Business Strategy
Free is a big part of the program!
If you are experiencing a threat from
a free product offering and assuming
you come out of the denial stage, it is
important to assess how real the threat
is and to understand how the competi-
tor is making money. It isn’t likely that
someone is offering free products or
services out of the kindness of their
heart. Understanding their business
model and how many of your custom-
ers might defect is part of a situation
analysis, an essential step in the strategy
process.
How the K-12 Industry
Has Responded to Free
Consider, too, how other K-12
focused companies have decided to
compete with free. The first wave of
response was the “freemium.” Maybe
you’ve tried this. You give away a limited
feature version or a piece of your prod-
uct and then charge for other desirable
features. That’s certainly not a new idea
— not a new paradigm at all, just a new
name for an old game.
Another response to the free prod-
uct trend is to lower the price of our
product. Others have decided to drop
the price or give away the product and
charge for product training. Others
have suggested that the best solution
for making money in the K-12 market
is to shift attention to selling “learning
services.” Learning services fill gaps
required to make free products and
platforms into solutions that educators
need. These could be add-on produ cts
or human resources you charge for that
tap into different budgets. For small
companies in the K-12 market that have
served niches, the idea of developing
learning services can be an effective
response to free, especially when
professional development funding is
more stable than funding for curriculum
materials.
Offering learning services could be
a viable strategy for your company. But
becoming service-sales savvy and lever-
aging the shift to free is a tough tran-
sition for many of us who have grown
up in the product-centric education
industry. We have a love affair with our
products. It is painful to think of loving
our customers and their needs with the
same level of excitement as we love our
products!
Stubborn as a Mule?
The K-12 industry has stubbornly
relied on a product development and
field-based sales methodologies that
are as old as the schools we call on.
Many industry veterans insist that
it’s the only way. The fact is, reliance
on products (even free ones) or sales
prowess to grow a company in the
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