Both marketing and strategy are fundamental to the health and success of a learning business, which is why we’re addressing them in the context of the learning business MBA. Of course, the learning business MBA doesn’t exist yet. Rather, we’re using it as shorthand for the key skills, knowledge, and behaviors needed by those working … The post The Strategy and Marketing Episode appeared first on Leading Learning.
Both marketing and strategy are fundamental to the health and success of a learning business, which is why we’re addressing them in the context of the learning business MBA. Of course, the learning business MBA doesn’t exist yet. Rather, we’re using it as shorthand for the key skills, knowledge, and behaviors needed by those working … The post The Strategy and Marketing Episode appeared first on Leading Learning.
Both marketing and strategy are fundamental to the health and success of a learning business, which is why we’re addressing them in the context of the learning business MBA. Of course, the learning business MBA doesn’t exist yet. Rather, we’re using it as shorthand for the key skills, knowledge, and behaviors needed by those working in market-facing learning businesses so they can ensure their organizations survive and thrive. While a single podcast series won’t allow us to do the work of a true advanced graduate degree, we can cover some key areas, give you ideas to ponder, and offer tools to try in your learning business.
In this second installment in our seven-part series on the learning business MBA, we focus on two fundamental areas of knowledge for those leading and working in learning businesses: strategy and marketing. We offer definitions of each and share related resources and tools to help you grow your learning business in each of these areas.
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Download a PDF transcript of this episode’s audio.
[00:25] – Intro
[01:28] – Strategy drives—or should drive—essentially all that happens in a learning business. When it comes to defining strategy and understanding what it is, we may not have a clear and common understanding. Our go-to definition of strategy is based on the work of Benjamin B. Tregoe and John W. Zimmerman in a book from 1980 called Top Management Strategy. They define strategy as a “framework which guides those choices that determine the nature and direction of an organization.”
There are thousands of decisions, some big, some small, when it comes to running a learning business: How do we define our target market? What products and services should we offer? How should we price them? What technology should we use?
We like that Tregoe and Zimmerman think of strategy as a framework that guides your decisions. Strategy assumes there is something you’re trying to do and that you have a general approach to how you’re going to do it. Strategy should guide how you behave, particularly with respect to the market in which you operate. It should also guide how you allocate resources. Strategy has to lead to action.
We also like the Tregoe and Zimmerman definition because it’s short and sweet, which makes it easier to remember and therefore more actionable. The definition can remind you and your team about what you should be doing with strategy: setting the organization’s direction and making choices.
[03:51] – That focus on action is something that really comes across in a 2011 book on strategy that we highly recommend: Good Strategy/Bad Strategy: The Difference and Why It Matters by Richard Rumelt.
Rumelt breaks strategy down into three essential components: diagnosis, guiding policy, and coherent actions.
The tricky thing about strategy is that it’s deceptively simple, and the best strategy usually comes from some insight, and insight isn’t easy. You have to diagnose the situation accurately and honestly to have a shot at a good strategy—and that’s much harder than many organizations appreciate.
We appreciate Rumelt’s title Good Strategy/Bad Strategy: The Difference and Why It Matters because it suggests it can be hard to tell good strategy from bad strategy. They can look alike, and it can take some work to see the difference. Because the best strategies are usually simple that can lead to imposters who mimic the simplicity of real, good strategy. But when it comes to strategy, imitation isn’t effective. You can’t copy and paste and expect to thrive.
Strategy should not be confused with best practices. You can’t copy a brilliant strategy from another organization. Strategy needs to be organic, born out of out your learning business’s unique set of circumstances, taking advantage of your strengths while addressing your weaknesses and with an awareness of competition and change in your market. And, most importantly, strategy should be proactive, not reactive, and following someone else’s strategy, even a good one, keeps you in a reactive, let’s-see-what-they-do mindset rather than looking out to the future and proactively shaping that future and your learning business’s role in it.
Jeff Cobb
[07:59] – Your choice of learning technologies should be driven by strategy. If you’re looking for a strategic technology partner, please check out our sponsor for this series.
The COVID-19 pandemic catalyzed the merging of events and education for organizations across the globe. Organizations have realized that synergizing their education and events strategies produces immeasurable benefits, but they need a technology solution that facilitates that merge.
Cadmium is focused on providing a full suite of technology solutions enabling organizations to meet the changing environment head on. From a host of event technologies to integrated learning management and content creation tools, Cadmium offers everything an organization needs to generate revenue and drive engagement.
Learn more, and request a demo to see how Cadmium can help your learning business at gocadmium.com.
[09:02] – Being proactive, not doing whatever everyone else is doing, looking for your learning business’s unique positioning jibes perfectly with another of our favorite strategy resources: Blue Ocean Strategy. This is the work of Chan Kim and Renée Mauborgne, both professors at INSEAD, one of the world’s leading graduate business schools.
In 2005, they published Blue Ocean Strategy based on over a decade-long study they had made of key strategic moves spanning more than 100 years and 30 industries. In 2017, they published a follow-up, Blue Ocean Shift, based on another decade of research and real-world examples of organizations that have implemented blue ocean strategy.
Blue Ocean Strategy challenges the tenets of competitive strategy, which was the dominant school of strategy when the book was published. Kim and Mauborgne called for a shift from focusing on competition to a focus on creating new market space, which would make the competition irrelevant. Their view was that cutthroat competition results in a bloody red ocean of rivals fighting over a shrinking profit pool. Lasting success, they argued, comes from creating “blue oceans”—untapped new market spaces ripe for growth.
Tied up in that challenge to competitive strategy was a challenge to the conventional wisdom that an organization has to choose between either being low cost or differentiating to add more value. The blue ocean strategy approach is that you can differentiate and add value while also delivering at low cost—so it’s a win-win for the organization and its customers.
With the traditional competitive view of strategy, an organization begins by analyzing the industry and competitors and then carves out a distinctive position in the existing industry where they outperform the competition by building a competitive advantage. With this approach an organization’s strategic options are circumscribed; they’re limited by the environment. Blue ocean strategists recognize that while market and industry conditions exist, they were created by organizations. And, just as organizations created those market and industry conditions, organizations can shape them and even create new industries and markets.
[13:41] – Like Rumelt, Chan and Mauborgne focus on execution. They don’t leave strategy at the theoretical level. They offer tried and true tools to help identify strategy, and these are tools that we have first-hand experience using in the context of learning businesses. Here we’ll touch on one we’ve used in our consulting work called the strategy canvas.
The strategy canvas serves two purposes:
The strategy canvas does all this in a simple picture. The example strategy canvas below looks at factors organizations typically compete on in the continuing education (CE) market (convenience, speaker, quality of content, price, etc.) and shows how one particular organization (the dotted blue line) diverges from the industry focus (the solid pink line).
The strategy canvas focuses you on the competitive factors in your market—i.e., the factors on which organizations tend to compete in order to win customers. Price is almost always a factor, and it certainly is a factor in the continuing education and professional development market. Other factors in that market include things like the reputation of the presenters or instructors, location, and amenities like food in the case of face-to-face events. It can include things like the availability of credit or the amount of access learners will get to the instructor or another expert for help.
The strategy canvas helps plot out the competitive factors by rating (from low to high) the level of emphasis that different competitors place on those factors and the level of emphasis that your organization places on them by comparison. This gives you a really useful visual of where things currently stand in the market, and, just as importantly, it starts giving you ideas for how you might change your approach to the market by increasing or reducing, maybe even eliminating, your emphasis on certain factors and possibly adding new factors that no one seems to be competing on at this point.
Blue Ocean Strategy offers more tools. In addition to the strategy canvas, we also really like the four actions framework and the six paths. See our break-down of the six paths in the context of a learning business.
Check out our related episode Blue Ocean Strategy for Your Learning Business.
[17:25] – Marketing is a perfect follow-on to our discussion of strategy because the two are intertwined. Strategy will help a learning business determine what to do in the market, and a deep and meaningful understanding of the market will influence strategy. We’ll start with being clear about what we mean by marketing.
The American Marketing Association definition states: “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” This definition makes it clear that marketing is broad—it’s not just advertising or other types of promotion—and it’s ongoing.
We also like its mention of value. Marketing is about identifying what a particular audience values, building products and services that provide some or all of that value, making the audience aware of the offerings, and then delivering the products and services—and thereby the value. And, of course, creating value is generally at the core of strategy.
In marketing classes and textbooks—the kind you might find in an MBA—the 4Ps of marketing are often covered: product, place, price, and promotion.
[19:38] – Product is most fundamentally about identifying and creating an offering that meets the needs of your audience and that will result in the outcomes you aim to achieve for your learners and as a business. In other words, the product P is about creating something that clearly delivers the desired learning outcomes, that people will buy, and that—as a result—will generate revenue for your learning business.
While product, as part of the marketing mix, addresses obvious areas like features and benefits and the quality level of the offering, it also includes less obvious elements like branding, how you name it and package it, what sort of services and levels of services you provide to support it, and any guarantees you plan to provide. Beyond that, the product P also includes making decisions about how and when to update and revise the product over time to meet market needs. But most people don’t tend to think of these areas as “marketing.”
With elements like features and benefits for a learning product, for example, it’s easy to think that these are purely the domain of the subject matter experts and instructional designers and developers. But we know that the biggest issue learning businesses face is that they create products and then no one buys them—and that’s because they have not applied the marketing perspective to the product. They haven’t gotten the kind of market insight they need to be confident that whatever they create will actually resonate with a fundamental desire or need in their target audience.
That brings us to the tool we’d like to offer to help with the product P: the Market Insight MatrixTM.
[21:28] – This is a tool we developed and have used with consulting clients. The matrix can help your organization manage a rigorous and practical market assessment process, through three stages and three types of activities, to identify learning products that will address market needs.
The three stages are idea generation, idea verification, and idea testing.
Idea generation: The higher the quality of the ideas you come up with initially, the easier and more effective the subsequent parts of the market assessment process will be. You want diverse input at this stage. Don’t rely only on the input of a small group or team. You also need input from staff and volunteers, important customers, and influencers in your market.
Idea verification: Many organizations effectively stop at the idea generation stage. They come up with a few good ideas, prioritize one or two of them—often based on the thinking of a small number of people in the organization—and then begin building a product. A better approach is to take the ideas generated in stage 1 and verify them by looking at what Web searches, customers’ and prospects’ discussions in social media, and surveys and polls can tell you.
Idea testing: To test the idea, put the concept—or even a version of the product—into the marketplace and see if you can get people to take action. Will they sign up for future notifications via a landing page? Can you pre-sell the product and thereby ensure purchases from the get-go?
The stages are one key part of the process. The next part is the types of activities you should engage in across these stages.
[23:20] – The three types of market assessment activities covered by the matrix are tracking, listening, and asking.
The matrix combines the three stages and the three activity types, with the goal of ensuring you have a process that generates diverse input and doesn’t rely too heavily on any one source.
[26:11] – The second P is place, and it addresses the question, “How will customers purchase and access the offering?” Place may get overlooked or undervalued because people aren’t intuitively sure what “place” means in the context of marketing, but, even when it’s clear that we’re talking about distribution, learning businesses don’t necessarily consider all the nuances and possibilities.
Deciding to distribute a course online, for example, is an example of addressing place. But you can go beyond that decision to consider whether the distribution will be only through your own learning management system and only through a single, standard interface or whether you will support distribution through branded sub-portals or even allow organizations to license the content for use on their own LMS. You can do the same thing with place-based offerings. For example, you might give organizations or subject matter experts the right to deliver one of your workshops internally. You can even consider franchising entire educational events or event models—similar to what TED has done with TEDx.
The main takeaway with place is that most organizations simply stick with tried and true channels for getting their products and services to market. But this is an area where pushing yourself to think a little outside the box can open up big opportunities. Probably the most basic one that applies to a majority of learning businesses is to think beyond selling to individual learners and develop approaches to institutional selling—that is, selling in bulk to corporate, government, and other organizational buyers of training and education.
Celisa Steele
Effectively executing on institutional selling can radically transform a learning business’ prospects.
[28:27] – We’ll add another interpretation of the place P in the context of a learning business, and that’s thinking about an offering’s place on your Value Ramp. This is another tool we’ve developed and used in our consulting work, and it has you think about where a particular product or service sits in relationship to your other offerings.
One key idea that underlies the Value Ramp is that there is a relationship between price and value when it comes to selling just about any product of service. Provide more value in the eyes of the potential purchaser, and you can and should charge more. (Note that “in the eyes of the potential purchaser” is critical.)
Another key idea behind the Value Ramp is that to get to a higher place and price, you need momentum. In today’s markets, a corollary to this point is that demonstrating value early and often is one of the surest ways to build significant value. More and more, this means providing significant value before you ever charge a dime—which is why content marketing is so important.
That’s why both a product’s place on your Value Ramp and where it’s available to your audience matters. Some significant portion of the value you offer needs to be free so that people who don’t know you can discover you and see the value you provide without hitting a barrier like a paywall.
See our related episode 8 Tips for Optimizing Your Value Ramp™.
[30:10] – That brings us to the third P, price. It’s one of the marketing Ps that does not tend to get ignored—pricing is a fact of life for learning businesses. If you’re marketing and selling learning products and services, then those come with a price tag. But what to put on the price tag can be tricky because a lot of organizations don’t know how to approach pricing.
We’re proponents of value-based pricing. That doesn’t mean that a learning business shouldn’t know the costs (both direct and indirect, hard and soft) that go into making and offering a learning product or service. Often organizations know the direct and hard costs, but many don’t have a good sense of indirect or soft costs, like staff time. Even if not precise, even if just an educated guess, having some sense of the staff time and effort required to create, manage, and deliver an offering is so important to understanding the financial performance of a learning product or service.
Understanding costs is important, but we don’t believe in cost-plus pricing—costs plus 20 percent, for example. We also don’t believe in pricing that’s pegged to your competition. And we don’t recommend trying to beat competition on price.
Definitely do your market research, but don’t settle for just matching competitor pricing. You want to beat competition by offering something better, something of higher value, or, better yet, something that’s different.
Jeff Cobb
Value-based pricing is the concept that the price you charge reflects the value that you believe—and that your prospect is reasonably going to believe—you’re going to create for them with the product or service that you’re offering. If you embrace value-based pricing, then it will begin to influence decisions you make about the features and quality of a product, the packaging and branding, how it will be distributed, what level of exclusivity will be associated with it, etc. All those factors drive value perception—and impact underlying costs. As a result, they directly impact your decisions about price.
Those decisions include asking and answering questions like these:
It’s important to stress just what a powerful lever price is. Price impacts perception—just assigning a higher price to a product and doing nothing else can raise its perceived value. And a lower price can suggest lower value. Price also has a big impact on revenue. Raising prices is more powerful than cutting costs or increasing sales volume when it comes to generating higher net revenue. The opposite is also true. It’s very difficult to make up for the net revenue losses that occur as the result of a price decrease.
[34:09] – In terms of a tool for pricing, we’ll mention that the Value Ramp can also be used here. You’ll want your Value Ramp to tell a logical story of increasing value and increasing price, so consider that when plotting your offerings.
Because we know how key pricing is for learning business, we have a lot of information about pricing learning products that can help you get thinking about your approach to pricing.
To learn more, check out the pricing resources below:
Also check out our related episode How to Price Educational Products – 10 Tips from 20 Years of Experience.
[34:47] – The final P is promotion. This is the P that most people equate with marketing, which may be why a lot of learning business professionals say they don’t like marketing—they don’t like the idea of promoting or selling, even if they appreciate how important they are. It’s also likely that many learning business professionals don’t appreciate the full range of possibilities for promotion.
It’s easy to think of promotion as overtly selling, whether that means advertising or sending an e-mail campaign that pitches a specific offering. Those are part of promotion—and they are often very important parts—but a lot of what goes into promotion these days is much more subtle. There’s the concept of a promotional mix, and that’s going to include not just things like advertising, brochures, and mailings, but also content marketing, search engine marketing, and social media marketing, just to name a few of the possibilities.
Those suggest some skills for learning business MBA students to dig into: SEO (search engine optimization), copywriting, and the use of social media for conversion.
To learn more about the 4Ps, listen to our related episode The 4 Ps of Marketing Your Learning Business.
[36:07] – The tool we’re offering to help you with the promotion P is the AIDA formula. AIDA is an acronym:
Those are the four stages that prospective customers move through in a typical buying process—from initial awareness to some interest to the desire to do something to making an actual purchase. The goal of anyone promoting a product or service is to help prospects move through these stages so that they will be converted and buy or register for the course or turn over their e-mail to get that resource.
AIDA reminds us that no matter how much we want a customer or prospect to take action, to click the Buy button, we first have to get their attention—and getting their attention is no small matter. Then we have to create an interest in what we’re offering. Then we have to take that interest and get them to desire, and then and only then might they take action.
To learn more about AIDA, listen to our related episode The 4-Part Formula for Selling Education.
[37:56] – Wrap-up
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Other Episodes in This Series:
Episodes on Related Topics:
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