L&D. Training. Two departments known at most companies as dollars spent, show me the ROI. Yet we all know that ROI in hard numbers isn’t an easy task. We push the productivity increases, sales increases, safety issue decreases, happy employees and retention as proof that Training or L&D is successful and thus here is the proof with ROI.
Tell people at your company, business, firm, association that you can make money with e-learning and make training a profit center, many times, you will get a “sure, sounds great”, with snickers behind the go for it.
I’m here to tell you, not only can you establish revenue with B2B/B2C training via e-learning but do it in such a way, that it becomes RR – recurring revenue and customers/clients/members/partners into repeat buyers.
Where you are running a profit center. That’s right a profit center with training. And what are the perks of achieving that?
- More money for your budget – If you generate 500K in a year (and I have, via e-learning), you will get a bigger budget for the following year, more line items approved and more support (if it is lacking).
- Possible more resources – need marketing help – generate anything over 100K, and you are likely to get that help. Perhaps you need an ID person, generate 250K a year, the game changes – better for you and what you want to accomplish. No, can become a thing of the past, after all, if you are profit center (thus in the “black” and not in the “red”), a company would be hard pressed to say, nah, let’s just stay the course, and sorry no funds for you.
- Procurement making the final decision on what you need, can disappear, especially when you start to cross 500K or even 1M a year (both are doable). A C-Level is going to start noticing because you are generating revenue for the company, and thus you are a star. Nobody likes to lose stars.
The Mechanisms for revenue
Before I start to cover everything, for those non-profit folks reading this blog, I turned training via e-learning from “red to black” and into a profit center (by charging other agencies who attended our webinars, online courses, etc.). While you can’t be a standalone profit center in a non-profit, you can still make money. And, all those items above (sans procurement which usually doesn”t exist in a non-profit), are in play.
Where can you make money?
Here is a list of the ways to generate revenue with B2B/B2C, regardless of your brand name or lack thereof, in other words, it doesn’t matter if you are small or mid-size or super large or an association or initially all ILT with your clients, and now need a new way to make money. Heck, you could be an e-learning company who provides online learning to your customers.
- Charge for online courses – An obvious one, and the one most follow – but what they forget is the idea that it is a one-off and thus, if you want to them to return, and upsell to do so, it’s a mixed bag – it comes down to the quality, which many in the B2B/B2C space tend to ignore.
- Charge for webinars – The days of a hybrid model where you did ILT (seminars) and did some webinars (via web conferencing) are gone. The hybrid model worked for many, but unless your customer base are blue-collar, or front-line and thus have to physically be on site, then it is out the door. Anyone who believes that in 2021, we are going to get back to normal in the business world, even association world, is going to find out the hard way, that’s it is not going to happen.
On top of that, with the majority of your customer base working from home, there are more opps that ever before. On-Demand is far better with usage, than going only live – whereas numbers will drop due to being on too many web meetings. In the end though, webinars are money makers.
- Certification Program – A staple for the association space, regardless if you are a trade or professional, and a fantastic way with e-learning to make a lot of money. Even if you are not an association, but want to create a certification program for your customers, it is doable. Sure a Microsoft Certification for xyz is already out there, but most of us are not Microsoft nor offering a certification program in IT. That said, it doesn’t mean it can’t work.
Put it this way, as I noted on social media the other day, I remember hearing from an association exec, who “laughing” was telling me how much money they were making in their certification program. When people failed the “test” to move up to the next level, they had to buy more materials, and go all over again.
- Create Packages – PDFs, online courses, webinars, and something else I will cover that many in the B2B/B2C space overlook. A package can do wonders.
- Pricing strategy – The number one winner or bummer in terms of sales. Too many folks think charge high because the content is from us, and therefore we will make a lot of money. Clearly it depends on who you are, but even then, recurring revenue may be far different. On top of that, we are in a new world with COVID-19, and a serious recession in the states is coming. Globally, it is already here. Companies are no longer paying to have their employee take a fee-based online webinar or e-learning course. They are scaling back. You think they are going to pay for $599 webinar?
The strategy I will recommend, has from my experience a proven track record. On top of that, one of the biggest companies in the world, Apple, used this strategy when they launched iTunes. The name of this strategy? Blue Ocean.
Write that down – Blue Ocean.
A topic that easily could be a separate blog post, with the amount to discuss, so with this post, I will focus more on key takeaways and approaches, rather than going into all the nuances of achieving success (which will be covered in Dec on certification programs through online learning).
Keys to Success
Any type of certification program has to be rigid. I mean if over 80% of people are taking it, completing it and passing, that will water down and weaken the value of the certification program, on the other hand if only 2% are passing, there better be some major takeaways for doing so because a certification program will always be a WIFM (What’s in it for me).
Items any certification program must have to get people to want to take it
- Intrinsic value – A customer going through a certification program, again regardless if the are a member of an association, a client, a customer of your solution/product/services, there has to be a benefit for them, because a certification program takes time, commitment, and yes, challenging.
When people go through certification programs they are likely doing it for one of the following reasons
- Credentials open up more hiring opportunities. I get the certification credentials and if I am (an employee) at some company, I hope that it leads to a raise, better salary, promotions and/or more value for the company to retain me. If it doesn’t come to pass, when I am looking for another job, those credentials will swing the job my way all things being equal.
- Credentials in some way, reinforce that you as an individual, spent the time to acquire them, expand your knowledge and will in some way help you. Nobody goes through a certification program, just for the fun of it.
- Helps their business – if you as the business owner goes through a certification that enables you to attract more customers as a result of it, then it is worth it. If you are brick and mortar or online only or a combo, showing that certification logo can be huge – but only if your customer base knows what it is. If they don’t then, you can still make a difference because you can say “this certification that my employees achieved makes us more qualified in blah blah” than those other places.
- Feel Successful. Nothing wrong with this, so do not see it that way. But anyone who goes through a certification program of any sort, will feel better about themselves when they receive the certificate and credentials. Look hard work is well hard. And thus, by achieving something so few do, you are showing everyone you can not only do it, but you did. That deserves in of itself a huge kudos.
Certification Programs Best Practices with e-learning
- Have everything clearly defined – with deadlines to complete the work or specific requirements that the individual must do to get to the next step – the final assessment. Some certification programs do a mix of project work (individual projects) and a final assessment, some just do the project options, find what works for you.
- Shows Extrinsic value. Intrinsic we talked about, but it also must have an extrinsic value – especially with businesses, and even association members.
- Go Online Proctoring if you are doing a final assessment. There are some good ones out there, and from a learning system standpoint some vendors in the B2B/B2C market are adding this capability. One e-learning vendor who has as part of their assessment solutions has an online proctoring component is Questionmark. They can integrate with any learning system out there. If your learning system vendor focuses on employees and also customers, they should be able to support an API or SSO with Questionmark or other online proctoring solutions. Be aware that online proctoring doesn’t always mean someone is watching the test taker, in some cases it is a recording, which you, as the person overseeing the program, is watching.
- Consider stages. – Okay, you complete and pass this stage you get this. Now in the next stage, you can get this. This best practice isn’t a one size fits all, but if you want recurring revenue, it is the way to go, as it relates to a specific certification program. CFA is one entity, that has levels, but in their case, you have to pass all three levels to get that CFA designation. And people pay a lot to do it.
- Don’t overcharge – Nowadays people are not going to drop $1,500 for a certification program, you have to recognize the economics here. Check out any site related to consumer spending indicies or the latest info on it. Check out your own industry. Consumer spending is a better route to assess. If you are in a recession or if consumers are not buying, you think they will pay a grand plus for your program?
- Most people – customers – go it alone – another reason not to try to bust the bank.
- Good Rates to charge – With one-time, I wouldn’t charge anything higher than $595 in current circumstances for members. Economy improves, COVID-19 vaccines are available to the masses, then $795 or $995 could fly – but it depends on who you are, what is the certification and the value of it.
If you are an association, you charge for a certification program. Members pay this, non-members pay that. Perhaps you offer the certification program for $275 for members, and $595 for non-members. You can state these are special rates due to the pandemic – nobody will find fault with this. Then when things rebound you can boost up, so members it is $475, non-members $995.
- Failure rate – 50% is a good rate. I mean no one is going to stay clear if your failure rate is 35%, but unless you are like the CFA, where a passing rate is around 2%, and thus a failure rate of 98%, your program isn’t going to get people to invest, especially when YouTube or Coursera is around with free online content, that folks think will suffice.
Online Courses for customers/clients/partners/members (i.e. B2B/B2C) with Blue Ocean
In a nutshell, Blue Ocean is all about building mass through a low price point. There are learning system vendors who use Blue Ocean to get, wait for it, you as the customer.
Like I said about iTunes, Apple came out of the gate charging 99 cents per MP4, whereas the competition was multiple dollars and those who weren’t paying and going via Torrents, were staying clear. 99 cents is really in many eyes, not a lot of money. Heck it costs a $1 (not including tax) for a McDonald’s soda (in the states).
Don’t Forget – another reason to go Blue Ocean
YouTube and folks like Coursera. YouTube is where a lot of people go to check out “how to do” videos, which are done by folks who use the product often and call themselves “experts”. You are really the expert because it is your product/service and thus you should know it inside and out, and even tips and tricks to go even further.
Coursera is a MOOC offering that follows synchronous based learning, with low completion rates – a big minus on MOOCs. Engaging? No way.
Udemy isn’t cheap – another solution folks look at. It’s fine for general – how to do cold calling, not how to do cold calling with Zig Ziglar for example. OR with your product – how to close deals with Widget Grass – isn’t the same as how to close deals. One is generic, one isn’t.
Some companies look at what their competitors are charging and just follow. Why? Do you think they have figured out the magic sauce and are making massive amounts?
I don’t know how much money Intuit is making, but one course is $395 – Online on Quickbooks, the last time I looked. Outrageous ripoff.
You are a competitor, with your product, customer debates between you and QB – you offer a wealth of online courses, on-demand webinars for only X. X is significantly lower than Quickbooks.
Here is the Way I made e-learning training into a Profit Center
I never charged more than $35 for an online course. They received unlimited access, to take it as much as the way, as often as they want in a 12-month period. The course was asynchronous (i.e. non-linear, so a person can go right to whatever section, rather than having to complete the first section, before moving on). with a Table of Contents (you want success? Go this route). Additional resources were provided in the form of downloads.
Most of the time, I went around $25.
Here is how I came to these numbers.
- In many places I worked at, they never had e-learning before, hence, no data to review Or worse, they did ILT only and still had no data of use. If you have such data as it relates to e-learning, you will start to see a trend of usage, and thus this type of calculation will be much easier for you, because you have a starting point.
- I projected conservatively my usage. It will take you about three years to build mass in B2B/B2C usage. Do not think, “if we offer it, they will come” – because it usually doesn’t happen that way, and then many people give up in offering it.
First take the cost of the learning system you are using. Let’s say based on your projections, you think in year one you will have 2,000 customers on the system. The cost of the system to you is $50,000.
The cost of you to build a course via a 3rd party authoring tool (base on the license and not, on your salary or whoever you have working in your company creating them) is $1,495 (the fee usually Articulate charges, since many use them. I wouldn’t, but that’s just my take).
If you hired someone outside of your business to create the course (I hope it is a couple for the rate), then you will factor that in.
Let’s though say you bought a 3rd party authoring tool, maybe some assets for say eLearning Brothers (est cost $400, but check with them, because I just whipped out that number). Total cost 1,895.
Total Cost with the system – 51,895
5,000 user base – The amount of money you need to break even per course (with a 5,000 user base) is $10.38 cents (USD). Now, if you charge say $25, the amount you will generate if you only 5,000 people take that course is $75,000 (USD). Even if you were to go $19.95, the revenue you would generate will be about $48,300 (USD). That is for just one course.
Have three courses, and now you are starting to see how the revenue goes up.
Let’s say you have 1,000 user projection and the system is $35,000. Frankly for the user base it is too high, but it is just an example.
At this number, $36,895 – which means the cost for that course is $36.89, so yes, in this case, you are going to have to increase the fee for the course, and go above to break even. Perhaps you go $49.95, or $49.75 per the course.
What you can do though is play with the mind – it is called neuromarketing. You plan to charge only $35 for the course. I know you are thinking I am losing money here.
But with that cost, you start to see higher numbers. You end up with 2,000. Now the fee to break even is $18.45 per end user.
Or perhaps you say, for just $10 more you will receive our Webinar Series (with three webinars on blah blah and blah blah). Again, $10 is a low price point, and not one folks normally balk at. Now, $35 goes to $45, and you are generating profit with the course.
On the webinar side – let’s say you are using Zoom Video Webinar up to 100 attendees, the cost is $400 per license. Just for kicks you buy two licenses, since two different folks are going to manage these for you.
Total Cost for the year -$800. Most of your webinar sessions probably you get 20 people, unless you get some famous person, you know like me – kidding, kidding. Or am I? HA.
Anyway, at 20 people per session, you are going to say, okay Craig that means $40 per session. Yes, but only if you are doing one session a month, and trust me, you will not want to do that.
If you run four sessions a month, what is the cost now? $10 per session, with 20 people.
You charge $19.95 – That is 9.95 per person profit.
And that is if you only do four sessions a month. Eight a month on different topics? Even with only 20 people – $5 to break even. And now you start to see how you can really make some money.
Go Big or Go Home
I am going to propose something that many B2B/B2C do not realize, but could play and provide you a big win. It is something I did at multiple places I worked at with B2B/B2C and e-learning.
The usual MO (Mode of Operandi) is to train them on your product(s)/services and other proprietary information, which is of course the key purpose here. Online courses, webinars with on-demand viewing (a must, which means they are not attending live, but will watch at a later point – oh, and a great way to upsell for the next on-demand session, even for just an additional $5 or $10!).
And everyone does this, i.e online courses, webinars. But, what if you went one step further.
In addition to the proprietary, you also give them access to a library of free content for personal and professional development. Maybe some online courses with Microsoft 365, Microsoft Teams, Reducing Stress, plus other topics across the board. Maybe you provide them access to content curation in your system through a solution called Anders Pink (I highly recommend) or go directly to Anders Pink – which you can, and they can integrate into your learning system OR you just give your customers access to the solution (which some learning systems have already as part – for content curation, i.e. they didn’t build it, it is from Anders Pink).
In other words, you are giving an additional value and incentive for that customer to come back, and use it. You do not care if they share their user name and password with their family members or significant others to take this content.
This is about providing a plus for them as being a loyal customer, and you being a company that cares about their customers during these difficult times.
There are plenty of 3rd party content providers that exist out there, some are better than others (feel free to reach out to me for suggestions OR you can view my Top 3rd party content provider Awards. For content aggregators – the best is Open Sesame – which can add the content into your learning system, followed by GO1 and Biz Library. Open Sesame and Biz Library will work with you to pick the content you only want and need, and not an all you can eat option. Thus you get the bundle option)
If you think making 500K via e-learning with your B2B/B2C Training is a fantasy, I am here to tell you it can be reality.
I did it.
In under eight months
And during a recession.
Oh for those wondering, yes, I can provide a webinar for your company, business, organization, association, etc. For transparency purposes, the fee is $1,200 for up to an hr. If interested, please e-mail me.