Essentials Magazine Essentials Fall 2017 | Page 7

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 essentials | www.edmarket.org 7