In our recent webinar, Maria Manning-Chapman, Vice President Research, Education Services at TSIA, shared best practices and actionable recommendations on monetizing Customer Education programs.
Business Models for Customer Education Programs
In her presentation, Maria detailed the three business models that she sees most often for Customer Education programs:
- Revenue Center: The amount of revenue generated via the customer education program exceeds costs, and results in margin and profit.
- Break-even Center: The amount of revenue generated covers expenses, but does not generate margin or profit.
- Cost Center: Either no revenue is generated, or the revenue that is generated does not cover expenses.
As per Maria, the majority of programs fall into the Revenue Center model. As she explained, it’s much easier (and more comfortable) to have a self-funding program versus being dependent on other departments like Product Management or Customer Success for financial support.
Picking between the Fee and Free Model
While this is certainly an ideal model, Maria shared that she is often asked if customer training should be revenue generating and if giving away content for free is an effective strategy for product adoption. In her experience, Maria has found that many teams believe in giving training away for free because they feel that monetizing courses will be a barrier to product adoption. However, she explained that this train of thought is actually a fallacy. In her words, “the barrier to adoption isn’t if training is free or fee-based, the barrier is consumption.”
With that thought in mind, Maria went on to share more detail about free versus fee-based content and when each strategy is beneficial. Relatedly, given that the ultimate goal for companies is revenue generation and product adoption, Maria explained why leveraging all routes to market – including collaboration with Support Services, Product, Professional Services, and Customer Success Teams – is the strongest, most effective to promote your Customer Education program.