“We’re looking to you and your company as our new rainmaker.”
I’d never really thought of an eLearning instructional designer like myself as a rainmaker for large companies before. But, as I sat at the 12-seat conference table and listened to the fourth Fortune 500 company executive in as many months excitedly explain his plan for an online membership university, the idea was starting to sink in.
It’s not that I didn’t understand the concept of how online universities can make money. I experienced it first-hand when I started one of my own back in 2008 for solo entrepreneurs. That site had a monthly membership of 1600 and each member paid a $587 annual membership fee to get four new courses per month and membership in a private “mastermind” Facebook group. A large business consultancy bought out my little university in 2010 and it was at that time that I realized the profit potential in Business to Consumer (B2C) eLearning. But large corporations weren’t seeing the value then; to them, eLearning was just something for internal employee training or, at the very most, vendor training.
“Education Capital”: The Great (New) Differentiator
But, oh what a difference a long-term economic downturn can make.
Companies – especially those selling commodity products and services – are looking for ways to stand out from competitors and to offset dwindling profits in highly competitive, low-margin markets. These organizations are using their internal knowledge, or “education capital,” as the new differentiator—and as supplemental profit centers for ongoing, passive income.
And it’s a lucrative market. Last year, Inc. magazine called online for-profit courses “one of the top 8 niche markets” and predicted branded eLearning would remain a lucrative market for several years. The numbers bear that out: Online courses are a $4 trillion business worldwide and a $1.5 trillion market in the U.S. Who are these companies and what types of courses do they offer? According to an August, 2014, survey conducted by DigitalWits, here are just a few that plan to launch branded, consumer-based courses:
- A large publishing company developing an online leadership academy (this company is one of my clients);
- A kidney dialysis company developing gamified patient education programs and an interactive patient eLearning portal;
- A computer manufacturer looking to build customer loyalty through a series of (fee-based) courses on cyber security techniques;
- Another computer company currently developing courses to teach non-programmers how to develop mobile apps;
- A news organization looking to capitalize on the intellectual property of its reporters by opening the virtual doors on a branded personal finance academy.
Fluke or trend?
Corporations are spending big -- and seeing some big returns -- on consumer eLearning.
According to an August, 2014, survey conducted by DigitalWits, more and more companies are developing “eLearning profit centers” where they sell courses directly to end consumers. Why? Because just as content marketing (blogs, articles and white papers) builds loyalty, brands, and profits, so do online course offerings. The survey was sent to 300 Fortune 500 companies and 300 Small-to-Medium-sized companies. One hundred seventy-eight Fortune 500 companies responded to the survey; 204 of the smaller companies responded.
When asked if they had plans to create online courses as part of an advertising or marketing campaign, 47% said they “had seriously discussed the idea with C-suite executives;” 28% said they had either “no intentions” or “had not even considered” using eLearning for anything other than employee training; and 1% said they had “no opinion.” But here’s the kicker: 27% checked the box that said they were “in active development or will launch within the six months” a consumer-based MOOC or online university.
Cha-Ching! Corporations turn to eLearning to boost profits, brand awareness and customer loyalty.
Now, 27% may not seem like a large percentage. But remember: Just four years ago virtually no companies – large or small-- used eLearning courses or online universities as part of a marketing and sales strategy. But those companies in the 27% group will, no doubt, be market leaders in their industries because they have found a way to differentiate themselves in a commodity-mindset economy. And most (89%) companies that plan to use eLearning as a brand builder also plan to charge for those courses—anywhere from $19 to $197 per course. As one of the survey respondents from a Fortune 100 company stated, “We’ve done the market research and customers are clearly hungry for one-off courses that can help them solve a problem or develop a skill. We wouldn’t be investing in this if the payoff wasn’t there.”
Small to Medium-Sized Companies Get Biggest Return on Investment from Online Courses—So Far.
The survey responses show that companies in the Fortune 500 group had little sales and marketing impact data from their online branded courses. This is likely because they are late to the party; enterprise organizations are still in the pre-launch phase, whereas most of the small and medium-sized companies (100 to 500 employees) have had branded courses in place for one to two years. Of those companies with at least one year of data to report, 37% attributed an increase in product sales directly to the courses; 34% said the courses increased customer loyalty and retention; and 29% said it increased their position as a top-of-mind provider in their market niche. Measurement metrics included customer click throughs to product and purchase pages after completing a course, surveys that asked customers how they had heard of the company, satisfaction surveys, and market and competitive surveys.
Three paths to eLearning profits
But just what are these companies teaching? How do they sell online courses while staying true to their core product offerings and brands? For answers to that, let’s go to the survey results.
- Consumer Skill Development
Of the 27% of companies that will launch consumer-based courses within the next six months, more than half (61%) say they will use the courses to help people develop skills that relate to their products. For example, a plumbing manufacturer (full disclosure: one of my clients) plans to launch an online Interior Design School (complete with a certification) that will teach the basics of aesthetics, colors, technology and emerging design disciplines through a 3D simulation environment. Each course will focus on a different room in the home. The courses will be free, and hosted on the company website. The anticipated payoff? Company officials say as consumers take the courses, trust and brand loyalty will be built and when people want to put those design skills to use in their own homes, they’ll think of the company’s products first. A large food company has a similar approach, with plans to launch online gourmet cooking classes for amateurs with high-profile chefs making cameo appearances in the courses. This company plans to use a combination of in-house content, curated content and user-generated content. - Thought Leadership
Twenty-two percent of survey respondents plan to leverage the knowledge and experience of their key managers to create online business courses. High-profile CEOs, Marketing Directors, or other C-Suite types can build not only their own reputation, but that of their companies through interactive and entertaining courses. But one company from the survey isn’t using its big wigs as thought leaders; it’s using the company’s scientists – the worker bees in the lab who create all those cool products. Starting next February, these skilled professionals will teach how to use the scientific method to solve basic, everyday problems. By making science more understandable to the general population the company hopes to get consumers excited about the science and, in doing so, get them excited about the science behind the products the company creates. - Professional development courses
The trend driving this eLearning niche is the decline in corporate-sponsored employee professional development. Most in-house employee training is geared toward product-specific training or technology skills development and that leaves a big gap – and a big need—for more “soft skills” courses. And 14% of the companies in our survey see closing that gap as a smart marketing move. Professional development courses leverage the intellectual capital of a company to help professionals build skills in a particular industry. For example, one startup talent management company that responded to the survey has plans to build brand loyalty by launching a “Power Recruiters Academy.” Their courses will teach advanced techniques in candidate interviewing, sourcing and creative (and unconventional) ways to use Pinterest and SnapChat to woo Gen Y recruits. The strategy is that as recruiters and HR professionals take the courses, they will also then think of the company’s talent management software as ‘best in class’ when their companies are in the market for new HR-related software.
Is creating online courses for profit right for your company?
Online course creation for marketing, branding and income is not for every company; it takes a serious time commitment, requires more resources than traditional employee learning, and the courses must be of a much higher caliber and quality than much of the employee-based training we see today. The rapid-fire “churn and burn” eLearning development cycle in most companies today won’t work for a for-profit course offering, or even for a free brand-building course. Plus, you need someone experienced in consumer education marketing.
But it’s important to know – before you start gathering resources and creating courses – whether you will get the financial payoff from the course, and whether or not there is a viable, profitable market for the course(s) you are considering. How do you know if you have a profitable niche for a course—and whether it makes sense for your company to use online courses to bolster your corporate reputation? You can use our free “Branded Course Decision Roadmap .” The roadmap is quick, easy, and straightforward. Through a series of yes/no questions, you’ll know if your course idea has profit potential or brand-building power– or lacks the market interest to make it a winner.
