Getting your foot in the door of a prospective education services (ES) customer is often as simple as offering a free sample of the value you can bring to their organization. But, free offers shouldn’t just be given away without a strategy. While a free strategy is most commonly employed with new customers, free offers can be sprinkled throughout the customer lifecycle. In this post, I’m going to share some best practices to keep in mind when developing your free-to-fee strategy.
How Much of Your Offer Portfolio Should Be Free?
First, it’s important to understand that there is a big difference between free training and giving training away for free, which is covered in more detail in a previous blog post, “How Free Offers Lead to Paid Opportunities.” In short, by design, free training has no price tag and is used by ES organizations to ”land”,or get a foothold, within an account. Training that you give away for free, however, does have a price tag, but is discounted 100%. This is typically a goodwill gesture, either as a bonus item for a customer who has spent over a certain amount of money on the product, or as a way to appease a less-than-satisfied customer. The key distinction between the two is free training has a strategy behind it, while training that’s given away does not.
In 2015, roughly half of education services organizations surveyed had free offers, but in 2017, this number has jumped to 67%.
When TSIA first started conducting the Education Services Benchmark, we didn’t have any questions about free content. As free training started to become part of offer portfolios, as recently as3 years ago, we began tracking data about how many education services organizations do or do not include free offers in their portfolios. In 2015, roughly half of education services organizations surveyed had free offers, but in 2017, this number has jumped to 67%. Having established this growing trend, the focus is now shifting, both in our research and across the industry, toward making free offers work for education services organizations, by establishing a free-to-fee strategy.
But, what’s the balance between how much of your offer portfolio should be fee-based and how much should be free? Benchmark data shows that on average, 75% of learning content is fee-based and 25% is free. The most popular free offers include e-learning. We’ve also seen a huge move towards video content within the e-learning umbrella, which is relatively low-cost and easy to produce.
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Examples of free training offers and their popularity based on benchmark data.
Free-to-Fee Strategy for Education and Training Offers
As forwhere these free offers fit into the context of TSIA’s LAER model (Land, Adopt, Expand, and Renew), educational offers tend to fit best in the Land and Expand portions of the customer engagement journey.
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TSIA's LAER model and where free vs. fee offers lie along this framework.
Land: Free Samples to Entice Customers
If you want to land ES in an account, free or low-cost content is a great way to do that. It allows ES to get a foot in the door, and it provides a talking point for future conversations with the customer. Free, or low-cost content, is designed to be very basic. Its purpose is to provide customers just enough learning so they can start using the product(s). For more features, deeper information, and additional help on using proficiently, the learner/customer will need to “expand” to fee-based content, which includes more detailed content and activities to help learners successfully and effectively adopt the technology.
When it comes to moving customers from the Land to the Expand leg of their journey, it can be shown as a purchase roadmap that aligns with your training curriculum roadmap. The graph below depicts how a learner might progress from free to fee content. The progression may or may not be linear, as it may be possible to consume other free content along the journey.
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It's important to sprinkle in free offers all along the customer journey to keep them engaged. Source: “How to Incorporate Free-to-Fee in Your Education Services Strategy.”
Expand: Getting Experienced Learners to Spend More
While the customer’s journey through your curriculum might start with free or low-cost content, the point is to move the learner/customer to fee-based offers. For example, you might provide a free video/assessment/webinar to progress the learner to more detailed, fee-based content. This learner might start with a subscription to a digital learning platform. Within the platform, the learner might pursue a badge, which is free, but other fee-based content, such as an instructor-led course, that sits outside of the subscription, might be recommended to enable successfully achieving the badge, and so on.
During the customer journey, it is important to keep learners engaged. A good way to do that is to “fill the white space”—the time in between structured learning offers and content—which is where free plays an important part. The learner can participate in a chat, read, or write, a blog, attend a 30-minute “tips and tricks” webinar, etc. These activities fill the white space in your training curriculum and create a continuous opportunity for customers to learn and consume. The most important thing is to maintain a healthy balance of free and fee-based offers within the education services portfolio
3 Metrics to Measure the Success of Your Free-to-Fee Strategy
Here are three metrics you should be measuring that can help you gauge the success of your strategy around free vs. fee offers.
#1. Penetration Rate
This is the percentage of installed accounts who have taken/accessed any of your free offers. The whole point of having free offers is to get as many accounts as possible consuming content. The second step is to get as many people as possible, within each account, consuming. The more people that are receiving value from your free offers, the more likely they are to consume your fee-based offers. Start at the high level and determine the percentage of accounts that have taken advantage of a free offer vs. the percentage of accounts that have not taken advantage of a free offer.
#2. Conversion Rate
One of the purposes of free content is to move a learner to fee-based content. A good way to determine if your free-fee strategy is working effectively, is to track the conversion rate. Whereas penetration rate tracks consumption at the account level, conversion rate is at the individual level. For this metric, assess the percentage of learners who consumed free content and went on to purchase fee-based content vs. those that consumed free content, but have not purchased fee-based content.
#3. New Product Leads Generated
Some companies leverage free learning content to attract prospects. If your company does not, then this metric may not be applicable. If your company does leverage free content to generate interest in your company’s products, then ES will want to gauge if that free content generates a qualified product lead or a request for more information. This metric is generally specific to the product side of your organization, but gives a good look at how your education services organization is contributing to inbound leads overall, which is something your Sales team is always interested in. By measuring this, you can track how many leads you’ve generated for the product sales organization, as well as keep tabs on how many of those leads closed in new deals.
Being able to quantify not only the percentage of new product leads being generated by education services is a great talking point, not just for Sales, but for the company in general. It shows that the value of education is not just about the customers learning something, but also adding to your company’s bottom line.
Checklist of Free-to-Fee Strategy Best Practices
There’s a lot to consider when it comes to creating a successful free-to-fee strategy, and it’s something that members of TSIA’s Education Services membership program can get hands-on help with, but to help you get started, here’s a checklist of recommended steps:
- Provide some free content to customers
- Balance your offer portfolio with no more than 25% of content being free and at least 75% of content being fee-based
- Implement the LAER framework to leverage a free-to-fee strategy that lands education in customer accounts and expands the customer to fee-based offers
- Drive learner engagement by filling the white space. The white space is often filled with free offers, such as chat, blogs, short live webinars, videos and the like
- Measure the success of your free-to-fee strategy
For more detail about these concepts, refer to my On-Demand webinar, “How to Incorporate Free-to-Fee in Your Education Services Strategy,” which includes how these free training offers can be applied to your product strategy, so be sure to give it a listen. In the meantime, please reach out to TSIA today to learn more about how we’re helping education services organizations across the industry successfully incorporate more free offers into their offer portfolio, paving the way to better customer retention and new revenue opportunities.