Over the last five years, we’ve spoken to thousands of training companies around the world, large and small, and we’re privileged to serve hundreds of training companies as customers, many of whom are small businesses. We define the SMB segment for training companies as any operation that has less than £4 million ($5 million) in revenue per year, and there is an incredible amount and variety of training delivered by companies operating within this market segment!
Our mission here at Administrate is customer success, and we’ve tried to orient everything we do within the organisation to serve this goal, including tying the bulk of the cost of Administrate to learners. This means we’re incentivised to help your training company grow - when you grow, so do we! This also means we’re very interested in learning about, discovering, and sharing best practices with our customer base.
We thought we’d share our observations of common mistakes we see that are especially prevalent within smaller training companies, and we’re breaking this series down into four parts focused on: Strategy, Marketing, Sales, and Operations.
Lack of Efficiency Caused by a Lack of Automation
Training companies are by nature very admin heavy. It’s a 'high touch' business that involves the coordination of lots of different resources, people, places, customers, and a whole lot more. One of the main operational mistakes we commonly see within the training industry is a reluctance to focus on efficiency. One of the main drivers behind this is a belief that training is inherently admin heavy and somewhat inefficient. Another factor is because training is often a very transactional business - admin costs tend to linearly scale with training revenues. In other words, as training business increases, revenues increase to the point where administrative work can be financially covered. Training companies therefore don’t always need to become more efficient to maintain their margins. So they don’t.
The third and probably most prevalent reason why efficiency isn’t higher on the list for most training providers is that gains in efficiency tend to require technology investment, and until recently training management and administrate systems weren’t as well known within the industry. Here at Administrate, we of course are biased in our belief that investment in a high-quality training management system will save you time, increase efficiency, and help you scale your revenues without a corresponding increase in costs. But we’re also amassing a huge body of evidence in the form of our customers who have managed to build incredible businesses that deliver education all over the world and have done so by baking efficiency into their tech choices, leaving their team to focus on higher value work.
A well-functioning training management system should save at least 50% of the time your administrative team was investing into operational matters previously, and also help you scale your business without needing to invest in more people.
Poor Pre-Course Communications
One of the hardest things to get right operationally is pre-course communications. Particularly when running lots of courses, students are being added sometimes right up to the cut-off, and admin teams need to provide enough detail at the right times to ensure students are prepared, but don’t usually have the time to send as much communication as they’d like or ideally need to.
Here’s four keys to making sure you achieve pre-course communication success:
- Send early, send often. We recommend at least three communications to students: upon registration, a few days prior to the course commencing, and the day before.
- Automate them. We suggest automating your pre-course communications so you don’t have to think about them. Use a training management system to build out templates and have the system fill in relevant details and handle the automated delivery according to a schedule.
- Email and SMS. Don’t just use email! Emails can get be missed and depending on what area of the world you’re operating in, may not be commonly used for communications. Instead, we recommend using a mix of email and SMS notifications for communications. You’ll be amazed at how high your deliverability rates are for SMS compared to email. Your training management system should help you see at a glance the deliverability of all communications to students in addition to managing delivery.
- Include calendar attachments. When sending communications about a course, make sure you include an iCal attachment so the student can quickly and easily add all the relevant details into their own calendar. A good training management system should craft these attachments automatically, and update them if any course details change, also automatically!
Poor Visibility of Unit Economics
Unit Economics is the measurement of what it costs to acquire a unit of business vs. the lifetime value that can be generated from that unit. At it’s simplest form, this relationship is the building block for all business.
For a training business, the typical unit we’re looking at is a student (although, if you’re doing more private or in-house training, it would be your customer, who may have many students).
For a typical training company, your unit economics would involve:
- Marketing and Sales costs related to acquiring that student. This includes costs such as PPC marketing, but also includes costs around marketing and/or sales salaries.
- Per unit costs that are directly attributed to delivering the course to a student (for instance royalties to content providers, resource costs, etc.).
- Revenues generated from that student.
Once you have your per-unit revenues and costs, keep an eye on the ratio, and you can tell whether you have a business that is going places or not. The problem we see is most operators don’t keep a close eye on these costs because they don’t have a system to help them track, manage, and report on these items. They’re therefore trapped into waiting until financials accounts are prepared at the end of the month (or worse, end of the quarter) instead of being on the front foot!
No Root Cause Analysis
Busy operations tend to be short on time, and this can be a killer when trying to aim for continuous improvement. When problems happen, we tend to see overworked teams accepting the first answer that is offered as to why something happened. Except, that first answer is often wrong or incomplete, and can lead to bad patterns creeping into your training operation.
- Customer cancels or complains.
- Bad evaluation results for a course.
- Confusion around what’s being offered vs. what was expected.
For any of these three scenarios there will be a first answer offered as to why this problem occurred. Challenge your team to dig deeper and keep asking “why?” as they work through and think about the problem. This is a problem solving technique invented and popularised by Toyota known as The 5 Whys and is a powerful way to get to the root of issues. That said, it requires time to be able to devote to thinking through these issues, often as a team, so it’s up to you to make sure your team has enough time to go through these exercises. There are plenty of other techniques that be employed too, the key thing is freeing up the time, not the methodology you use.
The training operations that do a true root cause analysis of problems outperform those that don’t over time.
Ignoring Instructor Evaluations
Post-course evaluations have been around forever, but how closely do you look at the evaluations you’re sending out? Based on our experience and discussions with leaders, the answer can vary from “quite a bit” to “almost never”. We strongly believe that training operations need to pay close attention to all elements of a post-course survey, but in particular, to instructor evaluations. Why? Because quality instructors are the single most important ingredient for a training organisation. This has always been true of course, but as your organisation grows, becomes more complex, and delivers more training than ever, how do you keep tabs on this key piece?
Monitoring instructor evaluations is how to scale your 'gut feel' on how your instructors are performing. We recommend running reports on the following:
- Direct evaluation of the instructor provided by students.
- Efficacy of instructors as measured by the achievement of their students.
- Repeat business rate for students, by instructor.
- NPS of students, by instructor.
In addition to these metrics, we suggest running these results and controlling for the overall hours and courses an instructor has worked for you. This prevents a common statistical mistake where you don’t have a large enough sample size and the results are skewed for those instructors who don’t work very many hours.
These reports should be available at your fingertips. If you’re curious as to how to get at this data, our Account Management team is standing by to help you if you’re already an Administrate customer, and if not, our Sales team would love to show you how our powerful reporting engine makes this kind of reporting a synch.
Failing to View Operational Excellence as a Differentiator
We’ve noticed that those organisations who treat their Operations team as a differentiator tend to have a significant leg up on the competition. They have more efficient systems, are more attuned to the challenges they’re facing, they can command higher prices, and they tend to have a higher fill rate on training courses they run. This isn’t an accident. Investing in and honing the operational side of your business will pay off over and over again, particularly when you find yourself in a growth scenario.
Perhaps take a step back and ask yourself:
- Is my operation running well? How do I know?
- Can I truly scale my business (i.e. can I add 30% more students or courses without adding any additional operational staff)?
- Is my operation team consistently overwhelmed? If so, why?
- Can I rely on my operations team 100% of the time to handle day-to-day fundamentals within my training business? If not, why?
The good news is that addressing operational challenges has never been easier - perhaps it’s time to look at a training management solution to help you focus on the reason you entered the training industry in the first place - educating students!
Download the Whole 'Common Mistakes' Series Now!
Why not download the whole 'Common Mistakes We See Small(er) Training Companies Making' with our new eBook! All the posts in one place, so you have a handy reference with how to avoid those strategy, marketing, sales, and operational mistakes!