Learning Subscriptions: The Future of Customer Education

December 11, 2020

Michael Harnum

Category: Customer Success as a Service, Education Sales, Education Services, Learning Administration, Learning Management, Managed Training Services

I recently hosted an industry session for training and education professionals working inside the technology sector at the virtual TSIA Interact. The attendees have responsibility for understanding, creating and delivery on the education needs of their thousands of end customers. Both big and small companies were represented.

During the session I asked a poll question that produced surprising results: 80% of the respondents indicated they expect between 0-25% of their 2021 sales bookings to come from learning subscriptions. The balance (the majority) of sales will come from on demand or instructor led training sessions with their own specific price tags, sold a la carte per individual course.

This reality, that education departments, even within large enterprise technology companies, have not yet caught up with the move from transactional selling to a subscription-based model the way their larger organizations likely have, creates several problems and opportunities for these companies. First, let’s spotlight the problems.

1. The pitfalls of transactional selling

Most selling is still transactional in nature within the technology education industry. A call or email followed by an offer and even a closed sale does little to create a lasting relationship with your customer. They have plenty of people selling things to them – how are you differentiating your company and product?

2. The subscription economy is eating the world

As both individuals and companies become more and more comfortable purchasing services in a subscription model, they come to expect it everywhere. Most education teams are not meeting those expectations today, and many do not have plans to meet that need in the imminent future. You are immediately vulnerable to competitors by not including learning subscriptions in your catalog to meet this basic market need.

3. The inability to plan

Transactional selling creates unpredictable revenue recognition with major peaks and valleys, leading to strategic and tactical planning difficulty for most education leaders. A transactional selling model is simply hard to plan for and challenging to forecast accurately. Learning subscriptions create a longer-term revenue annuity preceded by sales bookings numbers (and renewals) that can form a stronger foundation for planning ahead.

On the flip side, opportunities abound in this increasingly important marketplace, as technology education departments begin to follow the larger tech industry’s lead and swallow the proverbial fish:

1. Start somewhere

Perhaps you construct a learning subscription with a half dozen of your most heavily consumed classes and target your SMB customer segment through a series of marketing emails. Or maybe you take that same group of popular courses and task one member of your team with creating a sales campaign to promote it. Regardless of the details of your first step, take the step. Then grow and adjust from there.

2. Learn

Ironically, as training professionals we sometimes forget to learn. This is a terrific opportunity to learn more about your customers, their needs, and how you can best meet them. Don’t miss it. Try collaborating with your CSMs or setting up a survey to gather customer feedback.

3. Commit to content creation

Remember that a customer of a learning subscription will expect – in exchange for their continued payment – the library of content available to them to consistently expand in a way that is meaningful to them. Every time I have sworn off Netflix and plan to cancel, they launch a new wave of “must see” content that keeps me as a customer. Don’t be caught off guard here.

4. Post-sale engagement matters

Call your customers. Sounds simple, but you’d be surprised how many aren’t doing it. Build training plans and learning paths alongside them that leverage the elements of their subscription. Make your subscription consumption data (aka: how many and which of the courses included in their learning subscription has your customer taken?) available and take the appropriate action based on that data. Make sure you have the resources you need to perform these functions. Maybe that means hiring new team members to focus on training consumption, or shifting existing employees from another function. Either way, you are now in the Customer Success business. Embrace it – don’t avoid it.

5. Your success will ultimately be determined by your (blank) rate

What would you put in the blank? The correct answer is renewal rate; the rate at which your learning subscribers renew year after year will determine your long-term success. Your education department’s level of maturity and how well you do in 1-4 above will ultimately drive your renewal rate and thus, your success.

I recognize that this is a completely new way of thinking for many who have been in the customer training and education field. It’s not easy, but it is the future of your business and can be very rewarding for you, your team, your company, and most importantly, your customers.