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Posts Tagged ‘higher education online’

Why Am I BACK In School????

April 21, 2010 7 comments

I’ve spent the past eight years promoting higher education, specifically higher education online; during which time I had gotten certified in project management and taken a few graduate level business courses. I had originally taken online courses so I would “know what I was selling and marketing”. I’ve been vacillating for the past few years about going back to school online to get certified in six sigma, but never “just did it”….until last week.

Last week I enrolled for Villanova’s Online Six Sigma program through University Alliance (some of you may know as Bisk Education). Having worked in this industry for years, I liked the quality of their program, their delivery method, LMS, and they had a great admissions representative; Pricing was definitely fair, books included, etc.

I received my books on Monday and almost had a heart attack. I’ve spent my career ensuring students do not only enroll. but more importantly START and GRADUATE from their online university…Students have always called or emailed the first day of classes or after they receive their books wanting to DROP and I have always calmed them down. Well, it was time for ME to calm down. I went back to my first year in “admissions” and pulled out an old email I used to send students that said, “Don’t freak out! You’re going to be nervous to go back to school; you’re supposed to be. Everyone is feeling the same thing”. I didn’t 100% feel better, but a little bit.

Now that I’ve taken the time to peruse the six sigma book(s), it’s actually not bad…and the ‘words’ and ‘language’ that had intimidated me on my first day were all abbreviations for something I already knew (or knew how to do). It was interesting though – having the same feeling I’ve been talking students out of having for years.

Everything comes full circle, right?

Consultants; HOW and WHY Pay Per Performance Works (Part 2 – continuation from last post)

April 19, 2010 Leave a comment

After writing my last post I had several great comments showing me that 1) I did not delve into the actual performance model, but more so the overall business model 2) I didn’t give any helpful examples 3) I didn’t speak about the variables that are needed for success 4) I didn’t say why this pricing model would work; so to continue on my past posting.

I contend that consultants that utilize a ‘pay for performance’ model are more likely to get and retain clients as well as make more money.

Reasons this model works:
1. Client is taking on little of the risk – more likely to give you the business
2. You can charge more money on the backend of a consulting ‘gig’ than you can if you charge up front as you are taking all of the risk.
3. Long Term, there is a higher likelihood of people coming back to you for jobs as they like the model of taking minimal risk. You also may be able to get signed on a retainer because businesses like people who are confident and have made them money in the past.
4. You can also set up pay for performance deals ‘long term’. So, instead of getting paid 1 lump sum, you can get paid a percentage of revenue from your project or product every month for a year, 2 years, etc.
4. By taking on the risk, you are showing the client you are confident in your abilities.

In my experience, the variable(s) critical to success are 1) Knowing what you know and knowing what you don’t know; this model alleviates you taking on projects you cannot complete successfully, however it also affords you the opportunity to refer the ‘right’ person. Instead of taking a commission or money for your referral, you can go through the process or project with the person you have referred it to – therefore expanding your skill set and learning. 2) Knowing your industry 3) Experience. If you know your industry, have had numerous experiences, and have a stand out skill set, this will likely be a good pricing model for you.

As noted from other comments, there will inevitably be variables that impact your success. These variables change dependent on the business, however this is where experience comes into play. If you have done similar projects, you know what obstacles may come your way and can account for those obstacles when building out your contract, pricing model, and / or plan.

Examples of “Pay For Performance” consulting:

Business Development Consultant (easiest):
A company brings you on to consult in bringing them more partnerships, vendors, or clients. You can structure your payment plan so that you only get paid “if” you bring on a partner. This is analogous to a broker’s fee and can be set up in a few different ways depending on the situation. The easiest way is to get a ‘finders fee’. In my arena, I typically set up larger deals by which partner companies are purchasing from the client. I get paid 10% of total revenue for a year post the deal going live.

Training / Performance Improvement Consultant:
When you first speak with a company, you will need to see their metrics. For example, if you are wanting to work in ‘sales training’, when you go in – the current metrics are at 5% lead to close. Before you put together your proposal, you will need an assessment day (possibly more) where you listen to the current sales pitches, review any content / scripts, etc. You can then assess (based on your experience) how much you can increase the sales conversion rate as well as how that will affect the business overall. This is how you arrive at your pricing. So, if you are working in higher education online and you go to a company that has a 2% conversion rate – and you assess that you can bring it to 2.2%. This doesn’t sound like a lot, but if you look at the average lead cost ($30), your cost per acquisition on 2% is $1500; while your cost per acquisition on 2.2% is about $1360. If a higher education institution enrolls (sells) 10,000 students per month and you are able to raise that 2% to 2.2%, you have saved the company $1.4 million dollars in just 1 month or about $17 million per year. The way I would be paid in this situation, I would ask for $50 for each enrollment (or sale) that closes at over 2.1%. You could also just give a flat price / tiered pricing like…If conversion for the month = 2.1%, you get $15,000. If 2.2%, $30,000, etc.

To Be Continued Later This EVE

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