NOT YOUR FATHER'S SALES CALL: How--and to whom--edtech companies should sell their wares is a life-or-death issue. In the past, the cost of sales into school districts has been "ridiculously high," notes Doug Roberts, president of Educational Solutions Consulting, who has been there, done that. In the past, the cost of sales for education products chewed up as much as 15% of revenue; sales cycles were frequently 6 to 18 months long. The amount charged to schools then was around $15/student.
Doug sees freemium models breaking that bottleneck: give teachers free--and truly useful--tools and they can become allies in coaxing school administrators to pay up for premium data management tools. The sweet spot for clinching sales, Doug contends: $2/student. He points to one client, EnGrade, that's converting its customers: 300,000 teachers use EnGrade's online gradebook, gratis. Since June, when EnGrade rolled out its more robust performance tracking tools ("Plus") it's signed up 25 schools. Sales efforts have been web-based and the company, Doug reports, is closing a pulse-racing 60% of the deals in the pipeline. (Fees start at $600/year for 100 students and are discounted with more students). Second insight: adoption wears a geographic halo. Districts buy what their nearest neighbors buy. Local school boards care deeply about what the next town is doing. Where do you want to make a sale today?