Corporate Training Vendors Must Re-tool to Survive

If your corporate training activities rely on the traditional face-to-face interaction in a classroom, you may go out of business completely as the novel coronavirus continues its spread.

Along with the news of companies big and small canceling key conferences and meetings throughout the world, what is left out is the mass cancellations of training workshops of all sorts. If you were a training vendor at Apple, your scheduled workshop at Apple HQ in Cupertino was cancelled until further notice. If you trained Facebook employees – canceled. Google? – Cancelled. Salesforce? – That business is gone for now. The grim reality is that ALL face-to-face training has been cancelled.

The antiquated world of traditional training vendors is crumbling, and there is no going back to business as usual. First, responsible corporations are limiting most business-related trips to ensure the safety of their employees, and this limitation is likely to stay for long. Second, training vendors themselves also need to ground their personnel for the same reasons. So on the one hand, the vendors’ customers are afraid and don’t want to meet in one room with them, and on the other hand, their employees don’t want to travel and are afraid to meet the customers. The circle of doom is complete.

The future of the corporate training industry belongs to technology-enabled training vendor

  1. The ongoing battle with the novel coronavirus reveals the vulnerability of many business models and training approaches. The impact of the virus is already shaping up to influence the corporate training industry in at least three profound ways:
    a major market shakeout in favor of the more technologically advanced training vendors
  2. Scalable online training delivery becoming the default standard of corporate training
  3. Further growth of Learning Experience Platform (LXP) market as companies start to understand the value of internal expertise vs. third-party vendors

Let’s look at these in more detail.

Traditional training vendors are officially obsolete
If the current situation is not a wakeup call, what is? Traditions are good until they are not. The traditional “conference-room-and-pencil” training vendors are going to suffer the most in 2020 and beyond.

Those who have for so many years denied or postponed the obvious need to introduce technology-enabled distance training programs, will lose a lot of business. Many will go out of business altogether if they do not re-tool quickly.

These vendors need to act promptly to roll out three types of training program:

A. Instructor-led live online training

This is the first and logical step in the tech-enabled transformation. First of all, this approach is just as high-touch as the good old face-to-face training. Second of all, the approach is similar in scale and logistics: small groups of trainees need to cancel work, and gather at a predefined time to get the training.

While this approach is the cheapest to implement, it is also arguably the most valuable in this situation because instructors are able to implement it with relative ease. The biggest value comes from data: the vendors are quickly able to analyze what works best for them and their customers with online training delivery mode. This knowledge helps roll-out progressively better programs.

It’s still a face-to-face training program, but since there are no limits of the classroom’s physical space anymore, it can now be scaled to larger audiences.

B. Instructor-led blended online training

One of our company’s secret insights that can be shared here is related to this: our data clearly shows that **the holy grail of effective, scalable corporate training at this time is the instructor-led blended training program**. In the next decade, that’s where things are going. The “blend” will change in quality as more and more technological assistance will be thrown in the mix. However, our data shows that the key to success and effectiveness is the instructor. The human thought and personal touch and is then enhanced with technology, off-line activities, data, etc – to produce a super effective and scalable training programs that truly work.

A subset of this type of training is the Bootcamp: fast, intensive, laser-focused training that provides a big boost and a quick shot of essential new skills. Bootcamps work exceptionally well for groups up to about 50 trainees.

C. Self-paced training

Due to increasing affordability of high-quality video recording, the cost of producing a self-paced course has been going down. However, the time required to build a course—those with experience would agree that “build” is the better verb describign the process of course production—remains steady: depending on complexity, it takes at least a couple of weeks for a relatively simple scenario. Nevermind the technology: what matters most is course design and user testing.

There are quite a few popular coaches out there that re-package Steve Blank’s advice about product discovery and customer development as the best way to design a self-paced course. The very bad news is that the customer development process is too complex, too messy, and it is not for everyone. In our view at RKK LXP is that this process does not work for course development at all, and these consultants should be honest with their audiences about the limitations of the process that they repackage as the ultimate solution.

The good news is that rolling out a high-quality self-paced training program is much easier than finding a product-market fit for a business.

That said, some companies are still stuck in the ancient past with their e-learning modules for the antiquated world of LMS that’s shrinking fast in front of our eyes.

Our advice to the training industry is to stay away from the Learning Management System world altogether – it is a an expensive sinking ship. Companies who still use an LMS should think of cutting costs by shutting it down and implementing a better, more flexible solution: the Learning Experience Platform (LXP) like the one we offer on RUKUKU.com for a tiny fraction of the cost of an LMS.

In order to survive, these vendors will have to change their business model. They will need to transition to technology-enabled distance training delivery. The good news is that it is the future of corporate training anyway, and now is the good time to invest resources to implement this transition to stay relevant. The bad news is that, any delay will be fatal to many training vendors.

Traditions are good, and conservative approaches work well until they don’t work at all: not only the face-to-face training approach may be putting people’s lives at risk, the sheer life of many traditional training businesses may be facing an immininent end!

Future Corporate Training is scalable and online

Forget about cookies and coffee in a sleepy training office. It is naive to expect a change in policy after Covid-19 from most L&D managers. The virus may subside and go away, but the company regulations will stay unchanged for a long time. It is reasonable to think that corporations will generally do two things:

a) Businesses will move most corporate training in-house. This means that Learning Experience Platforms will grow in popularity as corporations will seek to tap into their internal expertise to deliver training. LXPs enable easy knowledge sharing among employees – now suddenly EVERYONE in a company or firm has the tools to deliver training to colleagues. RUKUKU.com is one example of such toolset.

b) Companies will require that all external training programming be delivered at scale and online. This means that outside training vendors must find a way to integrate into the client’s infrastructure or lose business.

We expect a burst in popularity of instructor-led corporate bootcamps.

To stay relevant, training vendors will have to be present on different platforms or use a tool like RUKUKU.com that allows an easy, inexpensive and secure integration with their customers’ IT infrastructure.

Agile training content development model will dominate

With all of the above, it is inevitable that corporations will spend more time and effort on obtaining and developing high-quality training programs that suit their goals best. Training vendors will have to innovate and iterate quickly to customize their offerings for different clients.

This means that vendors need to figure out how to do high-quality content development cheaply, quickly and constantly. Think YouTube channel style: agile, to-the point, always fresh.

Corporations, who embrace the LXP approach where all employees can easily become trainers, will soon discover that most of the content pieces in the crowd-sourced will be the following formats: text, video, pdf, video-conference, quiz, presentation and shared documents. One really does not need anything else to deliver great training.

This means very expensive e-learning modules of the past, running on your 90’s-era LMS are the thing of the past. They are going away for good as most training programs do not need to be in a specialized “SCORM” enabled Adobe Flash (what?) container. E-learning modules have never been sexy, but they should be pretty dead in the new age of corporate training.

To sum it all up, in order to stay relevant, corporate instruction must be digital, remote, and scalable. And put the instructor back into the training programs, get rid of boring, inefficient e-learning modules.

Three tips to make a good online course

Creating a good online course is an iterative design process with the end customer in mind.

Creating a good online course is an iterative design process with the end customer in mind

Online courses and webinars are becoming a good revenue source for the pioneers of the online learning revolutions that is unfolding in front of our eyes. The revolution is taking place right now, and we at Rukuku are in the middle of it all which is pretty exciting. In one of my previous posts, I talked about the independent instructor becoming the new success phenomenon in the world of media, and I concluded that the world of instruction will produce a lot of instructor entrepreneurs who will do well, and then there will be a small group of instructors who will do extremely well and have celebrity status.

The truth is anyone can be famous for 15 minutes with a course, but how does one get sustainable popularity? Here are three tips:

Make engaging and useful content
In the online training and education world the answer is no different than in any other media: an instructor has to generate fun, useful content. Remember the boring lectures at university that sucked the living soul out of you? That would never work online, and never make a course successful. The modern independent instructor needs to think in terms of entertaining their audience while training them. This thinking should permeate the design of the course as well as the presentation style of the instructor.

Less is more
Many large organizations are holding on dearly to their legacy e-learning content. At these organizations nobody is bothered that the traditional e-learning modules are badly designed: they are too long! This usually achieves one goal very well: numbing the mind of the course taker. The new knowledge that we have is that it is best to break up the courses into smaller chunks of 1 to 6 minutes long. This helps avoid learner fatigue as she moves from one logical chunk to another in a steady rhythmic way

Do niche marketing
Producing a course and formatting it in an appropriate way is only the first half of the job. The other half of the job is promoting the course and the instructor’s brand. For example, one of our instructors has figured out that her customers are best reached through professional associations so she started reaching out to these organizations on the phone and worked out a promotional deal whereby the associations became resellers of her courses. In essence the instructor found a good distribution channel for her content and invested in it by sharing revenue with the distributors. She then collected feedback from the many students that took her course and made improvements based on that feedback. Those who master the marketing and promotion game will stay relevant for years on end: good marketers know their target audience through and through, and that knowledge will then feed back into content production and formatting. We have come a full circle.

It is easy to see that in the heart of it all is learning everything about the end customer as well as understanding what, how and when they want to learn from you.

Create your first course on Rukuku

Independent Instructor Is The New Hero

In the past several years we have seen how computer programmers changed the world: they wrote software that transformed our lives, and ultimately enabled data flow in all sort of ways. After the software was good enough for large scale adoption, we saw the spectacular rise of content sharing: from Facebook, LiveJournal and Huffington Post to Medium and Svbtle – marketing driven content platforms continue to change and speed up information exchange.

In other words, content is king. This is especially true in such content and communication heavy areas as education and training. Rukuku was started with an acute understanding that instructors generate a ton of content all the time: they prep for classes, write books, make presentations, draw illustrations and so on. They create day in and day out for a very specific, engaged and content-hungry audience: their trainees and students.

In the past, there was a huge problem: these people could only influence relatively small groups of people – those whom they could meet in a classroom environment. Nowadays with our service and other technologies, instructors can scale beyond the confines of a classroom and impact millions of people. Data shows that this will essentially be a blended training revolution.

The collective effort of these entrepreneurial and creative instructors will change the way people learn and acquire skills. I believe the blended training revolution will impact the instructors themselves in a spectacular way:

Impact_Independent_Online_Instructors

  • Some instructors will become famous – I define this category as “altruists”
  • Some instructors will become rich – “entrepreneurs”
  • Some will be both famous and rich – “celebrities”
  • Most will have limited or no impact or success – “hobbyists”

Given the massive scale of this process, my view is that the power law will apply here: the true revolution in education and skills training will come from about 20-30% of all involved independent instructors, and these individuals will become the new heroes of this decade.

Independent_Instructors_20-30_percent

 

Three Elements For Designing More Successful Online Courses

Producing content is a difficult, slow and often expensive process. Although the cost of production has gone down thanks to new technologies and desktop editing, it is still a logistical hurdle. And many discover that after so much effort, there is risk that the content will have limited appeal to the students. All of these are legitimate concerns when it comes to course authoring. For these reasons, many instructors are reluctant to author courses and forego on a wonderful opportunity to make the world a better place and earn some money in the process.

However, quite often an independent instructor’s course gets a ton of success, scales well, spreads quickly on the web and brings its author a considerable income: in some cases in the hundreds of thousands, and in exceptional cases – millions of dollars. While multi-million dollar success stories are exceptional and extremely rare, an average online course of decent quality generates anywhere in the range of $3,000 to $30,000 of revenue a year.

How do you get there? First and foremost, before you think about marketing, distribution and other business issues, the content of the course has to be relevant, useful and interesting. We are convinced that webinars are an excellent tool for iterative development of online course content, and here’s how the whole setup pans out:

1. Agile development

At Rukuku, we are big fans of agile development and customer discovery. Last year, we were blessed to have been selected for the National Science Foundation’s iCorps training program at UC Berkeley. It is not surprising therefore that we think that lean methodologies and iterative development should be applied to course authoring. Agile development methodologies for course authors can be summed up as:

  1. build your course in small increments one piece of content at a time – Rukuku Composer is perfect for that
  2. collect data and feedback on each additional piece of content – see point 2 below
  3. improve the content
  4. repeat

   2. Customer discovery

Collecting feedback is all about getting out of the building and talking with people. Pick up Steve Blank’s book, read Alexander Osterwalder’s book, or better yet – take Steve Blank’s free course on Customer discovery. This methodology is a reliable and tested approach to discovering what is right for your target customer. Simply, it boils down to doing three things in a structured and organized way:

  1. talking to your customers
  2. recording and organizing customer feedback
  3. analyzing this feedback and acting on it

3. Webinars

Use webinars as your Minimal Viable Product (MVP) testing environment. Rukuku is perfect for doing webinars, whereas webinars are an amazing way to test your content. When you are hosting a webinar, it is easy to collect feedback from your audience. You can ask the attendees to provide feedback during and after the webinar, as well as analyze the questions posted during the Q&A session or while you were going through your slides. Besides, recording the webinar and analyzing it is a great way to take a step back and look at your presentation skills and course content: pay attention to how you use your voice and how you present yourself on video; take note on the structure of your presentation, engagement of your audience, quality of your visuals and handouts – all of these elements can be tweaked to create a better course. Perhaps the best part about webinars is that you can collect payments from participants and offset the costs of producing your amazing course.

Start using Rukuku for webinars. Take your Rukuku course

Please Separate Pricing And Discounting Channels

valueI concluded in my last post that content marketplaces – education and training marketplaces included – should never offer drastic discounts without any regard to the content lifecycle stages. In other words, don’t do discounting the way Udemy or Tareasplus have been doing it.

I once had a conversation with a founder of a leading CFO training company about allowing a known online delivery platform manage his content. He told me that his value proposition was different from that of the platform in question, and didn’t want his content to be “regularly discounted” as he was worried that would lead to erosion of his core customer base and his entire business.

It is quite difficult to expect a discount on music on Apple iTunes or movies on Netflix or Amazon Instant Video. Apple never discounts anything new directly on iTunes, and the only way to get a discount is via gift cards, which can sometimes be discounted at third-party distributors. Just as luxury retailers have a clearly isolated channel for discounted products, so does Apple.

Netflix may occasionally run discounts on annual or monthly membership payments as part of their user acquisition strategy. However this approach never directly affects the price of programming that the service provides. Because Netflix redistributes revenues to content providers based on views, the brands of film studios are well shielded from any pricing incentives Netflix may provide to the consumers.
Amazon Instant Video content streaming service is bundled under the larger Amazon Prime umbrella – an enhanced high-speed delivery service, which provides fast access to both physical goods via fast shipping and video content via fast streaming. Amazon Instant Video approach is a hybrid between Apple iTunes and Netflix models because in addition to providing bundled content for the price of annual membership, Amazon also sells the hottest movies or TV episodes for a set fee. No discounts.

Apple, Netflix and Amazon Instant Video have chosen simple yet brilliant price-discount decoupling strategies that enhance brands and provide value to both content providers and consumers.

To sum up, these corporations push discounts indirectly, in ways that enhance value of their content.
In online education and training, this same approach has been successfully implemented at least twice: Lynda.com is charging consumers a monthly subscription and so is Infinite Skills, Inc. This approach to pricing together with high quality content created a ton of value and both companies have been recently acquired.

Start creating and selling your courses with Rukuku

Discounts On Online Courses Are Wrong

Never discount unique and fresh online content! Competing on price in content sales is dumb. Just imagine if Hollywood studios started to offer gradually lower prices on their new movies trying to outdo their rivals on price. One can expect a bit of a price drop on old titles, but those reductions are carefully controlled.

In contrast, current prevalent marketing approach of many major online education content providers is based on extreme discounting of their courses regardless of the lifecycle stage of those courses. Companies that engage in this practice are confusing consumers, destroying their brands and killing customer loyalty. This apocalyptic scenario is well pronounced for B2B2C (business-to-business-to-consumer) companies whose direct and most important customers are course authors.

To illustrate the trend, consider the following messaging from several providers. Here’s how Udemy kills course author loyalty, and confuses consumers. First, they email with “top 10 trending courses”, note the prices:

Udemy email encouraging me to buy courses

Then a few hours later they follow up with a discounted offer:

Discounts on Udemy are confusing

Will anyone ever buy at full price? – Nope. And one cannot imagine the frustration of becoming a course author for Udemy – whatever price the course author may think their course is worth, Udemy will always undercut the author via one of these “campaigns”.

Tareasplus tries hard to lead Udemy in the race to the bottom in Latin America:

Steep discounts on Tareasplus kill any desire to buy at full price.

In Spain, an English language course provider ABA is pulling the rug from under its own feet:

65% discount! Really?

And so on…

It seems that these companies are not aware that they are selling content. They behave like clothing retailers who need to liquidate out-of-season fashions to bring in the next season’s collection. Except, retailers know all too well what exactly their respective brands stand for: convenience, value-for-money, status statement, luxury, etc. Online education content providers do not know the exact value or positioning of their brand.

In clothing retail, the seasonal approach to inventory management is sound and explicable, although most high-value brands will never run steep discounts – or any discounts – in stores even at the risk of having unsold inventory between seasons. For instance, it is unheard of for Luis Vuitton bag at a 50% discount – unheard of! These companies liquidate unsold inventory in special “premium outlets” – stores usually situated at a great distance from key retail locations. Some companies sometimes run special and carefully controlled online sales. These measures allow the vendors to isolate the effect of discounted products on their core business and to keep and enhance the value of their brands.

To understand why discounting content is an absolute disaster and a great danger for the content provider’s brands, look at Hollywood’s war on pirating. The same is true for software giants’ fight on illegal software copying. Media industries understand very clearly that they produce unique products that can and do provide long recurring cash flows to their owners.

Education marketplaces that regularly wreck their foundations with extreme discounts need to reconsider their pricing strategies. Carefully tracking the lifecycle of a course is an important thing to do. When the course is new and you have something unique to sell it is incredibly dumb to run discounts.

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