Barry Kelly, co-founder and CEO of Thought Industries, and John Leh, co-founder and CEO of Talented Learning sat down for an in-depth webinar to discuss their 5 successful strategies that create an infrastructure for a profitable professional training business.
This article captures their expertise and insights, specifically for you.
Barry Kelly: These 5 strategies can be the foundation of your success – building and supporting a profitable and growing training business. Together they’ll help you solve problems such as planning for scale, what content do you need and how do you leverage your core assets. How are you creating and delivering the learning experience to your clients and partners?
Whether you're selling direct to individuals or organizations, licensing or delivering learning, these are the most important components of your strategy:
Strategy #1 - Business Model: Identifying Opportunity
John Leh: I talk to people that are trying to sell content every day. They can be corporations, for-profit training companies, associations, academic institutions, or nonprofits. They are all looking for technology that enables selling content or selling expertise.
My advice is to slow down and do this business modeling first. If you build it, it doesn't mean they're going to come. What content you choose to develop is critical. The decision must be built on the competitive landscape and the market opportunity.
Not thinking about those things is a surefire way to not sell enough content.
Barry Kelly: Two things to think about:
Strategy 2 - Learning Product Distribution: Scale Training Delivery
Barry Kelly: I want to talk a little bit about how you take your learning product and learning experiences and how those are distributed. What do you need in terms of technology or what do you need in terms of systems to be able to be successful?
Think about your learning destination. In many cases the learning destination is a desk. Then your distribution strategy hinges on your ability to create the storefront, the ability to merchandise your content – to have fully integrated commerce.
You become a one-stop shop. Everything stems from that one destination learning site.
Multi-tenancy is important because you want to be able to sell not only to one organization but hundreds or thousands. It’s about creating custom landing pages and front doors for each of these entities. Their users have access to the white-labeled course, and the managers and the individuals that are responsible for their learning needs can come in and monitor progress. The system allows you to seamlessly distribute and manage your licenses.
John Leh: A lot of companies think that domains are the same as managing client portals but they're not. Domains are about separating users inside a learning management system. But what it's missing is the whole focus on making money by licensing content - managing the licensing and managing the delegated administration of those users.
You need a platform that's tailored to licensing and has a licensing management model. This is domains on steroids.
Barry Kelly: Some of your clients are going to ask you to create a full custom portal for them. We want it fully branded and we don't want anybody else in there. It's a fully dedicated stand-alone domain.
The client can even go in, create courses and author and manage their own content. They can merchandise content out to their extended enterprise. This is a powerful offering.
John Leh: One use case would be: I sell my library of content to a consulting company. That consulting company creates their own portal and all their customers have their own area so that they can resell the library. So, resellers of your content all have this distributive portal methodology.
Barry Kelly: These micro sites and licensed-branded classrooms originate from your technology and can be distributed easily and managed. It's quite clean because all the content, reporting and all the data are all in one place. There's going to be clients and individuals, organizations that want your content, but want your content on their learning management system (LMS).
When you make changes to content, they are digitally propagated out across your network of clients. So, you don't have to say, “hey I'm going to send you a new SCORM file, we've made an update to page 4.” Delivered content is on their LMS but remains tethered to you – you retain complete accountability.
In addition, interoperability should be non-negotiable. All systems and applications must be able to interact and exchange data. All the digital content, tools and resources should be as easy as drag and drop.
Barry Kelly: As I mentioned, at Thought Industries we focus on creating an effective, immersive and differentiating learning experience. An important conversation to have is about content creation. Content is the heart of the learning experience.
What expertise do you have, what content do you need and how are you maximizing the return from your intellectual property?
John Leh: With content creation, it's not just about the revenue coming in from the sale of content. It's the expenses going out. Content creation can be in-house versus using third parties or contractors. It impacts the profitability of your business.
Training companies need to figure out how to create the highest quality content in the most efficient way. If it takes you $50,000 to develop your library, and that has the same perceived quality or ability to generate revenue, as if you invested only $30,000, you must sell a lot more content to make up for that delta.
Plus, think about the actual instructional design - how are you going to change the behavior of the people that are consuming your content to the desired behavior? How are you going to automate this process? How can you develop once and deploy many times, so you're not reinventing the wheel on each new piece of content that you're delivering in multiple ways?
John Leh: The technology you choose are levers for success. Unless you are comfortable with the most rudimentary approach, and rudimentary results, you will need a learning management system (LMS) to sell, deliver and track everything.
There are over 700 different LMS platforms out in the global learning technology industry today, and many dozens of different approaches from these systems. There are only a few LMSs for training businesses.
Are you targeting K-12? Are you targeting higher education? Are you targeting eCommerce? Are you targeting a stacked monetization policy or just a simple eCommerce type solution?
Choosing the right technology is all about starting at the beginning and defining your use case, as we said earlier. Now, what kind of technology do you need to make this happen?
Should you build or buy an LMS? Some organizations started out by building their own learning management system because they couldn’t find what they wanted. They created their own website tied to their own ERP system tied to their own catalogs, databases, eCommerce systems.
This sounds great, except it’s tough work to create a learning platform. It costs a lot of money to keep it up to date. That's not your core business.
Now, their eyes are open. They can see that these next-generation LMS platforms do exactly what they want, and provide the support that’s required, and do it all better than their homegrown technology.
It’s a difficult position, but there's no sense in settling anymore. You can find somebody who's doing exactly what you're trying to do from a business standpoint if you just roll up your sleeves and do a little bit of work.
Barry Kelly: Individuals are exposed to so much advanced, well-designed technology today, they’re looking for an elevated learning experience. Their expectations of online learning have increased significantly.
There are experiences and outcomes. What type of experience are you providing to that individual learner? How are you ensuring the desired outcome, so they meet their goals and come back for more?
John Leh: Executives with professional learning companies are not always aware of what technology is out there. They must get educated on the technology, including SCORM and xAPI. It’s not an easy thing because there's so much information and a lot of it is hard to follow because it assumes that you're coming from an IT background or an instructional background.
Barry Kelly: If you're selling courses online, it's important that you're not even down for a minute. Anything you create in the system needs to be immediately available on all devices and all sizes.
Barry Kelly: We call this the stack monetization model – the revenue pillar of your business. We start with positioning and ways to optimize growth through the delivery and licensing of your content.
You want to establish yourself, then build new revenue streams, new distribution systems. How do you manage and scale all that and grow? The goal is a highly profitable, high margin learning business.
John Leh: Pricing is key. Here are some of the considerations:
You can use these different strategies in combination, and in special promotions to drive sales. Having all your eggs in one sales basket is not a wise way to maximize your content business.
Barry Kelly: When we talk about monetization, we’re talking about the ability to grow and scale. We focus quite a lot on licensing as a tremendous way to leverage expertise and content.
It’s not just the challenge of creating the content, selling the content, distributing the content, it's the challenge of being able to scale – to effectively manage the content, to license courses and the distribution of content to individual cohorts, to clients and partners.
[Don't miss our December 17, 2019 customer webinar, "Secrets to Online Learning at Scale: How VitalSmarts Used a Modern LMS to Drive 200% Revenue Growth"]
Custom-branded learning is very important today. Organizations want a fully branded learning experience. You might also give the organizations who want custom branding the ability to edit some of the learning content.
John Leh: Then there's a premium service where it’s your branded portal with your employees and your salespeople and your virtual classroom.
Barry Kelly: Another aspect of licensing is customized learning portals. The virtual classroom taken to a new level. A fully dedicated URL for your client.
Which brings me to a related issue – technology. You must have the technology that supports your strategies.
John Leh: Agreed. You must have the technology to support those different streams of monetization simultaneously or concurrently, to get the most value, and to hedge against risk.
Barry Kelly: I’d like to add one last thought. We think the road to success, in addition to these 5 strategies, is to find an LMS vendor that is willing to work in partnership with you, to understand the complexity of your business, how you're looking to grow, how you need to scale.
It’s not just what the technology can do, but the support they give in the long term.
Watch the full webinar: Paving the Way to a Profitable Learning Business