A pioneer in the area of subscription-based software services for schools, Dan Meyer, CEO of Atomic Learning, offered his perspective on how to sell and market a service to schools that depends on annual renewals: a licensing strategy and growing trend in the education market.
Q. Dan, Atomic Learning provides video tutorials (for popular software applications) and sells to schools by subscription. Your company is a pioneer in the subscription-pricing model. How do your salespeople respond to school administrators who want to purchase your solution with a one-time capital outlay rather than face an annual renewal fee?
What we've done to approach that situation is to look at multiyear deals; in effect, a three-year subscription and they pay for that all upfront. If they pay upfront, we give a small discount, about 5% per year. We don't offer this as standard terms, but if it comes up in sales process, or especially if it is needed as part of a grant, we try to work with the customer to craft something to meet the dollars available.
Q. How does the pressure for subscription renewal affect the ongoing relationship between your salespeople and your education customers?
We went through a transition about nine months ago, to go more to an account management role and a new sales role. We used to have sales reps carrying quota, without separating into new business and renewals. But the reps knew the easiest sale was existing customers, and they would make up the delta with new business. But as we continued to grow, the renewal portion became a bigger and bigger piece of the salesperson's number, and there wasn't as much time spent on new business. So we now have separate positions with individuals who are focused on getting new acquisitions, and we have individuals, our customer experience team, who work with customers to implement the product. This way, the renewal discussion is ongoing, part and parcel of the conversation.
Q. Are there other types of education marketing intiatives or school sales loyalty programs that you have implemented to ensure that your renewal rates stay high?
It begins early in the sales process when we are listening to what the customer needs and being sure that our solution is meeting those needs. It is not just a matter of selling it and then coming back for renewal later. We have several touch points along the way. It is about building a relationship and finding a champion within the school district, the voice on the customer side who will promote the product internally. We will provide them with some email templates that focus on professional development, curriculum integration, and other things along those lines. Finding a person who is willing to work with you within the account is key.
Q. How do you manage compensation? Do you reward your salespeople the same for bringing in new business as you do for renewal contracts to schools?
Yes, there is a difference in compensation and also a difference in the psyches of the people who are in those roles. Our customer experience staff would not describe themselves as salespeople, but some of our best salespeople are in that role. They view themselves in a customer support role. They are generally motivated by a larger base salary and lower commission rate, while our sales reps are more coin-operated, and they focus on new business and have a more upside in that regard.