Transitioning Training from Cost Center to Profit Center

Transitioning Training from Cost Center to Profit Center

December 29, 2016
Training Strategy

With the rise in SaaS companies and recurring revenue models, businesses are evolving the ways in which they interact with customers. Software sales are no longer one-and-done deals as companies are tasked with continued customer success and renewals. As software companies throw more resources into training, there’s increasing pressure to recuperate costs, and change training from a cost center into a profit center.

In an effort to learn more about how to accomplish this, we sat down with Jesse Finn, an industry veteran who has led training and education at Silicon Valley staples like Marketo and Taleo. Jesse had a lot of great advice to share with us, so we’ve broken it up into a few different articles. We’ll start by going over some of the first steps around charging for training - who needs to be involved and what should you do first in order to lay the groundwork for success?

First steps - Gather Stakeholders and Expectations

Jesse emphasized working together with executives as you get started with monetizing your program, particularly finance. The finance team has strong influence on the company and its leadership, and being on the same page with them will allow them to provide you with the right benchmarks for success along the way, and maintain alignment with the SaaS subscription model.  

In Jesse’s experience, the first thing you need to do when you want to start selling training is to determine where the company wants to go with the offer and how long they want it to take. To do this, meet with the executive team and senior stakeholders, including your finance team. You need to make sure that the program you’re developing is well aligned with the company’s vision and plans, so it’s important to get a clear and concise statement from the CEO or the most senior leader you have access to that cares about training and education. This should cover what you want to accomplish and when you need to do it by, and confirm that you have their support for the initiative.

Setting expectations around time frame is important here too. If your finance team is expecting a certain amount of profit, you need to be aligned on the time frame and budget considerations associated with that profit. You shouldn’t expect to turn a profit right away, and that expectation is an important one to set with finance. Once you’ve done that, the pace at which you build your training program will vary, and you can set deadlines appropriately. Many teams will start quickly and worry about continuously improving over time.

Align with Sales

After finance and senior leadership is on board, it’s time to dig into the details with your sales leadership. Jesse has encountered sales leaders that are huge proponents of selling training, and others that prefer that training is included without an additional charge. Meeting with a VP of Sales will help you understand what you can expect from his/her team in terms of selling training. To properly plan, you’ll need to get a handle on what sales resources are available to you and how quickly they can mobilize to sell.

Stay tuned for more valuable tips we gathered from our conversation with Jesse, including information on pricing and packaging your training program, and building a winning training team.


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