Free training: why time, not money is the currency training providers should trade in

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Challenging market conditions for training providers have prompted many to consider offering free places on courses or discounts as an incentive, but this is usually a big mistake. Here's why...

Training providers are having a tough time in today's unpredictable economic climate. Corporations cut training the moment the downturn began in 2008, and the market is still recovering ten years later.

Training is a lot like car maintenance; in the short term you can skip a few services, but after a while, the wear and tear starts to take its toll.

In a business, productivity and engagement decline as investment in people falls behind, and training is still seen by many business owners and managers as a luxury they can’t afford.

None of this helps the many businesses and self employed consultants who provide training. Those who specialised in niches such as financial services lost their entire client base overnight in 2008, others with a more diverse portfolio were luckier. I’ve been self employed since 2002, and the journey has certainly not always been a smooth one – sometimes it’s been an absolute struggle.

I suspect that all learning and development professionals know the value of investing in people development, just as all garage mechanics know the value of having your car serviced before it breaks down - but has the way that we create value in learning changed as a result of the economic roller-coaster of the past few years?

Cutting costs

In a declining market, consumers put price pressure on suppliers. Of course, we do have less disposable income, or at least we’re afraid that we might not have as much in the future, so we automatically cut back on luxuries, a trend exploited by the rapid growth of the budget supermarkets Aldi and Lidl and the loss of middle market retailers such as BHS.

Suppliers at the top of the market can ride out the storm, those at the bottom can cut costs, and those in the middle suffer the most. The temptation for everyone is to cut prices, because any cashflow is better than none.

From a training provider’s point of view, there is a fundamental difference between an open course and an in-house course. With an in-house course, everything runs on demand, and there are next to no overhead costs.

However, anyone who wants to run open courses faces the catch-22 problem, they don’t want to commit until they have delegates, and their delegates don’t want to commit until the trainer is committed. No-one ever booked themselves onto a course that might be running.

The free option

One solution for the open courses is to offer ‘free’ places as incentives or in competitions. A prize draw in return for contact details allows the course provider to offer discounted or full price places to the entrants who didn’t win, and ideally has at least one delegate to start the ball rolling.

Herein lies a very peculiar problem – people are winning free course places, and not collecting their prizes. Why is this? Why wouldn’t someone want free training?

Simply, because it’s not free. Firstly, the delegate has their own overheads; travel, accommodation, time off work and so on. Secondly, the delegate still has to commit something far more valuable than money – their time.

If someone doesn’t like your service, you can give them their money back, but you can’t give them back their time, so the risk is entirely on them. So what if the course was free? If it’s rubbish, that time is wasted and can never be recovered.

A question of price

You don’t have to look far on social media networks to find sales experts telling you the secrets to sales, but these are product sales concepts, and service sales is fundamentally different.

For a self employed trainer, the cost of delivering a day’s training is very low compared to a training company with offices, administrators, course designers, IT systems and so on.

Therefore a self-employed trainer can always price their service lower than a training company with all of these overheads, however a large part of the customer’s perception of value comes from the price itself.

When we reduce the price, we also reduce the perceived value. Economics theory says that we should increase our prices in a recession, but our human fear of losing our livelihoods makes us cut our prices. That doesn’t just affect the discounting supplier, it affects everyone because it skews the market price of the service.

When we reduce the price, we also reduce the perceived value.

Retailers such as eBay, Amazon and Argos have skewed customer service expectations in the same way. We don’t just expect rock-bottom prices, no-question returns and instant delivery from them, we expect such service levels from everyone, from all suppliers.

Consumer expectations feed through into business-to-business interactions too. Corporate buyers expect sky-high service at rock-bottom prices, and they want it yesterday, because they know that, somewhere out there, there’s a supplier willing to give them that.

We all know that we should stand together and protect each other from this price erosion, but at the end of the day we have mortgages to pay and little ones to feed, and no-one will take that risk.

Tasters and discounts

One of things I’m currently experimenting with is running free taster sessions at home. This removes the risk of paying for a venue, and means that I don’t have to charge participants.

I planned four hour sessions and tested the idea via social media, and the reaction surprised me. The general consensus was that I was being way to generous, and I should give one hour, maximum.

Is there only so much that we can give for ‘free’ before we arouse suspicion? Can we give a tiny morsel, a small discount voucher? Perhaps if we give a free training place it’s too much of an imbalance?

I’ve been running competitions at conferences and events, and so far I’ve given away five ‘free’ places, which aren’t really free of course but greatly discounted so I still cover the actual costs involved.

What’s really interesting is that I have offered far more ‘free’ places to winners, most of whom I haven’t heard back from at all. Why would you go out of your way to enter a competition when you weren’t interested in the prize?

Maybe some people will enter anything. Maybe the barrier to entry was too low, all they had to do was write down an email address. Maybe they all changed their minds. Maybe they simply didn’t value something that was ‘free’.

Time constraints

I think that the training market, in the UK at least, is probably still in over-supply, and new learning technologies have pushed down delivery costs and price expectations.

Why attend a training course when I can watch a free video? I’m sure it will be just as good.

Money can be refunded, though. Time cannot.

Whilst we can be up in arms at this affront to the value of a face to face training session, we’ve also all sat through training sessions that were so bad that a video really would have been better.

When we get bad service from one car mechanic, we expect them all to be untrustworthy. Money can be refunded, though. Time cannot.

Time is the currency that we must trade in. Solutions such as e-learning and ‘bite-sized’ training  are one way of reducing the time cost, what we must also do is increase the time value of what we deliver. How? I’d tell you... if I only had time.

Interested in this topic? Read The five big problems with ‘free’ content.

About Peter Freeth

Peter Freeth Author, Coach, Talent Expert

Author of 
✔ Coaching Excellence
✔ Genius at Work 
✔ Change Magic 
✔ Learning Changes
✔ Plain Selling
✔ The Unsticker
✔ NLP in Business 
✔ The NLP Practitioner Manual 
✔ The NLP Master Practitioner Manual 
✔ The NLP Trainer Training Manual
✔ NLP Skills for Learning 
✔ Six Questions 

I'm an expert in 'modelling' high performers; figuring out the hidden secrets of your highest performers and turning that insight into leadership, management and sales development programs that are perfectly aligned with your culture and business strategy.

My innovative approach has led to:

■ 700% increase in profitability for a leading global engineering company
■ 25% reduction in graduate development time and cost for a High Street retailer
■ 200% increase in sales conversion rates for a contact centre operator

I've written a book about this approach - Genius at Work - which you can find or order in all good book shops, and over the 12 years that I've been doing this, I've built up a library of what makes the highest performers across the world in different industries and cultures, containing the secrets of the very best:

■ Sales people
■ Managers
■ Problem solvers
■ Creatives
■ Mediators
■ Presenters
■ ...and many more!

On top of that, I have 13 years L&D experience across all market sectors and organisational levels; leadership and management development, coaching, NLP, sales, business strategy, and another 20 years corporate experience in technology and sales.

I've also written countless feature articles and many more books which I've ghost written for other people which have been very well received by the likes of the Daily Telegraph, CNBC, the Daily Mail, Dragon's Den's investors, Elite Business Magazine, Real Business and the Financial Times. While I can't tell you which books I've ghost written, my total number of books authored is over 20.

Replies

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24th Jun 2016 13:14

I am also a training provider and agree with this idea of not been able to give free courses away. Recently I created a online speed reading course and offered 50 free courses. For the simple reason to get feedback and see how I may improve so as to give further value to students in the future. The result astounded me. After weeks of "trying" to give them away, only 18 people took me up on the offer. Out of those 18, only 3 actually did the training.
I believe when people don't pay for something, they often don't appreciate it as they don't see the value in it.
Interestingly I have just created a FREE introduction to NLP and coaching training to add to my website at www.coachingwithnlp.co , in the hope that it will help people to make up their mind if we are the right provider for them.
Let's see hey.

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to waynefarr
03rd Aug 2016 13:44

Interesting metrics. As with any marketing method, the important thing is the cost per customer, so what you've demonstrated is that you need 17 offered free courses for every 1 customer. When you know that, you can then find the most efficient way to target those 17.

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27th Jun 2016 12:22

I'm only partly sold by this argument. True, 'free' training is never always free - there's always a catch even if it is the car parking ticket. I made a conscious decision not to run free training events as a view to buy-in customers as anyone who wants an expert-level course already knows what they are planning to buy.

When its the case that your customer knows what they want the question is more around your credibility against their normal supplier. As we strongly promote the quality of our courses as set by the fact that we use official courseware, expert trainers (with experience and who have passed the relevant exams, also are registered to deliver the material), our quality rate is high. For excellent service you expect to pay for an excellent product, however as our team are small we have lower overheads and can do some things such as on-site training which are competitors are not in a position to offer.

So perhaps the argument should be more about why you should buy training that it not free. Rather than keep up with the latest new trends we as IT professionals should focus on getting our exams done and remaining compliant. After all, knowing how to do something properly keep us in a job.

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to MBITTraining
03rd Aug 2016 13:47

Qualifications, licensing, official courseware, accreditations and so on are all ways to imply credibility, to lower the barrier to a customer parting with money for something they have never bought before. You're right, the incumbent supplier has an advantage in this regard. Any decision we make is a compromise and a balance. By loading one side of the decision with implied credibility, we increase the cost that the customer will pay at a given level of perceived risk.

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08th Jul 2016 07:57

This article really resonated with me and I'm noticing I am being asked to deliver more micro learning than ever before. I agree that 'free' training is not really valued but weirdly it's often expected. For example, I recently lost a pitch for a leadership programme because a competitor offered the coaching element of the programme for 'free'. I couldn't help but wonder about the quality of any coaching give for free. I later heard that the programme had not been as successful as the client hoped, but there was no schadenfreude here- it's a situation that does everyone a disservice. Thanks so much for sharing this, it has helped me think yet more reply about how to offer real value to clients.

Thanks (1)
to lesleyceruleanblu
03rd Aug 2016 13:49

I'm please to hear that. Micro-learning, bite-sized learning are ways to reduce the risk of the time investment which is the bit the client can't get back. I agree that the cost of the coaching must have been 'hidden' somewhere, and if there's no direct value for the supplier, how much are they going to really invest in delivery?

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03rd Aug 2016 11:45

I used to deliver leadership / Lean 6 Sigma training for a company (internally) and whenever we had spare places, I'd offer them free of charge to other organisations within our industry. I was in paper manufacturing and the training landscape there is shockingly bad, so anything to 'give back' to the community was (in my mind at least) a good idea. Not one taker. a 8 day FREE leadership / Lean 6 Sigma course and nothing...

I know time is currency but even with that perspective, some things are worth a bit of investment surely?

Thanks (1)
to janehodgson
03rd Aug 2016 13:51

A really great example of two points, firstly that when there is no cost, time becomes the deciding factor and secondly that with no cost, there can be no value.

I wonder if there would be a way to express a cost for the course in terms other than money? For example, the cost of the course is 8 days of your time and your commitment to the process.

When we make a decision, we weigh up the cost and the return. With no financial cost, the return balances out, and then the time investment becomes a penalty rather than a price to pay.

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