The decision of whether to charge for customer training is a strategic choice with multiple paths your company can choose to take. Some companies choose to offer training for free, as a way to enable industries and customers for success with their product(s). Other companies think of training as a standalone profit & loss center driving revenue for the organization. Still others take a hybrid approach, where training is expected to be cost neutral: customers are charged just enough to cover direct expenses, typically classroom instructors and facilities.
At Skilljar, about one-third of our customers choose to charge their customers for training. In this blog post, we walk through the 3 most common business training models for revenue-generating customer models of training:
- À la carte
- Subscription
- Bundled
If you’re interested in more information on customer training models, download our ebook How to Measure the ROI of Customer Training.
1. À La Carte Training
In this model, customers pay for training on a per-class basis. For example, a two-hour administrator training class might cost $300 per attendee.
This is the most common pricing model, particularly for organizations that are relatively new to offering customer training. Characteristics of organizations that use à la carte training courses include:
- The product can theoretically be implemented and used without requiring training — thus, 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 5.
In all of these cases, organizations can choose to take payment via invoice, via web (e-commerce), or both. While invoicing can require manual work on behalf of your team, payments via the web are always seamless and fast. 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. While training credits can make purchasing easier for your customers, it will require setting up a system of management on your team’s end to apply and track credits.
2. Subscription Training Pass
In this model, customers pay for access to an entire library of corporate training content. Usually this is for 1 year, either ending on a fixed date (e.g. expiring Dec 31) or using 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 training or self-paced training).
- Products tend to be more complex, or have a logical time progression from beginner to intermediate to advanced levels.
- 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 using custom CAD software.
We typically see the training for companies’ business model in organizations with more mature training organizations. We also see this among companies that need a corporate training model to target enterprise-level end users expecting comprehensive training.
3. Bundled Training
The final business training model we’ll discuss wraps training fees into an onboarding model or premium support plan. For example, customers might pay a flat implementation fee that includes a mix or 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 training model in organizations with a heavy professional services component, such as on-premise software or implementations requiring extensive configuration. In these scenarios, customer success calls for a high-touch implementation where launch success is critical. It doesn’t make good business sense to offer training as a separate product when that training is critical to a successful implementation.
Bundled training also gives organizations more flexibility in allocating costs across the entire client project. The organization can shift resources towards the training components that will best serve the specific client, rather than providing one-size-fits-all training for a set price.
Conclusion
Charging for training is a strategic decision that depends on your customer philosophy, product types, and evolution of your training team. This analysis will point you to the appropriate business model, whether that’s an à la carte, subscription, or bundled model.
Editor’s Note: This article was originally published in 2017, and has been updated in 2021.
