Three Business Models to Consider When Charging for Training

The decision of whether or not to charge for customer training is a strategic choice often made at the company level. Some companies choose to offer training for free as a way to enable success within a product for industries and customers. Other companies think of training as a standalone profit & loss (P&L) center. Still others take a hybrid approach in which training is expected to be cost-neutral (customers are charged just enough to cover direct expenses, typically classroom instructors and facilities).

Read on for more details on the following monetization models: revenue-generating customer training organizations (a-la-carte), subscription, and bundled.

1. A-la-carte training

In this model, customers pay for training on an a-la-carte, or per-class, basis. For example, a two-hour administrator training might cost $300 per attendee.

This is one of the most common pricing models, especially for organizations that are relatively new to offering customer training. Characteristics of these organizations and training courses often include:

• The product can theoretically be implemented and used without required training so training is considered an optional expense for customers.
• The training course has clear variable fees, such as a live instructor, classroom facilities, and/or proctored certification exams.
• Attendees are expected to take training only once - for example, as required continuing education credit.
• The organization has a limited number of training courses, often fewer than five.

In all of these cases, organizations can choose to take payment via invoice, via web (e-commerce), or both. Some organizations also use a "training credits" model where a purchase corresponds to a designated number of seats or units based on the classes offered.

2. Subscription training pass

In this model, customers pay for access to an entire library of training content. Usually this is for one-year in duration, either a fixed time calendar (e.g. expiring Dec 31) or a rolling window (e.g. 12 months from the date of registration).

Characteristics often include:

• A well-stocked training library where many courses are relevant to any particular student over a long period of time. Usually this is eLearning-based (also known as on-demand, or self-paced).
• Products tend to be more complex or have a logical time progression from beginner to intermediate to advanced.
• Companies commit to a continuous release of new and refreshed content in order to keep subscribers engaged month after month.
• Companies have a well-resourced training and content development team.
• Customers often pay for the core product on an annual subscription basis via a sales team.
• The subject naturally lends itself to a variety of self-paced content, such as designing different types of jewelry (bracelets, rings, necklaces, etc.) using custom CAD design software.

We typically see the training subscription business model in organizations with more mature training organizations, as well companies and products that target enterprise-level end users that expect (and can afford) comprehensive training.

3. Bundled training into onboarding, services, or support fees

A third model to consider is wrapping training fees into an onboarding package or premium support plan. For example, customers might pay a flat implementation fee that includes a mix of services, training, and other customizations. Or, customers might opt into support SLAs (service level agreements) that also provide access to certain training options.

We see this business model in organizations with a heavy professional services component, such as on-premises software or implementations that require extensive configuration and process change. In these scenarios, Customer Success Teams call for a high-touch implementation process where launch success is critical. It doesn't make sense to offer training as a separate product when it is very much tied to implementation success, in conjunction with a number of other services. This also gives organizations more flexibility in allocating costs across the entire client project.

Conclusion

Charging for training is a strategic decision that depends on your customer philosophy, product types, and the evolution of your training team. Be sure to join us for our webinar with TSIA's Maria Manning-Chapman on Wednesday, April 10th for a deeper exploration into this topic. Register now!