How to Transition Your Customer Training From a Cost Center to a Profit Center

March 29, 2016


While online training is scaleable and has big cost advantages over traditional in-person training, there are inevitably some costs. If you are booking your online education program as a cost center, it can be challenging to protect it when budgets get tough. One solution to that is to turn it into a profit center.

In business terms, a cost center is a part of a company that adds an expense to running the company but does not bring in any revenue directly. However, that's not to say that cost centers are not important -- it's just the opposite. For example, paying your electricity bill is a cost, but you wouldn’t want to run your business without it.

Similarly, your customer service department may currently be a cost center, but the customer satisfaction that results can have an indirect impact on sales. Since cost centers do not bring in direct revenue, they are usually operated on a very tight budget.

On the flipside, a profit center is defined as an area of a company that not only spends money, but brings in revenue as well, hopefully enough that it is profitable. That means profit centers will have a more direct impact on not just the customer experience, but on the money they are spending and therefore directly on the overall health of a business. Since a profit center defrays some or all of its expenses, its budget may be under less pressure.

So thinking along these terms, how can a company turn its customer training program from being just a cost center to a profit center? Here's some suggestions.

Related reading: Drive Your Company Growth With An Online Customer Education Program

Know when to charge

While the bulk of your online customer training may be offered for free, that doesn't mean it all has to be that way. For instance, while your basic training courses can be given away, consider building more "advanced" courses that customers can take for a nominal fee.

These might be for advanced users of your product or they might be on larger industry topics and trends that you have expertise in and that your customers will value.

Any time you're providing a customer with information or insight that will help them grow their own business, or make money, is a good candidate for a course to sell.

Related reading: When to Sell Online Courses and When to Give Them Away

Renew, upsell & track

Those involved in managing a profit center within a company have to keep a constant eye on the money it makes. In order for a cost center like online customer training to become a profit center you’ll need to be tracking conversions -- such as how many customers have purchased upgrades or how many ended up renewing their subscription because of the training they received.

Additionally, now is a good time to check to see if your online courses are fully optimized for renewal and upselling. If not, the process of rethinking your customer education as a profit center is a chance to change that.

Generate leads

Smart businesses know how to find good leads and turn them into sales. With an online customer training program, you have a mountain of potentially great sales leads right at your fingertips. Your sales or business development teams can see which customers have completed what level of training so they can easily hone in on what questions to ask them and what other products and services they can offer.

Another idea is to offer an online course for potential customers. That gives them a taste of what they can get with your company and gives your sales team a great jump-off point.

To make the most of these potential sales leads, consider using an online education platform that integrates with a customer relationship management (CRM) software such as Salesforce, which would put the information your sales team needs right at their fingertips.

Related reading: 7 Reasons to Ditch Workshops & Webinars for Online Customer Training

Final thoughts

Unless they plan to sell their courses, companies that offer a customer training program are not looking at it as a revenue stream. However, with some different thinking it's quite feasible to take what is normally considered a cost center and turn it into a profit center and to get more value out of your customer education program



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