In working with professional associations, nonprofits, and universities, I have been able to observe different approaches in making a decision on: selecting a learning management system, deciding on an integration with an association management software, providing a single sign-on, and even in considering costs related to recording live continuing education sessions. Almost always the initial consideration is cost, which I recognize as a real concern having worked at an association for over a decade. And granted, any responsible staff person evaluating a purchase should consider costs to the organization. However, solely considering costs is short-sighted.
What puzzles me is that the decision-making process often stops at cost. If it isn’t in the budget or the cost is perceived to be too much, no further review is undertaken. While respecting the concern over cost, I maintain that the analysis is incomplete, and therefore flawed, unless the potential benefit derived from the purchase is also fully assessed. Benefit can be measured in dollars and in member/learner satisfaction. This isn’t an exact science, but knowing your members or learners enables you to put together some credible measures of potential value to offset costs.
First ask yourself the question, “What is the likely revenue or savings I will create, if I say yes?” A couple of examples:
- If I pay X to record my sessions at the annual meeting, and I provide those sessions as on-demand programs later,
- How many purchases of the on-demand programs are necessary to cover the costs?
- Can I offer annual meeting registrants, for an increased fee, access to the archived sessions after the meeting? If so, how many are likely to opt into that opportunity?
- If I am considering a new learning management system because my current LMS has crashed several times, and the new LMS costs more, but it never crashes,
- I have lost X customers due to the crash, and those customers will never return absent another solution. Do this math: X customers multiplied by average dollars spent in a year. Your solution should have reporting to help you get this information.
- Do the above prospectively. I’ve already lost X customers and with another crash, I will lose at least the same number of customers I lost before. Y customers multiplied by average dollars spent in a year. Note, this number could be even greater if some of your loyal customers gave you multiple chances after a failure.
- How much staff time was lost due to these crashes? Take the value of your staff by the hour (don’t forget to add in benefits) and ask them to estimate the time they spent in handling calls, emails, refunds, etc.
- If I select a new LMS, and I market the new solution, can I win back lost customers? If so, what is a good estimate of returning revenue?
- Can I expand my current market share based on selecting a stable solution? If so, what is a good estimate of new revenue?
- Measure in registration dollars. This will cost me Z registrations.
- Or measure in membership dues dollars. For voluntary organizations that provide free continuing education, you cannot look at the cost of delivering free CLE without looking at the increase in membership dues after you start providing the free content. If you need to do so, survey those members and find out why they became members. You’ll see!
- If am looking for a first-time LMS solution or a change in an LMS solution, and I want to go with the lowest bid,
- What am I not getting with this solution that the others are providing?
- How can the LMS provider bid at such a low rate?
- Are there fewer features?
- Is the provider going to charge me for things that are normally provided without cost by the other LMS?
- Is the provider staffed adequately to provide me the level of service to which I am entitled?
- Does the low bid indicate the provider may be desperate, and therefore on the brink of going out of business?
- What is the cost of change if this provider is inadequate or goes out of business? Measure staff time, consider lost customers…
Second, ask yourself about your learner satisfaction. “How happy can I make my customers if I say yes?” While you can’t always assign a dollar amount to satisfaction, you can consider the value of member loyalty to the overall organization.