How should SaaS providers charge for training?


reading time 3 min

The other day a vendor added $6k of “training” to my quote. Here’s how insulting that is.

First of all, it was added after we finished all our price negotiation. The almost-final-draft quote arrived and it was $6k higher than expected. What’s this? Oh, the salesperson added pre-paid training with a URL to a list of courses we could take.

I was so insulted that I immediately called my salesperson and told her to remove it. (Yes, I actually used my phone to make a phone call! That’s pretty rare!)

Here are a few ways to package training with your software and how the customer should react:

The training is at full price: Super insulted. Any kind of “use it or lose it” training is a lose-win deal. If I use it, I’m paying you to hold my money. If I don’t use it, I lose it. Plus, you’ve fucked up my ability to apply the training to our employee’s individual training budgets. The message you send is, “We’re testing to see if this customer is dumb as fuck.”

The training is 100% discounted/free: Not insulted but now I know you are bad at business. This shows that your training is considered useful and that you aren’t sleazy enough to make your training department a profit center. (See below why this is bad.) If your training department is a profit center it creates a toxic incentive to make the software difficult to use/maintain.) Sadly making it free devalues it. People won’t sign up for the training because “how good could it be if they give it away?” If your goal was to reduce onboarding and support costs, you’ve failed.

The training is discounted: Not insult, happy to buy! Now you’re giving me an incentive to pre-pay. That makes it a win-win. I get a discount, you get fewer dumb questions called into customer support. The message you send is, “this will help you be a success with our product. Please please take this offer! It’s worth it!”

Here’s some DO’S and DON’Ts if you sell to me:

  • DON’T surprise me with add-ons after we’ve agreed to a price.
  • DO discuss training with me as part of the sales process.
  • DON’T charge for training related to onboarding/installation. That’s just insulting (do any of your customers NOT need onboarding/installation?)
  • DON’T treat training as a profit center if it would create a perverse incentive to maintain crappy software. Don’t create a situation where your training team begs your devs to not improve their shitty installation process because it could hurt their sales target.
  • DO make training a profit center if the training is “up the stack” (soft skills, methodologies, etc. that happen to use your software).
  • DO give me an incentive to buy it at initial purchase time by offering a 50% discount.
  • DON’T offer the same discount it after the fact. If I discover that your “discount” was fake, I’ll never buy from you again.

Here’s a protip: If your pricing strategy makes people write blog posts that use the phase “dumb as fuck”, you’re not good at business.

In summary, don’t be a dick.

P.S. Around 2004 my (then) employer paid a lot of money to send me to training for a particular fruit-related server product. The trainer kept boasting, “this is something you won’t find in the manual”. It was things like “installation won’t work if you don’t reboot between step 3 and 4”. I asked, “Why don’t you tell the documentation people to update their docs?” and he looked at me straight in the eye and said, “Then you wouldn’t need to take my class!” What a shitty company.




Tom Limoncelli

Tom Limoncelli

Recent Posts


  1. VMware WorkspaceONE Notifications are a crime against productivity
  2. Numberwang (all videos)
  3. Cory Booker Teases Tuberville Over Defund The Police
  4. The Minimalist Headset Solution
  5. Fun With Shipping

Archive


Categories


Tags


I agree that this website may store my data to personalize my journey in accordance with their Terms & conditions

Powered by Hugo | Theme - YesThatTheme © 2017 - 2021 Tom Limoncelli