Learning System Mkt. Forecasts

I’d love to tell you that the forecasts below are all happy stardust and puppies, but the fact is, well they are not.  A few have the potential to switch from a negative to positive, others well, it comes down to a variety of variables, now that we are all in this together (the Pandemic).   I am confident that there will be people out there in the net screaming “Obvious” or some other spin, but trust me, when I say, that with the exception of two forecasts, the rest of them are based on trend lines, which started at the beginning of this year.

Forecast 1 – Pricing

In looking over the past 10 years of pricing data (that I have been tracking) when it comes to learning systems, there is a repetitive variable, ok,, variables at play.

• Pricing per year (i.e. per seat, per user, = per year),  drops when there is a recession.  It was widely seen during the financial crisis, with lower than usual pricing from 2010 to 2012.  The same trend line started to appear in mid-Jan. and I expect it will continue through the rest of 2020.

This line not only is continuing, but you can expect to see a lot more vendors reducing their price per seat/per year in the coming months.   There are always vendors who follow the Blue Ocean strategy, but with that strategy, while client numbers are boosted, total sales do not reflect that, in other words, the pricing drops so much, that sales numbers are not as high as they should/could be.

You are unlikely to see this in the setup fee (if a vendor charges), rather it will come in the form of seat pricing.  Do not be fooled by vendors who say $3 per user, per month, because when you add this as 12 mths at 3 per user, the cost is actually $36 per user, which is not cheap, especially at 2,500 or 3,000 users.

Another area you will see over this time frame, are extras that a vendor (okay most), normally charged for, but are now including at no charge.  Common ones are custom domain, SSO, APIs, and support.   This happened during the financial crisis and is starting to appear once again.

Again, some folks will say that pricing is obviously going to drop because of the Pandemic, but I disagree.  In fact, folks may assume that it will go up, because more employees (end users) are working from home. 

Even at the education and higher education level, pricing will drop. And if there was any audience that you would think would be seeing higher numbers of sales as a result, it would be in K-12 and higher education-specific systems.  

Forecast 2 – Usage of the Learning System

This will come down to the vertical that the company is in and employee type (hourly, seasonal, full-time, white-collar and blue-collar)  Many folks will say, this sounds like waffling or sitting on the fence. I respectfully disagree.

Last week in the U.S. alone, over two (2) million people filed for unemployment.  Sectors hit the hardest were retail and hospitality.  If you are a company in that vertical and your system is for the retail locations or hospitality operations, whereas most of your workforce is hourly, then clearly, usage drops.   If you offered the system to both the hourly workforce and full-time workforce (in the office for example), the usage again will be lower, if it is based on a number of users.

But, if your metric is based on usage per end-user, rather than just calculating the total number of end-users, the trend is pointing towards higher usage per end-user than you saw before, due to remote working.  However, this will be tied directly to the content that you are offering.

It has to be engaging, and if you can interactive.  If you are a person who is just pushing out compliance and regulatory, then I can tell you, the usage over the period of months will be poor and will follow the likely line you saw pre-pandemic.

The type of system will play a bit of a role here. Usage numbers will increase with any system that includes a content marketplace, as long as the content goes beyond just leadership development and is easy to find and use – i.e. filters, types of content.

 Data has shown that most people access a system out of the workplace, often at night.   I am forecasting that will change due to the pandemic, with folks accessing at different times of the day and even weekends.  But, it comes down to the content.

Forecast #3 – ILT is replaced with Digital Coaching

I’m sorry to inform all the ILT fans out there, but ILT is no longer available at this time (it will return before the end of the year).  Thus it has to be replaced with something else.

    A – Webinars will boost up.  This makes absolute sense, especially with Zoom as the more than likely solution compared to any other web conferencing tool. I note Zoom because they recently came out providing utilization with another software product and b) it just is a great web conferencing solution, that many vendors have integration with already.

The problem though is that many companies will do the mass everyone to call into the webinar, which frankly is an awful idea.  Just as with ILT, plenty of people will not be paying attention, and with them at home, surfing the net is a guarantee while someone is talking.  Mute will be the button used most. 

Thus it is far better to schedule out a series of webinars per week, with various times, rather than every day at 9 a.m. for example,  Limit the number of participants.  This is especially true if you are doing B2B/customer training.  And if the latter, and you charge, then your numbers should go up revenue-wise. 

B.  Digital Coaching –  Early on digital coaching, aka mentoring aka as coaching was on the rise with learning systems, what I am seeing is an increase not at the C-level per se, rather across employees.  The one trend that is showing up, is that blue-collar workers are not receiving the same digital coaching options, as white-collar workers.

Part of this is due to the workplace attitude towards upskilling with it – and this includes in the past year, tying it to job role rather than the skills themselves that someone would want to learn – thus increasing usage and interest. 

Digital coaching, whether it is a digital coach platform and there are plenty out there or coaching within a learning system including LMS and LXP, tends to be seen higher with Sales Enablement Platforms (another type of learning system).  LMSs (as a whole) follow with LXPs last.   It shouldn’t be this way, nevertheless, too many systems have not utilized digital coaching. I expect that to change. 

Coaching in learning systems (as a whole) currently follows the same mantra regardless of the vendor.  The employee records themselves, either by mobile or webcam, the coach, whoever that might be (trending more with managers/division heads), respond back in text and it goes on and on.   This is reactive and definitely not pro-active.

Only a few systems enable the coach to record themselves and send back to the learner and for them to follow up and so forth.  A coach mind you is different than an expert.  Although again, numerous systems put them in the same category. 

I saw a very cool digital coaching platform, called CoachHub. By far the digital coaching, platforms is my favorite. And my forecast for them is higher than average sales in the previous year.   Directly due to the end of ILT (for now).   CoachHub requires their coaches to have at least 500 hrs of coaching, have to be certified by one of the coaching associations, and a few other requirements.  I mention this solution, because there is nothing stopping any LMS, LXP, DLP or SEP for that matter, to provide actual coaches to their system – via a marketplace if you will or through some other manner to their platform.

The big minus to CoachHub today is that they are not interested in being a bolt-on or add-on to an existing learning system.  Thus, they do not offer their API to be tied to any other system, even if this is what the client wants.  Personally, this is a monumental mistake.

Excluding a mistake in their go-to-market strategy, they validate the forecast of growth with digital coaching.  I surmise you will see more coaching capabilities with various learning systems in the coming months.  You will likely see tweaks in event management (which is primarily used for webinars, web events). If your system offers “classroom mgt.” as an option, I’d decline for now.  Classroom mgt is designed for ILT. 

Please note at this time, I am not seeing growth in a mobile app that has a coaching component, via any learning system. 

Forecast 4 – Skill Development Goes up a notch

The minus trend is re-skilling, which is something every system and even companies themselves should provide to their employees.  Especially since they are at home, and not having an opportunity to utilize what they recently learned.   This is a form of re-skill by the way.

What I see though is the wording of we need to re-train our employees sounding great for all to here, then ignored when it comes to L&D, HR and Training as a whole.

With all those folks who are losing their jobs, wouldn’t this is be a great time, to offer those former employees continued access to your learning system – preferably if you have an LXP or DLP (Digital learning platform) or even skills management platform, where they can continue to pick topics or interests tied to the skills they want to learn?

It seems a logical option, yet I can tell you, that it is highly unlikely to occur.

What is more likely to occur is the continuance of the push of upskilling the workforce. Trend lines all point to this being heavy on the upswing.  What is “jury out” is whether or not, companies push acquiring new skills OR job role acquirement and continuation of skills?

Current trends show the job role skill focus, rather than the focus on the new skills someone wants to learn, regardless if they are white or blue-collar. 

Forecast 5 – Learning Systems & Content Gains and Losses

If you are a learning system vendor targeting HR, I am expecting lower than usual sales during 2020.  HR Tech will take a bit of a hit, but compared to vendors who is directly focusing on HR as the key, rather than L&D or Training.

Customer training learning system vendors should see higher sales over the course of 2020. Trends were already pointing higher than usual sales coming out of 2019, and there isn’t anything I see that shows it otherwise, especially if your customer training is software training of some sort.  B2B, whereas it deals with retail locations or franchises or where your clients exist at walk-in locations of some sort, will clearly go negative, as long as those locations remain closed.

If you are a learning system vendor targeting the association market, expect to see growth in professional associations, and less in trade associations.   If you are a content provider you should put some sales folks on the association space specifically targeting professionals. 

If you are a content provider who offers Slack content (i.e. how to use, etc.), then I believe you will see significant growth (if you are in a content marketplace or plan to be in one).  Any in L&D should never tell employees to just go to YouTube for how to use Slack, nor use Slack materials as their training.

3rd party content providers have a real opportunity to increase sales in 2020 and achieve higher than normal results.  In fact, if you are a 3rd party content provider whose sales run flat for 2020, you probably should consider another business.

Bottom Line

Listed above are some forecasts for 2020, in this new world we live in due to COVID-19. I didn’t go into PE, but trends that showed up in 2019 with high funding going into Asia and India related to EdTech is still going strong through early March.  I expect this trend to continue. 

Lastly, to boost the usage of your system, I strongly recommend utilizing gamification in the system.  If it doesn’t have gamification with points, then add the points yourself, list it in the objectives, but do not make it so the points are acquired only if the learner completes the course.

Finally,

The market may change, and with this pandemic, you may think that something in the learning system space is obvious.

But as we all know, in Training and L&D,

Nothing ever is.

E-Learning 24/7

 

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