I was reviewing some background documents for a client recently when I noticed that “risk diversification” was indicated as a reason for expanding the organization’s e-learning initiatives. I was struck by this because it marks only the third time in as many years that I have encountered an organization that mentioned “risk reduction” when talking about it’s e-learning strategy.

Naturally, I talk with a limited number of organizations, so my anecdotal experience can only take me so far. But data from our 2009 Association E-learning: State of the Sector report also suggests that risk reduction is far from top of mind when thinking about e-learning strategy. Only 3.5 percent out of 488 respondents indicated that “Reduction of risk related to educational products by diversifying product line” was one of the key reasons for their organization pursuing e-learning.

This strikes me as a significant issue for at least two reasons:

First, it suggests that e-learning strategy may not be as closely aligned with overall organizational strategy as it could be. Certainly a focus on diversifying risk across the educational products portfolio could have helped many organizations handle the current economic environment better. When questions arise – as they did in a “Burning E-learning Questions” Webinar I did yesterday – about how e-learning can help with declining conference and seminar registration, portfolio diversification is right at the core of the matter. Education is a major revenue source for many organizations. Ensuring that this revenue can survive economic ups and downs should be a top line strategy consideration – and e-learning is one of the tactics to support a diversification strategy.

Second, a lack of portfolio diversification suggests that educational strategy is is not as well developed as it could be. Lifelong learners have a continuum of needs, based upon where they are in their career, where they are in their knowledge development, and even – and often most importantly – their personal circumstances. Providing e-learning options that fit strategically into this continuum simply makes good pedagogical sense as much as it makes good business sense.

What’s the situation at your organization? Are you thinking of your educational products as a portfolio? And are you diversifying risk across that portfolio, much as you might do with your financial investments? Please comment and share your perspective.

Jeff

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In the run up to a session on e-learning that I participated in at the recent UnTech10 event, someone planning to attend the session asked about the state of “collaborative learning” in the world of e-learning. As this person put it, collaborative learning

…should be a particular strength of e-learning from the perspective of technological capabilities. Yet I feel we are still in the early stages of discovering how to move from “broadcasting” knowledge to collaborating in learning. Where are the collaborative learning successes in e-learning? What can we do to accelerate this shift?

I have tended to share the feeling that we are still in early stages in the association world, where I do most of my work. I am less tuned in to the worlds of corporate training and academic e-learning, but my general sense is that there is a good bit more hat than cattle in both of those arenas when it comes to discussions of collaborative learning or efforts to blend social media into traditional e-learning.

But then, before traveling too far down the road of feelings, I think it is important to step back and ask as pointedly as possible: What is e-learning?

The “e” part seems relatively easy. You can get cute with it if you want, but most fundamentally it is intended to denote any form of learning that is supported by electronic technologies. For most people, most of the time, that tends to mean the Internet and the Web, but it doesn’t have to. The important part of the “e” is that it provides for degrees of speed, scale, and access that simply were not possible before. From that standpoint, it might include conference calls, CDs, or a wide variety of other electronic media. Debate that if you want to, but it seems to me what really deserves our focus is the part after the hyphen: learning.

If we confine ourselves to traditional ideas of learning, then I think it is certainly true that we are in early stages of realizing the potential of collaborative learning. Traditional ideas of learning tend to lump learning and education together. It is something that happens in classrooms, whether “real” or virtual. It is something that is guided by the hand of an expert, whether that expert is present or not. It is something that involves credit and certifications and other forms of extrinsic validation.

From that perspective, these are early days indeed – aside from the use of discussion boards (with limited success in the majority of cases with which I am familiar), the successful examples of associations integrating collaborative approaches into this type of e-learning seem to be few and far between.

But with a slight shift of perspective, the picture changes dramatically.

As I have already suggested in an earlier post as well as in the most recent Association E-learning newsletter, the recent UnTech10 event was a shining example of this new perspective. So were the earlier Work Literacy and other Learning 2.0 efforts.

But even among more run-of-the-mill annual conference events there is rapidly growing use of tools like Twitter, Facebook, and blogs. The ASAE & Center for Association Leadership LinkedIn group currently has more than 2500 members and the Professional Development Section nearly 500. Surely there is some learning going on in these places. Maybe it’s not as effective as it might be – yet – but we’ll keep getting better and better at it over time as we fully appreciate the potential.

How we view collaborative learning comes down to how we define learning – which, of course, impacts what we mean by e-learning.

I’m not arguing that the standard world of online courses and LMSes and Webinars is defunct – far from it – just that there there is great value in adopting a much broader perspective on e-learning. As I suggested in the recent update to Association E-learning: State of the Sector:

If we confine ourselves to traditional, course-driven conceptions of e-learning, we may eventually find that while we were focused on deploying learning management systems and creating products, the real learning was happening elsewhere.

How are you and your organization defining e-learning these days? What is e-learning? Please comment and share.

Jeff

P.S. – If you’d like to receive regular updates from the Tagoras blog, be sure to subscribe by RSS or by e-mail.

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In my previous post, I referenced a definition of learning I encountered in Digital Habitats, an excellent resource on using technology to support communities of practice. One of the authors, John Smith, was kind enough to drop by and offer the following perspective on learning from a book he is currently reading:

Sociocultural approaches to learning have recognized that kids gain most of their knowledge and competencies in contexts that do not involve formal instruction. A growing body of ethnographic work documents how learning happens in informal settings, as a side effect of everyday life and social activity, rather than in an explicit instructional agenda.

The quote is from Hanging Out, Messing Around, and Geeking Out: Kids Living and Learning With New Media [p. 21] by Mimi Ito. (Many thanks to John for also providing all the reference info!) Definitely looks worth reading. I also encourage you to visit the comments area on the previous post to read John’s further thoughts about associations and informal learning.

On a related front, as I was writing a post on “content curation” over on Mission to Learn, I came across a quote on learning from John Seely Brown that I had used in a post long ago on digital curators. It jibes well with my previous post here as well as with the quote above, so I thought I would offer it up for your reading and thinking pleasure:

Learning is a remarkably social process. In truth, it occurs not as a response to teaching, but rather as a result of a social framework that fosters learning. To succeed in our struggle to build technology and new media to support learning, we must move far beyond the traditional view of teaching as delivery of information. Although information is a critical part of learning, it’s only one among many forces at work. It’s profoundly misleading and ineffective to separate information, theories, and principles from the activities and situations within which they are used. Knowledge is inextricably situated in the physical and social context of its acquisition and use.

I actually originally found this through Jay Cross’ post on documents seminal to learning and the net, which is well worth reading.

As always, I welcome your thoughts.

Jeff

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I offered up a definition of learning as I see it a while back on my Mission to Learn blog. Readers there would not have been surprised that I see learning as being much more about ongoing process and interaction than about specific events or degrees or credit. Earlier this week, I was reading Digital Habitats by Etienne Wenger, Nancy White, and John Smith and found the brief definition of learning they offer to be very well put:

By learning, we do not mean just book learning, or classroom learning, or even e-learning. We see learning as an  integral part of life. Sometimes it demands an effort; sometimes it is not even our goal. But it always involves who we are, what we do, who we seek to connect with, and what we aspire to become. (Digital Habitats, 4)

This definition really resonated with me because it is this sort of perspective that informs the work we do here at Tagoras and why we feel that learning can be such an integral part of meaningful engagement with members and customers. Learning truly does point to “who we are” and “what we aspire to become.”

The only modification I would make to the definition offered by Wenger and his co-authors is to stress that most learning is not “book learning, or classroom learning, or even e-learning” (at least as it is usually understood). One of the real opportunities – and challenges – for organizations is to find more innovative ways to engage their prospective learners (members, customers, prospects, volunteers) during the great percentage of time in which they are not engaged in formal learning.

If you feel your organization is doing a great job at this, making headway, or making attempts but running into barriers, we’d welcome a chance to talk with you as part of our ongoing research. Please comment here or drop us a line.

Jeff

P.S. – If you’d like to receive regular updates from the Tagoras blog, be sure to subscribe by RSS or by e-mail.

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I wrote earlier about how the highly successful UnTech (un)conference sprang up in the aftermath of the ASAE Technology Conference being canceled. In March, there will be another option for those interested in what the ASAE conference had to offer: SnowTech 2010. This one is co-sponsored by CommPartners and Web Courseworks, two companies that are very active in the learning technology space for associations. Here’s the quick rundown from the SnowTech site:

Join industry leaders for six dynamic technology sessions at SnowTech 2010! These  interactive educational webinars will be delivered live, throughout the month of March. These conference sessions are being delivered to you by industry professionals and leaders with expertise in technology for associations and non-profits. Register to attend and participate in any or all of these sessions. There are a total of six sessions throughout March.

One of those six sessions will be a reprise of the “Get Your Burning E-learning Questions” panel that I participated on for the UnTech conference. This time around, though, it will just be myself and Jennifer DeVries from BlueStreak Learning on the panel. Here’s the description (or at least the description I submitted – the one on the SnowTech site is a little different):

Association e-learning veterans Jeff Cobb and Jennifer DeVries will host an open discussion to address the questions you most need answered. Ask questions such as: What options are available for developing courses? How would I determine if I need an LMS – and how do I choose one? How is social media impacting e-learning? How can e-learning integrate with live events? Bring all of your questions to this engaging session.

You can register for the session on the SnowTech site. The fee is $40. (None of which, for what it’s worth, is going in my pocket.) If you have questions you would like to make sure are addressed during the session, feel free to go ahead and submit them in the comments here, or via Twitter.

I hope to see you there!

Jeff

P.S. – If you have e-learning questions, you may also want to check out a couple of earlier posts I did that provided answer to questions asked in a Webinar I did for WBT Systems:

• Association E-learning Q&A: Installment 1
• Association E-learning Q&A: Installment 2
  

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We started some research on Webinar marketing at the end of 2009. This covers not just the marketing of Webinars (regardless of whether you are selling them or giving them away), but also using Webinars as a marketing tool – i.e., educating prospects to get them to buy or join. We’re keeping the survey open indefinitely – basically until we feel like we have gotten a large and diverse enough set of responses. So, if you haven’t taken the survey already, I’d be grateful if you would be willing to give about 10 minutes of your time to do it. The survey is at:

• http://www.surveymonkey.com/s/8X6R9M3

You can download the data collected from the initial 100 responses at the link below. When you complete the survey, you will also be given the opportunity to sign up to have future data summaries sent to you as they become available.

• Webinar Marketing Survey Summary Data (First 100 Responses)

If you have comments or questions about the survey or the data collected so far, please comment below or e-mail us. If you blog or tweet, we’d also be grateful if you would help spread the word.

Jeff

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I’ve finally managed to update – quite significantly – a piece I wrote a couple of years ago on pricing online learning. It’s based on a framework laid out in two sentences by consultant Alan Weiss. Namely:

There are only a few really vital aspects of pricing: The perceived value of your offering, the price point, the margin of profit, and the volume of sales. You can materially affect all of them unilaterally.

You can download a nicely formatted version of the article at Pricing Online Learning (PDF), or simply read on for the full text.

Pricing Online Learning

rom Balancing Act: The Newsletter (No. 94: June 2007):

There are only a few really vital aspects of pricing: The perceived value of your offering, the price point, the margin of profit, and the volume of sales. You can materially affect all of them unilaterally.

I ran across the above passage from Alan Weiss, author of Million Dollar Consulting: The Professional’s Guide to Growing a Practice nearly two years ago when I was attempting to articulate my thoughts about how to price e-learning. It struck me as a good framework at the time, and it still does. Here are some brief thoughts on how these “vital aspects” apply in our current environment.

The Perceived Value of Your Offerings

What you are able to charge for your e-learning offerings – or anything else, for that matter – is dependent upon the value your prospective customers place upon them. It is essential to recognize that this value is a dynamic phenomenon. It changes over time and from customer to customer, and most importantly, you have the power to impact it through your product strategy, marketing efforts, and ongoing interaction with prospects and customers.

When attempting to assess the value that prospective customers might place on your e-learning offerings (e.g., through surveys, competitive analysis, etc.), I believe it is important to lay aside any biases you may have – or assume your customers have – about the delivery method or how online offerings relate to any classroom-based education you may offer.  If you start with the assumption that education delivered online is inherently of lower value than classroom-based education that is almost certainly where you will end up with your customers.

Instead, consider the qualities your prospects are likely to value across any of the educational experiences you offer – regardless of delivery method – and then determine where each e-learning product fits within your full range of educational offerings.

As a general rule, perceived value of an educational product tends to be lower when,

• the product is highly generic, designed for the largest possible audience
• the product offers users limited or no ability to get input specific to their individual needs
• the intellectual content of the product is produced by an unknown or little known expert
• free or lower cost alternatives to the product are widely known and easy to find

Note also that convenience as a value driver for a product – the driver I most often see associations use for e-learning – almost always correlates with lower perceived value.  The reason for this is that convenience is nearly always based on a transactional relationship with a customer rather than a deeper, more nuanced exchange of value.

The bottom line is that e-learning is not an inherently low-value offering. You have control over all of the factors above, and the strategic decisions you make about each will drive the perceived value of your offerings up or down.  Determine where it makes most sense for e-learning to play a role across the spectrum of educational value your organization offers, and then plan and implement accordingly.

The Margin of Profit

Margin is the spread between what you charge for a product or service and what it costs you to provide the product or service.  It is critical to understand how value is perceived and constructed because it is a key factor in determining the top end of this spread. On the bottom end is cost.

A key factor that makes e-learning so attractive for associations and other organizations that sell education is that in theory it offers an opportunity for driving down costs substantially, thus creating the possibility of higher margins by managing the bottom end of the spread. In practice, many organizations do not actually have a good gauge on their underlying costs for creating and delivering e-learning. Many also make the decision to price e-learning significantly lower than their place-based offerings without considering the value factors discussed above or the overall impact on margins.  The result is that the full net revenue potential of e-learning is often not realized.

While organizations do not have complete control over value perception, they do have the ability to influence value perception significantly. And certainly they should have control over the amount they invest to construct a desired level of value. In other words, any organization that pursues e-learning strategically and plans properly should be able to achieve and maintain healthy margins. (Or possibly determine that healthy margins cannot be achieved and thus make the strategic decision to stay out of e-learning.)

There is no magic number or percentage for what your margins should be, but whether you operate on a for-profit or a nonprofit basis, my bias is always to try to maximize margins. There will nearly always be downward pressure on prices in the future and you will need to continue to invest in your e-learning offerings. Your margins give you the funds to do that, and the more cushion you can create, the better.

The Volume of Sales

Value is one key factor in determining the top end of your margin spread. Volume is another. High perceived value doesn’t get you very far if the size of the market you are targeting isn’t large enough to cover your total costs. Put another way, if your total product costs are $100, finding two people who value the product at $40 per unit won’t do you much good (you’ll lose $20), but finding 5 people who value it at $25 will (you’ll make $25).

Seems simple enough, but of course, there is more than a little guesswork involved in determining how many potential purchasers value your product and at what level. This is an area in which organizations selling e-learning can benefit greatly from two essential practices of successful Internet marketers:

• Test (and re-test) your market before producing
• To the greatest extent possible, pre-sell before producing

Covering these two items fully is beyond the scope of this article, but the general idea is that you can test a product’s viability by creating a variety of different promotions for it that ask people to take an action – like, for example, handing over their e-mail address in exchange for additional, valuable information.[1] The response rates to these promotions gives you an idea of how many people are actually interested in the product. Based on the size of this group, you can then run an introductory offer at a price designed to at least cover your fixed production costs.

I deal with many groups that are in a position to all but skip the first step simply by going to a member or customer with the ability to make a reasonably large purchase and setting a per unit price that covers total fixed costs for launching the product. Even in these cases, though, I still recommend doing broader market testing: you may have your downside covered, but you also want to know what your upside might be (i.e., how large your overall market it) to help you gauge how much you should invest in promotion and assess the level of gross margin you may ultimately have available to apply against operational costs.

I noted above that my bias is to try always to maximize margins, but of course this has to be done within the context of volume. You want to sell as much as possible at the highest possible margin, but adjusting margin up or down – assuming costs remain constant – can impact the volume you are able to sell. This trade-off is reflected in the final and most visible factor in pricing – the price point.

The Price Point

Although Alan listed the price point second as an aspect of pricing you can affect, I think it is important to understand value, margin, and volume before attempting to establish the price point. When you have really understood these factors and assessed them in your market, you will have the clearest possible understanding of the right products to create (value), the appropriate range of investment for creating them (value plus desired margin), and the size of your potential market (volume). The price point is the synthesis of all of these factors and it should strike a balance between them that maximizes your net revenue.

In truth, it is likely that you will not establish a single price point for an e-learning product. Because your product will be valued in different ways by different audiences, or segments, within your overall market, it makes sense to vary pricing for these different audiences. This doesn’t mean favoring one group with a lower price while pulling the wool over the eyes of another in order to charge a higher price. Rather, because you will have an understanding of value, you can add or remove value based on audience preferences and adjust price accordingly.

For example, a portion of your audience is likely to value receiving credit or some other form of validation for successfully completing an e-learning program. This might be a feature for which you charge extra. So, too, might getting access to a recorded version of a Webinar. And it is certainly fair to give discounts to individuals or organizations that purchase courses or other learning events in high quantities.

What then are typical price points for e-learning in the association market? I am tempted not to cite any because the only other price points that should matter to an organization are potentially those of competitors. (And as Apple, for example, has demonstrated so well, even competitor pricing should be given only so much weight.) Additionally, our research suggests that only 20 percent of associations have any sort of formal process for setting price – which makes me wonder how much thought is being put into value, margins, and volume.

Still, it can be helpful to have some sort of benchmark, however, general, against which to gauge your organization’s pricing. We go into much more detail about pricing in our Association E-learning: State of the Sector report, but the average price per e-learning content hour in the association sector – based on our survey of nearly 500 organizations – is $56.79. Per credit hour the average is $73.97.  So, for example, based on these figures, the average fee for a 90-minute Webinar that offers CE credit would be around $110.

Conclusion

I began this discussion by focusing on value, and it seems important to note as I conclude it that the price point is not only dependent upon perceived value, it helps drive perceived value. Part of what gives a Mercedes or a Louis Vuitton handbag its sheen of value is the high price point associated with each. To a certain extent, of course, the price is driven by underlying cost. But it is also true that these companies simply have the audacity – the organizational self-esteem, you might argue – to set a premium price. And people gladly pay it.

Few associations, I find, are willing to take such an approach with pricing their e-learning, and perhaps few would succeed if they did. But my suspicion is that most organizations are pricing at a lower level than they need to simply because they have not fully assessed the value – volume -margin relationship. And this is not a trivial matter: it is well established that an increase in price is one of the most effective ways to increase profit.  A study by the consulting firm McKinsey & Co. way back in the 1990s showed that a 1% increase in price translates into an 11% increase in profits. On the other hand, increasing volume by the same amount resulted in only a 3.3% increase. Cutting variable costs by 1% resulted in a 7.8% increase and cutting fixed costs – only a 2.3% increase.[2]

Given the need that most organizations have right now for finding new revenue sources and getting more revenue out of existing sources, putting some effort into setting the best possible pricing for e-learning offerings seems certain to be time well spent.

[2] This study has been cited in a wide range of places, but I came across it most recently in Todd Sattersten’s excellent eBook Fixed to Flexible.

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In March 2009, we published Association E-learning: State of the Sector. With a new year under way, it seems like a good time to provide an update. So, to that end, we’ve put together a brief follow-up to the 2009 report to offer our views for e-learning in the sector in 2010.

For now I’m just going to get this up so that it is accessible, but I plan to say more about it in some follow up posts. Here’s the download link:

• Association E-learning: State of the Sector Update 2010

One other note to go with it – we are now also offering a complimentary copy of the condensed version of the 2009 Association E-learning: State of the Sector report to newsletter subscribers. You don’t have to have this for the 2010 update to make sense, but it does offer a lot of valuable detail and perspectives. Sign up and you will be sent a link to download it.

To be clear, the condensed report is not some fluff whitepaper or eBook. It offers 6o pages of content based off of numerous interviews with associations and responses by nearly 500 organizations to an extensive survey. You can out more about it on the newsletter sign-up page.

As you read either of these documents, we encourage you to come back here and comment, offer examples, opposing views, etc.

Enjoy,

Jeff

P.S. – If you’d like to receive regular updates from the Tagoras blog, be sure to subscribe by RSS or by e-mail.

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I’ve written elsewhere about how I think LinkedIn can be a valuable learning tool. One of the features I highlighted was the ability to join and engage in Groups. As it happens, I’ve noted quite a few conversations in Groups over the past couple of weeks that I’m betting readers here might find valuable.  You will need a LinkedIn account to get to these, but you already have that anyway, right? For some you will also need to join the group, but if the question is one you really need answered, that’s probably more than worth it.

Here are the links:

Learner tracking without an LMS
Good discussion on whether you really need an LMS or not, and what the other options might be. (eLearning Guild Group)

Can anyone explain to me the process by which an e learning course is approved for CE credits?
If you need an answer to this question, you will find it here. (eLearing Guild Group)

Which LMS are you using for your online courses?
Moodle is the popular answer so far. What are you using? (ASAE & the Center Group)

Does your organization have a chief learning officer (or something roughly equivalent)?
An interesting range of responses so far. What’s yours? (ASAE Professional Development Section Group)

What lessons from your first job do you still use today?
Nearly 900 responses to this one so far! (eMarketing Association Network Group)

These are just for starters. There is quite a bit of good learning going on within the LinkedIn network. If you haven’t really thought about using LinkedIn for this purpose (or using LinkedIn at all), now is a good time to start.

Jeff

P.S. – If you’d like to receive regular updates from the Tagoras blog, be sure to subscribe by RSS or by e-mail.

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I wrote earlier about the transformation of the canceled ASAE Technology Conference into UnTech10. Since then I have been in contact with everyone who was going to be on a panel with me at the original event, and we will now be doing a free virtual version by Webinar on Friday at 2PM eastern. Here’s the session description and access information:

Ask the Experts: Get Your Burning eLearning Questions Answered
Learn from a panel of experts, each with decades of experience designing and implementing successful e-learning programs. Ask questions such as: With e-learning, is it possible for a learner to communicate with an instructor or peers? How would I determine if I need an LMS? What options are available for developing courses? Bring all of your questions to this engaging session.

Panelists:

• Jeff Cobb, Tagoras
• Jennifer DeVries, BlueStreak Learning
• Lance Simon, iCohere
• Neal Sipress, KRM

Access Information:

Link: http://www.BlueStreakWebinars.com/Instructor19
Phone: 218-339-2409
Passcode: 3768251

Hope to see you there. If you have any questions you would like to see addressed in the session, it would be great if you would go ahead and submit them in the comments here – or send a Tweet to me at @tagoras.

Jeff

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