In this episode of the CELab Podcast, we’re joined by Maria Manning-Chapman, the VP, Education Services Research at TSIA where we expand upon the TSIA’s “State of Education Services 2020” report - which we covered in Episode 38 of this podcast.
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Here, we’re diving deeper into monetization strategies which our listeners and the network that we’re in as Customer Education Professionals are interested in getting more help with. Customer Education tends to “niche down” from where we end up in much larger, mature organizations where we often have true Educational Services teams.
1 - Working with Education Services
Maria works with TSIA members that span across all stages of maturity. Some are newly formed Education Services organizations, some are newish – in that 2-4 year range and then there are mature education organizations, been around for 5 or more years. From a business model perspective:
About 20% function as a cost center (there is no revenue, or not enough revenue to cover costs) Approximately 20% are breakeven (there is enough revenue to cover expenses, but nothing extra) Roughly 55% are revenue centers (revenue, margin and profit positive)The remaining percentage is mixed models
In many cases, those who are cost centers are often looking to monetize training and at least move to breakeven. Those who are breakeven are looking to move to revenue/margin/profit positive.
2 - Maturity and Monetization
Most “young” XaaS (“X” as a Service) companies start with free educational programs. Educational material emerges necessarily from Customer Success, Support, and other teams prior to having a named leader.
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If you’re thinking about education as a business, your job is to always grow the business. You have to have money to invest in your growth. Being revenue-generating allows you to fund your own growth.
Another key concept for all Customer Education professionals need to keep in mind is “the fallacy of free training”. If we give training away for free - the masses are going to flock, right? Many people believe that charging for education is a barrier.
Free training, however, is no guarantee of consumption. We know that driving consumption drives volume. Those who know how to prompt students to consume educational material net a higher average number of training days consumed annually and a higher number of online learning hours consumed annually.
So … it’s c