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Jun 15, 2004
Case Study

How to Launch a Training Division Selling Your Advertisers Pricey Workshops

SUMMARY: Are you looking for more revenue sources than just ads and subs? Find out how CMP's Channel Group repurposed an in-house research database to launch a new training division 18 months ago.

We estimate it's already raking in at least one million a year (and growing fast) with just three full-time staff:

"Anytime there's confusion, there's opportunity," says Bob Faletra. "If you can provide clarity, you can make some money along the way."

As President of CMP's tech trade publishing Channel Group, Faletra was always looking for ways to broaden the revenue base beyond the obvious print space ads, site banners, and list rentals. But Channel Group's industry niches were still badly affected by the recession and overall marketplace ad revenues only grew 1% in 2003.

Faletra discovered when reviewing his balance sheets that at $3 million per year research was his third highest cost center, immediately after staff salaries and content distribution costs (online and in print.) The division interviews 50,000 solution providers and end customers a year, gathering more than 10 million data points all housed in a marvelously slice-and-diceable database.

Many publishers in the past (especially dot-coms desperately seeking something besides ad revenues to lean on) have tried to sell their in-house data as a research product. Very, very few have succeeded.

How could Channel Group be an exception to the rule?


Faletra decided that if you're launching a new line of business, you have to take it seriously as such from the very start. So, he reassigned three full-time CMP staffers, including former top regional ad sales manager Toni Clayton Hine to run the new division.

Next they brainstormed a new brand name for the division. (Unless your research department is branded separately, you run the risk of advertisers ceaselessly requesting freebies from their reps.) It had to sound authoritative and valuable, as well as broad enough to encompass a variety of potential future directions. The team came up with, "The Institute for Partner Education & Development."

Naturally The Institute got its own logo and Web site (link below.) "We tried many, many iterations of that logo to get the final one," says Hine.

The team decided to test five main types of offerings:

Offering #1. Regional training events

The team developed three different curriculums for intensive two-day workshops, each targeting a particular job function in the target industry:

- Leveraging Partners to Increase Sales
Targeted mainly sales titles at $1495 per ticket

- Maximizing Channel Engagement Strategies
Targeted mainly marketing titles at $1695 per ticket

- Channel Leadership Forums
Targeting business leaders at $2495 per ticket

Each event was limited to 30 attendees, and marketed intensely for the preceding six-eight weeks. (Eight weeks being optimum.) If The Institute sold fewer than 10 tickets by a certain date, the event was either cancelled, merged into another region's event, or rescheduled for later in the year.

Faletra says, "In some ways this is strategic as much as it is a business for us, so our go/no-go on prices is probably less than other businesses. We're not going to do it at a loss though."

Attendee changes and cancellations are rampant for events serving swiftly moving industries, so The Institute safeguarded received income with a clear cancellation policy:

"For cancellations received four weeks prior to the program date, full IPED course credit , good for one year, will be provided. Cancellations received within four weeks of the program date will receive a 50% IPED course credit, good for one year. Substitutions may be made at any time."

Offering #2. Custom training

The Institute also offered customizable versions of the regional training event. The pricing for a one-day class with a medium-high customization was $900-1100 per attendee, including Institute staff travel. Pricing varied depending on:
- How much custom content the client wanted presented
- Number of attendees
- Length of engagement
- Staff travel required
- Relationship with sister-brands in the Channel Group

Developing the content was harder than anticipated because inevitably the client would ask for the moon, which couldn't all be shoehorned into allotted presentation time or attendee's heads. (As Hine puts it, "they can feel overwhelmed, like they are drinking from the information firehose.")

Offering #3. Speaker's Bureau

Sometimes the only thing a client wanted was a speaker to give a rousing and informative talk at an in-house sales-training event. In that case, The Institute ran a Speaker's Bureau scheduling dates for top staff such as the Publisher and top editors. "We don't go too far down the food chain," says Faletra. "I can't have a beat reporter who covers Cisco going out and doing a speech for Cisco for which we're getting paid."

Prices ranged from $5,000-$20,000 depending on travel time, prep required, and industry niche. All revenues went straight to The Institute. "The speaker does not get paid, the Group gets paid. There really is no conflict. They don't get compensated, it's part of their job. The publishing business has changed. You can't just do one thing anymore."

Offering #4. Custom reports

The Institute set a base rate of $7500 per custom cut of the research database, $5000 for qualitative research (interviewing executives among the client's sales prospects and customers), and $5000 to develop case studies and profile sheets based on those interviews.

Often the reports were competitive analysis. Hine gives an example: "IBM might want to know 'how do we stack up against HP?'" However, they were never white papers that a vendor might give out to prospects as a sales tool. That was seen as a line that Channel Group editors should not cross.

Offering #5. MBA accreditation program

After negotiating with a half dozen top business schools, The Institute signed a deal with Babson in Wellesley MA to create the compellingly-named "Channel Elite MBA" program.

"It's certification, not accreditation," notes Hine. So attendees get a certificate they can brag about but not a formal MBA.

Why Babson? "It's the number nine entrepreneurial study college in the world," notes Hine. Also, it's one of the very few top schools that will work with a content partner to create a highly-specific course for an industry niche. "Most say, 'Here's our deal, take it or leave it.'"

For $9,995, attendees meet for a three-day intensive course on-campus in August, and then continue virtually via four quarterly webinars. The course was limited to 50-people.

To add icing to the cake, The Institute also promised attendees, "Publicity and editorial exposure in CRN, VARBusiness, and ChannelWEB". CMP takes the separation of church and state seriously, so editors would not be forced to write stories about any attendee. Instead, they'd be encouraged to review the field, perhaps cherry pick a few, and Hine could use her house-ad space to plant stories and information about the rest on Channel Group properties.

All five offerings (training, speaking, reports, MBAs) were marketed through house ads in CMP's related print magazines (link to sample ad below), house banner ads running on unsold inventory on related CMP sites, official-looking links on CMP sites' navigations, an Institute newsletter, and sometimes offline tactics such as telemarketing.


"It's been a wild ride," says Hine. Partly due to The Institute's launch 18 months ago, Channel Group's overall 2003 year over year revenues rose by 15% (compared to an industry norm of 1%.)

By ContentBiz estimates, the division will take in at least one million in 2004 and could rise to more than three million by 2007 depending on market conditions. Not bad for a full-time staff-level of just three people.

Average annual sales so far have included ticket sales to roughly a half dozen regional events, a dozen custom training events, about 40 custom reports, and an estimated 30-35 students for the first MBA program (first class this August.)

About half of the custom training events are sold virally by a regional attendee going back to the office and saying, "Hey we have to get this in-house." So even if you just break even on regionals, you can consider them a marketing tool to sell the higher-ticket custom offerings.

Hine notes of the MBA students signed up so far about half are in it for the education and half are primarily attracted to the possible publicity of having Channel Group editors pay a little more potential attention to their companies.

Interestingly, not all of The Institute's clients have been Channel Group advertisers. Turns out that companies new to the field may prefer to gain education and competitive data from The Institute to prep prior to launching an ad campaign.

"There's a huge need for this kind of training," says Faletra. "Nobody else does it."

Useful links to related content:

Samples of The Institute's marketing materials:

The Institute's home page

CMP ChannelWeb
See Also:

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