For most employers, learning falls on the expense side of the balance sheet. That’s because companies often focus on developing their employees, not their customers. There are, however, organizations other than vendor companies that successfully deliver education to people outside their walls for a fee.
One such company is Motorola Solutions, which makes barcode scanners, two-way radios and wireless local area networks for business and government. Among its learning and development programs, Motorola Solutions provides a certification program not only for partners who resell its products but also for business customers and Motorola employees.
“When we provide training to customers and partners, the main focus is not on financial goals attached to selling training, but on maximizing the value customers see in our solutions by learning how to better utilize our technology, and for partners by learning how to better position our solutions and support their customers,” said Claudia Rodriguez, vice president and head of Motorola Solutions Learning.
Rodriguez, who has an electrical engineering degree, started her career in computer programming; she joined Motorola in 2000. She said her background, as well as her employers’ business, makes her keenly aware of the importance of feedback loops and technology when delivering training to a global audience of employees as well as customers.
“To sell training to an external audience, it takes a focus on value creation and value realization,” Rodriguez said. “You also have to decide how you’ll measure the ROI.”
She said one way is to work with channel partners to evaluate the impact external learning offerings have on sales.
Motorola Solutions’ approach to learning includes consultative assessments of learners’ needs, marketing and measuring learners’ ROI. Rodriguez also said the company’s LMS “is a critical component, enabling the overall learning experience.”
Another element Motorola Solutions uses to build a successful external training program is to link technology so the company can pass records between, for example, its partner program, CRM system and LMS. Linking these systems enables learners and the company to keep track of what’s being taught and to whom.
The Opportunity for Learning
“External training is a business opportunity for a company that has a technical product,” said blogger Susan Nash, who writes about the training industry at E-Learning Queen. “But if a company’s training department tries to make a business out of selling general courses, like employee on-boarding, it’s a money-loser.”
According to Nash, oilfield services company Baker Hughes offers learning to technical experts as well as clients who pay to attend workshops bundled with a product or service. Nash said a $5,000 investment for a weeklong training course on techniques tied to boring a natural gas well could potentially save a client $1 million if it prevents a drilling error.
She said there is a market for selling online technical training to businesspeople, especially in developing countries where it might be hard to send qualified instructors. She offers the “e-symposium” as an example. Nash describes the e-symposium as “a combination of a one-hour webinar and the equivalent of eight hours of asynchronous individual instruction.”
E-symposiums are also tablet and smartphone friendly. After completing an e-symposium, which can start at $75, Nash said learners can receive one continuing education unit, and these sessions are easy to archive and can be downloaded with an MP3 player.
“There has always been an assumption in the training industry about a pure, for-profit consumer model for e-learning,” said Bryan Chapman, chief learning strategist for the Chapman Alliance, a talent management research and consulting company. “Business-to-consumer e-learning is almost nonexistent because consumers aren’t often inclined to pay for generic training about topics they can find for free on the Web.”
Chapman said even U.S. government foreign language training, which would seem like a money-maker, can be taken for free online. If an organization’s internal learning department is going to successfully sell its development offerings to an external audience, Chapman said, courses have to be technical or married to a product. “The money is mostly in business-to-business e-learning,” he said.
There are some exceptions. One would be education delivered by organizations such as DeVry University or University of Phoenix. But “that content isn’t necessarily being paid for,” Chapman said. “People are paying for an online degree.”
Among the roadblocks a learning department might face while trying to sell its learning to an external audience are the administrative headaches linked to running a business within a business.
A learning department that wants to make a buck from external sales will have financial transactions to process, end user contracts to consider, certifications to track and content development deadlines for an external audience that can be unforgiving about delays.
“An internal training department has to balance the need to create and sell courses to clients versus meet internal needs,” said Karl Kapp, professor of instructional technology at Bloomsburg University. “You almost need two sets of resources to do it properly.”
In spite of the potential headaches, internal learning departments that aim to deliver to an external audience can enjoy significant payoffs.
According to research on extended enterprise learning by research company Aberdeen Group, organizations that focused exclusively on training employees saw a 5 percent increase in revenue per employee from 2009 to 2010.
Organizations with formal learning programs for both customers and business partners, on the other hand, saw nearly double the revenue increase per employee, 9 percent year over year. Aberdeen’s findings indicate one of the best ways for an organization to be successful is by educating customers about the value of new products or changes in processes or strategies.
“The most common goals organizations have for their extended enterprise learning [are] improving product knowledge, increasing satisfaction with products or services and generating revenue,” said Mollie Lombardi, senior research analyst for human capital management at the Aberdeen Group.
Other Models to Sell Learning
Some professional associations sell learning offerings effectively to an extended enterprise of learners who must comply with an array of regulations and licensing requirements. They straddle the gap between an internal learning organization selling its own courses and content providers such as SkillSoft or NIIT.
One example is BAI, which provides professional learning and development programs for banks and credit unions. This year regulators will increasingly require financial institutions to improve communication with customers about various transactions, including requirements for banks to educate consumers. BAI sees that as an opportunity.
“We’re successful in doing this because we understand the complex business issues of today’s banking environment and we have developed strong training content that is effective,” said Debbie Bianucci, BAI’s president and CEO.
Another example is CPA2Biz, the technology subsidiary of the American Institute of CPAs (AICPA). The AICPA’s 370,000 members, which includes CPAs in public practice, industry, government and academia, are licensed professionals who have to meet state regulations, and, in many cases, manage those requirements on their own.
CPA2Biz uses a learning management system to sell content sourced from AICPA and third parties to accounting and financial professionals who are required to take approximately 40 hours of continuing education annually depending on their state of licensure. But Michael Ham, CPA2Biz’s vice president of operations, said the company’s mission extends beyond continuing education.
“Our aim is to change the way financial professionals approach education,” Ham said. This may be one reason why the organization has been so effective in selling training.
The LMS helps CPAs consider their career paths, and they’re buying more education because of it. The LMS delivers the education in the context of a learning plan each time an AICPA member takes a course. According to Ham, members pay, on average, $30 per course hour taken via the LMS.
CPA2Biz averages 40,000 to 50,000 course completions per month. To make money from training, it has invested in technology. Its LMS has been customized for the accounting profession, integrates with an e-commerce application, a search tool and a Web analytics product. Users access the LMS and tap the search function to guide themselves to various publications, conferences or online courses for sale.
The e-commerce software handles the financial transaction, and the LMS delivers and tracks the content. The analytics system provides CPA2Biz with valuable information about the user experience from search through purchase.
“Research on the extended enterprise shows that 21 percent of companies with an LMS are using payment tools to manage payments from outside parties,” said Aberdeen Group’s Lombardi.
Yet, most training professionals within companies don’t see e-commerce as a high priority, said John Leh, vice president of sales and marketing for LMS maker Meridian KSI. “But when you speak to vice presidents of sales and business development inside those same companies, they’re interested in selling training because they’re part of a business line that has unique content, and they see a way to engage customers.”
It’s not clear exactly how much internal learning sales contribute to the e-learning market’s value. According to IDC, in 2011 the e-learning market was worth approximately $12.8 billion, of which close to $1.2 billion consists of courseware development and business services.
Experts assume the percentage is a small fraction of that whole, possibly growing.
Making Training Sales Profitable
As internal learning organizations and even associations look to sell learning, they may want to rip a page from the course developers’ playbook.
Chapman said these companies became profitable by moving “from making every course a custom, one-off event to instead using single sourcing to create courses; they apply publishing practices to e-learning.”
Another option is to buy the source code for content and manipulate it as needed. Yukon Learning is pioneering this model, Chapman said.
If a learning department wants to become profitable selling its content, Chapman said the secret is applying publishing practices along with unique content creation. Kapp agrees.
“The in-house training department must compete against for-profit firms that only create e-learning for reselling,” Kapp said. “So, the internal department that wants to sell training should focus on their unique knowledge and position within the industry.”
Bill Perry is managing partner for March 24 Media LLC, a marketing, communications and social media consultancy. He can be reached at editor@CLOmedia.com.