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Making "Pay Per View" Pay For You.

"Pay-Per-View" is a way of paying for e-learning that's becoming increasingly popular with corporate training purchase authorities. It works like this:

  • A training purchase authority twists your arm for a substantial volume discount on your e-learning offerings based upon their sizeable 150,000 employee population. In return, the customer agrees to link to your offerings on their corporate Intranet and to include your course descriptions in their 350-page "Corporate University" catalog.

  • Instead of a guaranteed annual subscription fee based on overall anticipated usage, the customer offers to pay a small royalty each time your training is "viewed." You are assured "if your e-learning is as powerful and compelling as you say it is, then our knowledge-starved employees will flock to your site and you will realize millions of dollars in royalties every month."

  • You agree to a 80% per use discount, anticipating that 30,000 employees will participate in at least one course every quarter. To be on the safe side, you double your server capacity. To show your gratitude, you throw in $30,000 worth of course customization and training management software.

  • Three months into the agreement, you find that a total of nine employees have visited your e-learning site to enroll in a course at $14 "per view." You call your investment banker to cancel your IPO, and begin updating your resume.

Don't blow your top when training purchase authorities dangle a Pay-Per-View scheme in front of you. Chances are they're just trying to get even for paying you (or one of your e-learning rivals) a huge annual subscription fee last year for training their people never participated in. Instead, try and arrive at a win/win agreement everybody can live with. Here's how.

A. Insist On A Training Marketing Plan

In spite of all the hoopla about self-directed learning, many employees will never lift a finger to find out what corporate resources are available to support their knowledge development needs.

Which is why you need to encourage your customer to develop an aggressive education marketing and promotion plan that includes frequent contact with individual learners and the leaders who are responsible for them. By aggressive we're talking about e-mail messaging, interoffice mail distribution and bulletin board signage. These forms of "push promotion" are much more effective than passive links on the education page of the corporate Intranet or dry course descriptions in a 350-page catalog that never gets out of the employee resource center.

See if there's a way that you can influence the content of your customer's internal promotion efforts. Training officials are notoriously poor promoters of their own wares. Perhaps you can develop some compelling promotion templates that customers can easily customize to their own situation. Also see if you can build in a regular review of internal training marketing and promotion efforts, preferably including vendor participation.

Insist on an education marketing plan even if your customer is paying up front in anticipation of avid employee participation. Remember, if your customer pays through the nose for training that isn't used this year, you'll pay the price next year.

B. Be Sure A Pool Of Training Funds Has Been Pre-Approved

While you may be agreeable to serving up your e-learning in a Pay-Per-View way, there's no way you want to be stuck with a "Bill-Per-View" relationship with individual learners.

So don't cut any Pay-Per-View deals with training purchase authorities unless they also have bona fide budget responsibility supported by pre-approved funding for anticipated training activity. That way you can roll up all monthly trainee activity into one invoice and get that invoice approved and paid in one simple operation.

Also be sure your customer advertises the fact that your e-learning has been pre-approved and budgeted-for to their learner community. Individuals are a lot more likely to sign up for a learning activity if they know they don't have to go through an elaborate approval process.

C. Encourage Customers To Make Your Training A Requirement

Even if a customer promotes your e-learning offerings aggressively to employees and emphasizes that course tuition is "free", chances are that the participation rate on an elective basis will be less than 10%. So see what you can do to get your offerings incorporated as part of your customer's employee development requirements.

Are you selling supervisory skills courses? How about a requirement that employees being considered for supervisory roles must successfully complete 6 e-learning course hours in addition to the traditional classroom supervisory training regimen.

Are you an IT e-learning provider. How about getting your customer to require certification -- either one of the industry standard certification paths, or a proprietary certification that supports your customer's unique application environment.

Don't just mandate training to individual learners. Also see about getting managers and supervisors held accountable for the ongoing skill development activities of their team.

If your customer is willing to mandate your courses, you may want to go the extra mile in making sure your courses are customized to their unique business needs. While you're at it, why not throw in some consulting and software development support to help them assess learner competencies and manage service delivery.

D. Don't Discount Without Performance Guarantees

Since a Pay-Per-View method of purchase puts you at risk regarding how much of your e-learning will really be used, don't take on any additional risk by guaranteeing your customer a substantial volume discount in advance.

And don't sweeten what may turn out to be a very bad deal for you by throwing in expensive up-front customization services and training
management consulting for free.

Try offering your customer a nominal discount up front as evidence of good faith. Then offer to award greater discounts once reasonable purchase thresholds have been achieved. This gives you and your customer a joint interest in growing e-learning volume. Alternatively, insist on a certain minimum threshold of e-earning purchases every month as evidence of good faith.

Also, in the absence of any performance guarantees, insist that your customer at least cover your costs associated with customization and consulting services you are providing on their behalf. Or, charge full price, offering to rebate a certain percent once specified performance thresholds have been achieved.

In conclusion, in constructing annual e-learning purchase agreements, try and arrive at a solution where you and your client are equally incented to see that expected training volumes actually occur. Otherwise, you are likely to be looking at a contentious end of term scenario that will make an ongoing relationship most unlikely.

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