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The goal of education and customer training organizations is to deliver training that is easily consumed and readily accessible to customers. The right customer training offers can provide a solid revenue stream for training organizations, but there are a number of different approaches that can be considered.
The most common forms of customer-facing training are e-learning and instructor-led training, which consists of three options:
In this blog, I’ll discuss the three types of instructor-led training and provide insight regarding the percentage of education services revenue garnered from each offer type. We’ll also take a look at e-learning and how it can be packaged with some instructor-led elements to create a robust subscription offer.
Public classroom training is training that is delivered in a physical classroom and is publicly available to customers. Class schedules, with locations, are posted to a website and individuals register to attend on the desired date in the preferred location.
While the tendency is to think that classroom training is in decline, a recent TSIA Education Services Quick Poll shows that this is not true. In fact, 50% of survey participants said that they have delivered more classes in 2019, when compared to 2018, as shown in the diagram below.
Likewise, the classroom fill-rate between the two years is the same, at 60%. Public classroom training is still a very viable revenue stream for education organizations, with 25% of overall customer training revenue being attributable to it.
Virtual instructor-led training (VILT) is training that is delivered remotely using web-conferencing and lab work infrastructure tools. While virtual instructor-led training may be thought of as e-learning because it is delivered by electronic means, it is classified as instructor-led training because it is a synchronous versus asynchronous event that utilizes a “live” instructor.
Like public classroom training, VILT class dates are published to a website and individuals, anywhere in the world, register to attend. Because the training is conducted remotely, there is no need to include location information.
Surprisingly, the revenue growth from VILT has not fluctuated much over the 10 years that TSIA has conducted the Education Services Benchmark Survey. In 2010, when the benchmark was first conducted, 11% of ES revenue was derived from VILT, today, the percentage is 15%. There is a nuance to that however, and that is that VILT is often included in a learning subscription. I’ll talk a bit more about that later, in the e-learning section.
On-site training is training that is delivered to a single company at the company’s site, or a site of the company’s choosing (e.g. a hotel, etc.). Typically between 12-15 students from the same company participate in the training. On-site training continues to be quite popular, accounting for 35% of overall education services revenue. This training option should not be overlooked. Customers like it because of the convenience and education organizations like it because it is quite profitable.
Another advantage with on-site training is that the customer can ask for adjustments to the content so that it aligns better with their implementation of the product. On-site training is a great offer to package with a professional services (PS) engagement. When the PS implementation is about 30 days shy of completion, the education services instructor conducts the on-site training. The advantage of this is that it shortens the time between completion of the PS engagement and the delivery of training.
In a study conducted in 2016, Gauging Value: Answering the Training/Adoption Question, one of the most common reasons cited by students for not using a new product was the length of time between when the training was taken and when the product implementation project was completed. In many cases, students said that the training was conducted six, eight, and even ten months prior to the completion of the product implementation, which resulted in them saying that by the time the product was launched, they couldn’t remember anything they had learned.
E-learning, also called online, digital, or on-demand training, is training that is delivered by electronic means. E-Learning may consist of a snippet of content, a module, a chapter, a course, or a program, that is completed entirely online. Most e-learning includes a remote lab environment that allows students to complete hands-on exercises/activities.
Social elements, such as chats, forums, blogs and badging are also becoming e-learning staples, as are quizzes and assessments. The beauty of e-learning is that learners can consume content in snippets, a la a performance support model (training in the moment of need), or they can take a more methodical approach, following a learning path, to complete a full course and perhaps earn a certification along the way.
The percentage of revenue from subscription offers continues to increase, as shown in the graph below. I mentioned earlier that there was a nuance to revenue earned from virtual instructor-led training. The 15% cited previously was specific to selling VILT as a standalone purchase. One of the common elements of a learning subscription is VILT. So, some of the revenue that would have been earned by VILT in the past, when there was no learning subscription, is now captured in the 28% of education revenue that is attributable to subscription offers.
Another route to market for a learning subscription is to include it in a premium support contract, as a way to enable customers to self-serve on common “how to” inquiries. “How to” questions make up over 21% of all support calls. The more questions a user can answer themselves by searching an e-learning library, the more that a support representative’s time is freed up to handle the really difficult questions received by the support organization.
Customer training organizations have been selling e-Learning for years. Over the past few years however, a learning subscription offer, also known as Learning-as-a-Service (LaaS), has become the preferred way of selling e-Learning. The most common items included in a customer training subscription offer are:
Typically, public classroom training and onsite training sit outside of the subscription offer because they are delivered face-to-face and are more labor intensive. As subscription offers continue to evolve, we may see public classroom and onsite training included in the future.
For ideas of how to create your own successful customer training subscription offer, be sure to watch my on-demand webinar, “Education Subscription Offers: Knock-Knock Who’s There?” where I talk about what you should include.
In addition, membership in TSIA’s Education Services research and advisory practice can give you all of the data-backed business frameworks and proven action plans you need to get started on the right foot with creating, successfully monetizing, and scaling your customer education subscription business.
Contact us today to set up a call to discuss your current business challenges you’re facing and come up with a solution to help you get to where you want to be. I look forward to hearing from you!
November 22, 2019
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The Technology & Services Industry Association (TSIA) is dedicated to helping technology and services organizations large and small grow and advance in the technology industry. Find out how you can achieve success, too. Call us at 800-876-6511 or we can call you.