How to Sell EdTech Products as a Must-Have, not as a Goodie
Changing the Perception of B2B Learning Solutions
There is one pattern I see quite often in B2B EdTech start ups:
Their products are perceived as goodies for employees. And that is a problem.
Nothing wrong with goodies, but think about what kind of role a learning solution takes within a company then: They are not purchased for the actual learning outcomes, but to satisfy the staff’s demand for personal development.
The consequence: Learning effectively becomes a tool for employee retention.
Sure, retaining employees is important. Yet, that places an educational offer into just the same category as
fancy team events
free yoga classes
and that barista that comes to the office once a week.
All of which are nice to have, but ultimately share the same fate: They will be the first casualties of budget cuts, as soon as things don’t look rosy anymore.
Whether that positioning is intentional or not; it does tremendous harm to any commercial aspirations a venture may have. Hence, EdTechs need to actively work against being understood merely as a perk.
Instead, when addressing corporates, we should frame learning much more as a tool to enhance employee performance and impact concrete financial metrics.
And EdTech indeed has significant potential to do that. In this article, we will explore what it takes to demonstrate that clearly to a customer.
Connecting Learning to a Financial Metric
In every company there are tons of KPIs on which learning can potentially have an impact.
But in the end every KPI is a proxy of either of these two:
reducing the company’s costs
or increasing the company’s revenue
Whether we enhance conversions of a sales rep or shipping rates of a product team: it only matters because ultimately it impacts either costs or revenue.
Consequently, that is also the key thing that matters in a purchase decision for a learning solution. A buyer has to be genuinely convinced that it moves either of these two needles.
So, can EdTechs have a relevant impact on a company’s costs or revenue?
Well, it almost seems too obvious to even argue for it — like you don’t argue for the impact of water on plant growth. Of course smarter people will generate higher financial value for their employers.
But the key is: Can we make a convincing connection between our educational offering and a relevant financial metric?
We need to demonstrate credibly that whatever we are teaching, either reduces costs or increases revenue. Then we have an excellent B2B sales case. And that’s not just an abstract idea. Check out these examples:
They all share that their offering can be related to a relevant financial metric over just a few intermediary factors. Let’s see how we can get there too.
Understanding the Mode of Value Creation
To think through, how a product benefits a customer is probably the most generic piece of consultant advice out there. But it exists for a reason. What the illustration above does, is nothing more than that:
It establishes a connection between a learning topic and a specific customer metric over just a few proxies.
The importance of deeply grasping this connection, can barely be overstated. For two reasons:
It’s a north star for product development; it ensures that we build new features with the (financial) benefit for the customer in mind
and it focusses communication in marketing and sales on what is truly relevant to a user
If we can establish that connection between our product and a specific metric in the minds of a prospect, it can upgrade us from the nice-to-have to the must-have category.
Some Guiding Questions
To identify that metric for our product we can start by thinking about the learning topic and the role of the learners that are addressed in their organisations:
What processes does learning with our product enhance? And how does that affect the performance and efficiency of the learners in their jobs?
What is the business outcome of that? Does it save time, increase quality, mitigate risks…
How is that outcome reflected in KPIs or even concrete financial metrics? Does it impact costs or revenue?
That way we start with the actual product functionalities and step by step derive their connection to the customer impact.
Want to do some sparring on the topic for your venture?
Often asking these questions will result in a whole bunch of topics and metrics, on which we may have at least some influence.
We will need to narrow that down, by finding out
which of them are actually the most relevant to our customers
and where we can really have a significant impact (also relative to our competitors).
Interviewing customers obviously helps a lot with that, but don’t stop there: That is the duty, not yet the artistry.
Quantifying the Impact on a Client’s Business
Once we identify a clear connection between our product and a relevant financial metric, we need to find a way to communicate this value effectively.
In most cases, the challenge won’t be to explain logically, how a certain functionality influences a KPI. If we have a decent product, some prospects will probably buy into that.
But to really make it a successful and repeatable sales case we need to be able
to tell by how much our product can influence that metric
and to deliver some proof on that claim.
This requires that we find a smart way to measure and demonstrate our effect on a customer’s business. We need to have credible data and insights from real users that clearly verify our claim.
That is not exactly a shiny topic, but I believe an utterly important one. That’s why I’ll dive into that in the upcoming articles.
Closing Remarks
As we've explored, we need to transform the perception of EdTech products from being a nice-to-have to being a necessity. I know I am repeating myself, but upskilling isn’t a perk. And if it is — it is the first thing to be kicked out when things go sideways.
EdTech products shouldn’t be sold (and built in the first place) as mere wellbeing and employee retention tools. Instead, we should build corporate learning solutions as tools to enhance the financial performance of our customers.
Only then we get the chance to make an impact on work-related learning on a large scale.