Are you an eLearning expert with an excellent idea for a new initiative or online education program? Do you see an opportunity for your association or organization to get ahead of the curve and leverage its collective expertise to become an industry expert? If you’ve identified an eLearning opportunity and developed a grand vision to capitalize on it, you’re probably thinking about how to approach your executive director or board of directors to get the funding you need. Talking eLearning ROI shouldn’t be an intimidating process. If you believe in your plan, it’s because you know it can work. Here are 10 steps you can follow to prove the worth of your idea and get an initiative approved.
1. Admit What You Don’t Know (Find a Bookkeeper Friend)
When you need to secure an investment from an executive director or a board of directors for a big picture eLearning initiative, you need to have the numbers to back up your creative vision. You need to be able to speak to the language of seasoned MBAs and CPAs. For us so-called “right-brained” creatives working in the world of instructional design and eLearning, that isn’t always easy to do. Admit what you don’t know, and seek out a “left-brained” numbers person to help you organize and present the nitty gritties of the business plan. If you want to sell eLearning ROI for your grand vision, you need to support your pitch with sensible projections and multi-year estimates to put the financial decision makers at ease.
2. Perform a SWOT Analysis
It’s a good idea to start by analyzing your Strengths, your Weaknesses, the Opportunities available to you, and the Threats you face when mapping out a large eLearning initiative. This SWOT analysis will help you to determine a realistic market position and provide you with a baseline for developing concrete objectives and strategic actions.
The basic idea with a SWOT is to gather key stakeholders and staff members with diverse functions and responsibilities within the organization to identify and map out the relationship between internal strengths and weaknesses (physical resources, finances, operational processes, reputation and goodwill, etc.) and external opportunities and threats (industry trends, economic factors, changes in customer demographics, competition, relevant regulation/ legislation, etc.).
The strengths and opportunities you identify become the basis for your strategic objectives, while the weaknesses and threats add urgency to your ultimate call to action. Remember, it’s not enough to come away with a list of strategic objectives. You need objectives that give rise to strategic actions.
It may be helpful to think in terms of “strategic strings.” This concept comes from Shawn Casemore, who has worked with association boards and nonprofits to provide strategic formulation and coaching. In his article on strategic planning for The Center for Association Leadership (ASAE/ATD), he writes:
Have you ever been through a strategy session, identified your top three or four strategic focus areas, and then thought, Geez, how are we ever going to make actions out of these? You’re not alone. When I help associations formulate their strategy, we create what I call “strategic strings.” These are the fundamental connections between the strategic objectives and the strategic actions required to deliver on the objectives. For example, consider the strategic objective of “increase member retention.” I have witnessed associations attempt to take this objective and begin immediately to craft actions. What we need to do instead is develop a strategic connection between this very high-level objective and the specific actions that will deliver it. For example, “increase member retention” might have three strategic strings: – Benchmark member retention programs. – Assess value in existing membership programs. – Develop a membership recognition and rewards campaign. You will notice that it is much easier to transition into action planning from this point than it is the previous strategic objective. More important, you will find a more robust program in place to achieve the objective itself.
3. Perform a Market Analysis
The next step is to perform a market analysis. You need to understand the size of the market, relevant trends, growth potential opportunities, market needs, target market groups, and the strategies of competitors.
Use member surveys and marketing data to identify key needs in the target market and drive decisions based on market demand, rather than solely by board or staff agendas. If you find that members are seeking on-demand professional development training and continuing education credits to maintain professional licenses and certifications, a carefully thought out eLearning initiative can meet that demand and help you penetrate the market. Take stock of the competition to get an idea of how rival associations deliver learning and training to members.
Gather as much information as you can so you can make informed decisions on how to build your eLearning business plan. A good market analysis helps you avoid making bad assumptions.
4. Determine Your Product Value and Pricing Model
When you decide it’s time to invest in eLearning, you need to figure out how much to charge. The pricing issue comes down to understanding how much your offerings are worth members, and choosing a pricing model to reflect that value.
Unique content justifies premium pricing. Generic content is less marketable and may require off-the-shelf pricing. Anything in-between may be a fit for a subscription-based model in which members pay a base fee for access of all of your content. You can also be creative with packaging your products. If you record live events and repackage them as webinars, consider creating mini-MOOC courses to market as “loss leaders” for your broader eLearning initiative or certification program.
The next step is to evaluate what competitors are doing in the industry. What products are in demand? What price points drive purchases? Where can you offer better value than a competitor?
When Jeff Cobb of Tagoras analyzed the association eLearning market in 2010, he found that the average price per eLearning content hour in the association sector was $56.79, and the average price per credit hour was $73.97. Those numbers represent a decent starting point, but you need to do your own competitive analysis and run through some volume and pricing scenarios.
5. Project Price Points for eLearning Products
Once you’ve performed your competitive analysis and identified your target market, it’s time to crunch some numbers. Some guesswork is involved here, as you can play around with the sales volume, product pricing, and profit margin to come up with all sorts of scenarios to present to the board.
The cost to produce and deliver a product includes development costs (internal and external costs, subject matter experts, etc.), administrative costs (hardware, software, support, etc.), delivery costs (LMS licensing, e-commerce costs, etc.), and marketing costs. Check out this Epic whitepaper for a nice primer on categories of costs to consider.
Determining the cost of developing training can be a tricky. Karl M. Kapp and Robyn A Defelice provide detailed analysis of how much time it takes to develop one hour of training in this article for the Association for Talent Development (ATD). But even they admit that “[d]esigning training is as much of an art as it is a science,” and “in the current marketplace, the pressure is on to meet or exceed standards in terms of instructional development.”
Settle on realistic cost estimates before you start playing around with markups and price points. Use your market analysis numbers to estimate demand from members and non-members, and then use your cost estimates to develop viable price points to generate profit.
This downloadable interactive eLearning ROI Excel worksheet for associations from Knowledge Direct (a competitor of ours) is a place to start when developing your multi-year projections.
6. Create a Multi-Year Projection for the Initiative
The SWOT analysis, business objectives, strategies, market analysis , and price projections must then be converted into a multi-year financial projection for your eLearning initiative. Find a past project that succeeded and use it as a launching point.
- Review an existing program to get a starting point
- Ask for an example of a similar proposal
- Make sure you understand how the association budget works (ask the executive director, if necessary)
- When can money be borrowed from the reserves?
- Is it possible to get a grant from your association’s foundation?
In your projections, be prepared to lose money in the first year (you’re making a long-term investment). Identify the break-even date for the initiative, and include graphs and charts that summarize the growth of revenue and net operating income as the plan matures in later years. Show how it pays to capitalize on the opportunity you’ve spotted.
7. Develop an Elevator Pitch for Your Board
It’s not enough to analyze the market, crunch the numbers, and identify growth opportunities for your association in the eLearning space. You need to develop your elevator pitch – a concise, jargon-free presentation that distills your grand plan into a short speech with a hook designed to spark interest and inspire action from key stakeholders.
You’re no different than a contestant on Shark Tank. There are precious few minutes you will have to get in front of your investors and convince them to green light your project. Don’t get bogged down in byzantine numbers or dry details; hook your “sharks” by explaining the grand vision of how you can leverage the association’s expertise to capitalize on a golden opportunity.
Believe in your plan. Don’t be afraid to “blue-sky” your estimates in this part of the pitch. Don’t let the unknown unknowns paralyze you; believe that the bold actions identified in your plan will lead to bright opportunities. You’re here to explain how you’ve found the perfect prospect for your association. Put your plan in the spotlight.
8. Create a Companion Slideshow and Project Plan Document
You can only carry the Shark Tank metaphor so far. Don’t alternate words with your co-presenter or bring your children or pets along to the pitch to spice things up. Add some visual flair with a slideshow that covers the main points of your pitch, and bring along a full business plan document to give to board members. Don’t use these elements as a crutch during your presentation. Use them to answer questions and keep the pitch focused on generating buy-in from the board.
9. Identify Board Member Perspectives
Remember that you are trying to build consensus and agreement among a diverse set of board members. This means that you need to identify the key swing votes and tailor your message to get those people on board with your project. Do some research and find out how previous projects made it through this process. In an ASAE article titled When Good Project Pitches go Bad, Tate Linden provides some basic truths that you need to keep in mind when crafting your pitch:
First, few people in decision-making roles enjoy being told what to think. And in a membership organization, every member has such a role. If you’ve got the best idea in the world and you tell people that it is, in fact, the best idea in the world, the instinct for many will be to look for reasons why the idea isn’t so great after all. When you’re building consensus, an intelligent question is infinitely more valuable than a brilliant statement. If you want to bring minds together, I find that gentle, facilitative leading works better than vigorous prodding. Ask. Suggest. Consider. These are the methods that can lead us to consensus decisions worth making. It’s important to remember Newton’s Third Law of Motion: Every action has an equal and opposite reaction. If you push a group decision vigorously, the natural reaction is what Newton predicts: to push back. This can mean failing to reach consensus or ensuring that no one in the group gets exactly what they want, so that everyone is equally displeased.
10. Lobby Influencers Ahead of Time
Finally, lay the groundwork for success ahead of time by approaching key board members and providing them with information and opportunities to provide input at the early stages of your plan — assuming that your supervisor has given you permission to speak directly to board members, of course. This open line of communication offers influencers a legitimate stake in the project from the beginning, so they become invested in getting the initiative approved. Transparency builds trust, and collaboration builds consensus.