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How To Capture More Training Dollars

"Training is one of the most under-marketed services that software companies offer," says consultant Dorene Sykes of Services Marketing Partners. "Once a training session reaches breakeven, every additional registration is almost pure profit. Yet often the only marketing effort for training is a boring catalog of courses."

Moreover, she says, "customers have always been willing to pay full price for training, even when they haggle over the price of software and maintenance. In their eyes, training is a tangible, high-value product."

So how does a company increase its training revenues? Sykes says there are several tactics that she recommends:

  • Get the sales force on board: New customers are hot prospects for training, Sykes points out, "but product sales forces typically aren't compensated for selling training--or services in general." Paying commissions on training is only part of the solution, she adds: It's also important to develop "package solutions" that are simple enough for the sales force to explain, yet flexible enough to satisfy unique customer needs.

  • Build a prospect list: "Training is a service that can be sold to almost every user in a company, but software companies usually only mail to a few names--the people who actually bought the product, and anyone who may have attended earlier courses," says Sykes. Getting more names can be tough, she concedes, but a good starting point is simply to ask current attendees for a few referrals. "And it may be worthwhile to rent a mailing list of users in your application category from a list broker or a magazine," she adds. "These are people who spend money and want to learn--a perfect profile for training."

  • Create incentives for multiple attendees: "When a company is on the edge about how many people to send to a class, a 10%-15% 'bring a buddy' discount will often tip the scales," says Sykes. However, deeper discounts may have a negative effect: "They tarnish your image of quality, they can create channel conflict with third-party training firms, and they may make the deal too complicated for a quick decision."

  • Encourage instructors to suggest advanced courses: "It's a real challenge to convince individuals that they need more than a simple intro course," says Sykes. "But there's no better time than when they're sitting in a classroom and the instructor highly recommends an advanced class. Testimonials by instructors go far."

  • Offer personal incentives: Training can be hard work, so it helps to promise a little fun, too. "If possible, you should schedule classes so the attendees have a weekend in a new city, or perhaps a few days in a warm climate during the winter." For a $2,000 advanced course, one client handed out a premium logo jacket, says Sykes. "It seemed like an expensive gesture, but it only represented 2% of their registration income. And it really drove revenues for the course."

  • Turn diplomas into a sales tool: "Many companies hand out a certificate at the end of every course," says Sykes, "but more often than not, they're the ugliest things you've ever seen. If you design a certificate that people are willing to hang on their wall, it'll advertise the course and remind the person who attended that the session was valuable."

Dorene Sykes, principal, Services Marketing Partners, 215 Old County Rd., Lincoln, Mass. 01773; 781/259-8569. E-mail: dsykes@smpartners.com.