lines are different, and that is a bigger issue then tech support.

Lastly, the software thing doesn’t hold water either.

The last time I looked my Office software, it didn’t cost me $50,000 or more to purchase. I’m sorry, if I am spending thousands of dollars on a system, I expect customer service – at least the first year to be free. 

I know there are plenty of people who say that for many training departments, the budget line for a system and its upkeep does not constitute 50% or more, but in reality it often does.

When I ran a training division for a trade association, we had about 20K members worldwide. Mind you these were companies, some of which had hundreds of employees and generated over 150M a year. My budget wasn’t huge, and I had to go in front of a committee to request the funds. Even more important, a learning management system was a new concept, so having to ask for X, when your budget has always been Y, isn’t an easy sell, especially when ROI is discussed.

The point being is that assuming that everyone can afford the luxury of a system and that the cost of such a system is less than 25% of their budget, is just plain wrong. If you honestly believe that everyone fits into this category, you are on Fantasy Island and Ricardo Montalban
has stopped by your room to see if you are ready for your journey.

Moodle Syndrome

True, people are selecting open source systems, and for the majority of them, it is Moodle.  But, if you look at the actual data, what you see is that the vast majority are in education and government.

Unless your niches or verticals are these two sectors, there is no reason to hit the panic button. Yet, many vendors are doing exactly that.

Here is the thing, what these vendors fail to understand is these markets are selecting open source solutions, often for the following

  • Free
  • Assumption it is turnkey or out of the box ready
  • Tailoring to meet their needs 

Moodle is a big player, but to offset it, offer the ability for your customers to add APIs or mashups, so they can tailor their solution to their needs, or offer feature packages – and let the end user select what they want or do not want (a less expensive approach, since the features are already in existence, so no additional R&D costs are needed)

Marketing

A huge problem in the space.

Go to some vendor sites and try to figure out what exactly are they offering. Their sites seem more interested in pitch and filler rather then showing the product and its key features or functions.

Not only do you see this on their sites, but in their materials.  Recently, I saw one brochure which was explaining what is e-learning and why systems are they way to go. Features were never listed and a screenshot was provided – one, mind you, and it was very small.

From a marketing standpoint – digital is the driver now. Don’t forget that people more people are using  “read it later” or “instantpaper”.  This is especially true with tablets.

I would argue that marketing is a crucial component, if not one of the main drivers for success.

You can have the greatest and most user friendly system out there, but if your marketing and thus marketing campaigns can’t explain it or show it, you will fail.

Failure in this case is increased visibility -which in turn impacts traffic which in turn impacts leads and thus revenue generation.

For social media, realize that certain sites drive traffic to your site, others draw leads and sales.

Facebook is not a driver for sales, and social media is in fact, one component of an effective digital marketing strategy.

Bottom Line

The learning management and learning platform markets are growing, in terms of sales and customer base, but it could be bigger.

But for a many vendors, regardless of their size, their failure to see the above is hurting them and the market as a whole.

So lets make a stand. Right here and right now.

Make a committment to change for the better, to harness your internal resources and make a positive impact to your new and current customers.

And stop the pain for all of us.

E-Learning 24/7

8 comments

  1. Regardless of the whistles, LMS reporting has to be accurate, good, broad and specific to the client. Otherwise, why not just have a website or whatever?
    Help is amazingly important – for the client and the learner. Tell me at the start how I ask for changes.
    Backend support must be good, clear and fast.
    Any bugs and updates must go through complete quality control. I don’t want to do your work nor risk my contract.
    Teach me how to do what I can on my own. Charge me for teaching if you must.
    Keep the bells and whistles coming. I can sell on to client – if not now, certainly “tomorrow.”

    Thanks, Craig.

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  2. I wish I’d written that!

    Agree with all your points Craig. Many of these, particularly the first one on useability, need to be tattooed on every LMS developer’s arm.

    Will you be at DevLearn?

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      1. Folks get tricked by “tricking” out their LMS; when in reality, no one can navigate the thing.

        LMS adopters must learn how to adequately scale up their systems.

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  3. You hit it right on Craig. We just finished usability studies for our current system and then for new systems. It’s funny the little things most systems don’t think about.

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  4. I couldn’t agree with you more Craig.  This is exactly where we came from when deciding to start a business around eLearning software.

    Luckily I think we’re about to see an inflection point in the attention and importance these areas are given by vendors. Usability, customer support, customisation and extensilibty are all areas we spend a lot of time thinking about, and we’re not alone – other companies such as Instructure are raising the standards in these areas as well.

    We started building our LMS because of these exact issues, and the frustration we felt that the big players weren’t doing anything to fix it.

    In short – I agree, and thankfully believe a change is around the corner, from a number of new entrants.

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  5. Nice post Craig. Agree with you on all points.

    Apart from Moodle syndrome, i would like to point out ‘Blackboard’ syndrome as well.

    Every one in LMS industry somehow tries to copy Blackboard, and hence they make mistake by copying their errors/not so good features as well.
    I have recently learned, universities are switching to other LMS after using Blackboard for 10s of years.
    And they have some genuine reason for doing that (other than price).

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    1. I absolutely agree. Blackboard is an overrated system, that has been dominating the education market for so long, people have forgotten that there are other systems out there that is equal to if not better then BB.

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