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Fee + Free: Understanding Customer Learning Monetization Strategies

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Thought Industries
August 22, 2021
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If you’re looking to understand more about how today’s organizations are monetizing their customer education programs, and get some tips and tricks on becoming more revenue, margin and profit positive – you’re in the right place! Our recent webinar was a conversation around all things monetization. We were joined by TSIA’s VP of Education Services Research, Maria Manning Chapman, and General Manager at Service Rocket, Bill Cushard. Let’s dive in!

Shouldn’t product training content always be free?

Do you ever feel innately uncomfortable with charging for training content? If so, you’re not alone. This feeling usually centers around the idea that, as training content drives product adoption, customer education leaders shouldn’t be putting a barrier (AKA a price tag) in the way of their customers taking the training. You might even think, “Surely I’ll get more people to sign up if I don’t charge, which will then have a positive impact on product adoption.”

Maria calls these thoughts the “fallacy of free,” because what actually drives product adoption is whether training is consumed, not whether it’s free. You have to drive consumption in order to drive adoption. Since paying for content makes you more invested in making the most out of the training, paid-for content is actually more likely to be consumed.

Maria highlighted that, as a result, the pivotal point in your ability to drive product adoption isn’t whether it’s free or fee-based training, it’s whether you have a strong, documented consumption strategy. In other words, it’s not about the price tag.

Does monetizing mean all of my content should be fee-based?

Understanding that the cost doesn’t turn your customers off from consuming training doesn’t mean all of your content should therefore be paid for. In fact, there is a growing trend to provide some of your training content free of charge, with 60% of organizations offering some free content in 2016, compared to more than 90% today. Interestingly, for those who offer a mix of strategies, the proportion of free to fee based content in this same time period hasn’t changed that much at all, staying constant at around 75% fee-based to 25% free.

So the real question is, which content should you be charging for?

Bill commented that it’s less about the topic itself, and more about the value that you’re offering. You can have a single training topic, and offer it as a free self-paced course or on-demand, at one price packaged as a VILT course, and then at a third, much higher, price option if the customer wants white-glove or customized on-site delivery.

It’s also important to think about your training from the perspective of your customers. What kind of training are your customers looking for? This can heavily inform how you decide to price training content.

People who fall into different customer segments will often have unique ideas about what they want. For example, an innovator or early adopter of a product usually doesn’t want too much hand-holding, so they’re more likely to ask to be given the manual and to work things out for themselves. Later adopters or laggards in the market may expect you to show up and walk them through the process step by step, which would be a more premium offering. In this kind of scenario, Maria commented that you can offer something which is of low cost to you but high value to the customer, such as office hours where your instructors are available to answer questions on the fly.

Just as you would customize a product offering or a support interaction by the customer’s needs – look for ways to offer highly customized training by segment or specific customer.

When should I start monetizing content?

Many customer education teams make the mistake of waiting for the “right time” to monetize, but the truth is that there is no magic point where it’s time to turn from being a cost center to a profit center. You want to be in control of your own growth. Monetization helps you to grow your infrastructure and scale, in which case it’s important to start looking for revenues from day one.

It’s also important for your customers to see that your training has value, and that you believe that too. You’re going to help your customers get better at their jobs using your product. The certification you’re offering might get the user a raise, or a new job. Your training is going to help a whole team get ROI from an expensive annual software subscription. That’s worth some money!

Finally, when you start out from day one charging for some content and offering other content for free, you’re offering transparency. In contrast, if your training starts out as free and then switches at some undefined point to being fee-based, your customers may feel that they have been tricked with some kind of “bait-and-switch” approach.

Remember, this doesn’t mean that all your content should be fee or free – just that you should make a decision about each type of training and start as you mean to go on.

Which pricing and funding strategies can I choose between?

When you’re considering how to package your training content, there are four main categories that your fee-based or free content can fall into.

Discrete fee: This is the most straightforward approach. Your customers are charged a simple, transactional fee in return for a single item of training. You may want to combine this with upsell opportunities to a larger bundle such as offering a subscription or an additional course.

Bundled fee: In this situation, your offering may include a learning subscription, training credits, on-site training or additional instructor-led courses. TSIA recommends this approach for driving greater product adoption and showing that you care about customer success. It’s usually not just education in a bundle, you’re offering time from a CSM, and some type of support or professional services alongside the training.

False free: This is where the product price covers the cost of additional services such as training. The customer makes the purchase and feels that the training is an “add-on” that they get for free. In reality, the product cost has been lifted to include the cost of training, and at the back-end, the revenues are apportioned across the different teams.

Free free: In this case, the training really is given away, and your customer education is a cost-center. Ask yourself what you’re gaining from providing this content for free, and make sure it aligns with your overall organizational strategy.

Can’t get enough of this conversation? Check out our webinar on monetization strategies, which covers so much more! Don’t miss:

  • The different business models for training content, from cost-center or break/even, to revenue-center.
  • How to define monetization in terms of cash, profit and value.
  • Determining the price of training, from various trial and test strategies, to offering different pricing for different customers.
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