Last post I said making members wait for a year to get into a much-desired educational session doesn’t make sense and risks chasing them into the arms of the competition. But some organizations cling to the notion that waiting lists are a good thing.
“Look at all the interest we have in this program,” the executive director coos. “That’s guaranteed revenue for the next year or two for this one! Why can’t we have a waiting list for everything we do?”
Ikes! It’s NOT guaranteed revenue. The more someone is forced to wait for something — especially if they need it now — the more likely they’ll look to other sources to fill that need.
Besides, unless that precious program generates a bunch of money, its waiting list is probably doing the organization a disservice as well.
Think about it.
Here’s an Example
Let’s say you have a three-day face-to-face program that includes a primary content leader (much respected and a very effective facilitator who’s in great demand) and several supporting experts — panelists, guests, and session leaders. This program has been going on in your organization for many years, although some of the segments have changed with the times.
It gets rave reviews. It’s become a “must” for newbies in your industry. So even though you only offer the program once each year, and you’ve steadily increased the maximum number of participants from 20 to 40 to accommodate the demand, you’re still running a waiting list of 80.
That means anyone signing up TODAY won’t be able to get into the session for at about two years. (40 get in during 2012; 40 get in during 2013; assuming a couple of cancellations, someone signing up today could actually get into the session in 2013).
So what if you offered that program twice a year? You’d gain some efficiency in scale — you could use the same marketing materials, perhaps get some discounts for AV and F&B, particularly if you use the same venue.
Looking at the Numbers
But what do the financials really look like? Sharpen your pencil or fire up your calculator. Here’s the way the numbers unfold.
Let’s say your program costs $30,000 if you do it once each year. That means for 40 participants you need to charge $750 to break even. So you charge $799 to buffer things a bit and hopefully make a bit of revenue. (You tried $825 once but somehow getting into the “8″ figure turned people off — you lost your waiting list and got nervous, so you’re now content to make $49/pp).
$49/pp = a whopping $1960 in bottom line revenue. Assuming nothing goes wrong and your estimated costs don’t balloon.
If you offer a second session, your savings might amount to about 20% — $6000. So between the two programs, you’ll have $54,000 in total expenses ($30,000 + $24,000). With 80 participants, you only need $675/pp to break even. So if you still charge $799, you’re now putting $9920 in the bank ($124 x 80).
Not a bad piece of change! Of course, this assumes you’ll have a 20% economy of scale benefit…
So why not just offer the program twice a year? Why not three times a year — move through that waiting list even faster? After all, you’ll get even greater economy of scale, increasing your revenue even more, right?!?
Sounds like a no-brainer. But there are very real reasons why we only offer such a program once each year, regardless of the downfalls of a waiting list:
- There’s only so much room on the calendar. Especially if our members work in industries that are cyclical, we often have certain times of the year when they just aren’t available to attend face-to-face sessions.
- Our expert facilitators and content leaders only have so much time to devote to our programs. They might not be available at other times, and changing the session leaders and contributors will change the dynamic of the program — which could affect its quality, perhaps falling short of members’ expectations (the purpose of offering the session more than once gets defeated if people resist those new offerings).
- The time it takes to organize additional offerings increases staff workload. Time isn’t just money, time is energy. Our staffers are overtasked as it is — adding additional sessions will add more to their workload. Yes, there are economies of scale with their labor, but it’s nevertheless critical that we consider what the impact on their overall responsibilities will be to add these offerings.
All of this isn’t to say that we need to just live with the reality of waiting lists.
It is to say that we need to consider whether it’s time to offer an online equivalent of the popular face-to-face (FTF) program. Why online?
- You’ll not only be able to meet the immediate needs and desires of those on the waiting list, but an unknown number of other members who’ve either dropped off the list because they got tired of waiting or never signed up because the timing of the sessions didn’t fit their schedule (remember what we said about that in the previous post?!).
- You’ll leverage the best aspects of the FTF program by finding the balance of providing asynchronous and synchronous online sessions.
- You’ll create a program once that will require much less expense and maintenance over time — true economies of scale!
- You’ll provide your FTF content leaders with an opportunity to further showcase their expertise — something they’re not likely to shy away from.
- You’ll eliminate the “wait till next year or the year after or the year after that” frustration your members are currently experiencing. Young professionals, more than ever, live in an “immediate” mindset: they’ve grown up in a world of fast food, high speed internet, international TV via satellite, and 24/7 access to all of it. If they aren’t already asking why they have to wait a year, they soon will be.
Even if you’re already onboard with the idea of leveraging the Web to deliver online versions of your most popular educational programs, you need to do it correctly.
Offering a series of Webinars that imitate what happens in the FTF sessions won’t cut it. You must design an online experience that incorporates the best of the FTF program and deliver that content in a combination of formats that will do so effectively.
To do otherwise is foolish and fraught with financial peril.
So how do you do this?!? Tune in next time for some pointers…