Are e-Learning Professionals becoming the new "hip discounters" of the professional world?

I was browsing a few of the freelance sites and came across several Storyline developers offering to design and build courses for $10.00/hour, $16.00/hour, and $20.00/hour.

Am I the only one who thinks this is crazy?

Pricing is not a sustainable competitive advantage. Someone will always come along and offer their product/service for a lower price than you! I realize that a client who selects some of the “low price” developers will “learn the hard way” but what impact do you see for our industry in the long-term?

Are we destined to become the Walmart, the Target or the “hip discounters” of the professional world?

 

32 Replies
Julie Stelter

Hi Richard,

I may be living in the world of naivety because I like to think quality matters. I think organizations who are going through their first foray into elearning may fall for an attractively low price. That is until they see their timeline explode and their internal capacity maxed out. Every day I'm reminded that most people do not know how time consuming, multi-faceted and technical knowledge is required to design an elearning course.

Cheers,

Julie

Richard Watson

Thanks for sharing your thoughts Julie. I would have to agree with your statement:

"Every day I'm reminded that most people do not know how time consuming, multi-faceted and technical knowledge is required to design an e-learning course."

How do you think we, as e-Learning developers/designers, can communicate our value to clients in a way that will cause them to ignore these "low price" developers BEFORE they make the mistake? Is that something that is possible or just a pipe-dream?

Richard

 

Bob S

Price erosion is all too common (unfortunately) for many market segments and professions. The safeguards against it are usually similar too...

Focus on service, not just product - Our "product" is the training deliverable(s) and someone will always be willing to make version of a product for less money. If we put all of our eggs in the "yeah but ours is better" basket, then we have a singular argument to make.... and not everyone will be willing to be open to it or see the differences. Instead remember to talk about the service we provide, the ease of working with us, the tailoring to audience, the peace of mind, etc.

Differentiate the product - What is it our product can do that other's do not offer at all?  Rather than going for just "better", go for "different" (and better!). Are our deliverables 100% custom branded?  Do our products have a unique type of interaction experience? Are our products tested to increase to retention/impact results?  While we can't focus on product alone (see point above), it doesn't hurt to have something your competitors can't offer.

Focus on the business need, not ourselves -  Remember we are all selling at some level or another, so don't fall into the classic trap of talking mostly about you and what you do.....  It's about the customer.  Learn their business language, learn their culture, learn what didn't work before. and (most importantly) learn what their pain points are,   We would not exist if the business didn't have pain they needed to address. But remember that pain not be what it appears on the surface.  Learn to understand what is really motivating the need for your services and you become infinitely more valuable.

"There are a number of folks out there that can just create some e-learning course, but as a potential business partner I want to ensure the training is appropriate and actually impacts your business. That way it doesn't become a spend-and-forget situation. So branding it differently for each of your divisions and building it with standard tools and in a modular way so you don't have  to go through this all over again every six months sounds like a better choice.  In fact, I will be glad to sit with your in-house folks to show them how they can make the simple updates, and if a big change is needed or you are resource strapped, I would love to work with you going forward as well." 

Great topic and hope this helps!

Alexandros Anoyatis

The rate-race on those "freelancing" sites has been taking place for quite a long time, and a lot of it has to do with their business model that drives this, so no real surprises there.

I love Bob's ideas above, and have been trying to realize them (when given the chance). For every other case I just say "No, thank you".

I also take a minute to analyse my process, and how I treat each phase of a project and try to match or amend this to fit their scenario. But for that to happen, they should already be willing to talk, rather than just collect a rate quote so they can filter out solutions top-down based on pricing alone.

Personally, there is no bigger red flag than an end client whose only question on their first email is "how much do you charge per hour".

Speaking of "red flags", let's revisit an old quote...



Just my 2c (the one rate that doesn't falter),
Alex

Shelley Owens Schaal

Two things come to mind with this topic. First, is the portfolio. When you are a true professional, it shows in your work. My experience is that most businesses who want quality work, won't even look at someone that charges that low (unless they are a small start up and don't have a lot of cash to spend) at least here in Canada.

Second, is the resume. The techology you use to create your eLearning is never as important as the content. Good Instructional Design is about knowing how to deliver results. This goes to Bob's comments above. It's more than just making something look cool. You have to understand things like business need, learning objectives, audience, corporate culture, and retention to really give clients a quality product.

Richard Watson

Excellent points Bob.

I especially like your comment about focusing on the business needs. In the end, it's about things like:

1. Asking/Knowing what your customer wants! 
Talk to the them, watch for their social media comments; monitor online forums where they hang out, etc.

2. Satisfying their need(s)
Give them what they want to buy while at the same time striving to provide them the best value.  I think this is something that clients really are looking at when determining if they want to work with you. What benefits do they get from working with you, subtract out the costs of doing business and you are left with value.

3. Delivering what your promise
Deliver on any expectations that you set. Don't break promises you make and set realistic goals.

4. Acknowledging those who purchase your service/products. Thank them, get to know them, etc.

I think if you take this approach, you will always come out ahead of most of the "low-price" developers out there.

Richard

Richard Watson

So true! 

When the first question deals with your hourly rate, the client is most likely shopping for the cheapest price. For me, it's about creating long-term relationships when I can.

Many years ago I had a client who, after telling them I was raising my rates, decided to go elsewhere. About 4 weeks later, I received a call asking me to take them back on as my client. They had so many problems with the other subcontractor and recognized they could work with me and know their project was being handled in an efficient and timely manner.

Thanks for commenting Alexandros!

Richard

Richard Watson

Shelley,

Wonderful examples.

I think there are quite a few IDs/E-Learning professionals (freelancers/corporate types) who don't understand the basic fundamentals of running a business. Hence, they become more "order-takers" than "decision-makers".

If you don't understand the business drivers, how can you ever address them in the content you design/deliver?

Thanks for your input. Much appreciated.

Richard

Katie Delgado

Maybe they just plan on taking twice as long as most developers?  I'm sure they report more hours than your average developer.  They probably count hours they were thinking about development while in the shower or driving to the grocery store... just like lawyers.  ;-)

Honestly, I've never done freelance eLearning development  (but I want to see if I can do some on the side)  

I don't know the norms.  

Joseph Ferraro

The sliding scale of quality in eLearning work really has quite a range, and the difference between a great, visually-stunning module and a wall-of-text slideshow is usually quite apparent. If the prowess and demonstrable experience of an instructional designer (which is paramount to establishing value) is conveyed properly to potential clients, it seems unlikely that these "hip discounters" will gain any meaningful ground, regardless of if they maintain a sustained presence. "You get what you pay for" is still more often right than not.

Ulises Musseb

In my line of work I have to contact and evaluate different vendors, freelancers and companies, and in my experience, many of those freelancers who offer a low rate are either starters, some may have a good set of skills, but so far none have demonstrated good business sense. Their introductions, presentations and calls with clients are, let's say, less than ideal.

However, I have to say that the flip side of it is true too. There have been some who are overpricing themselves, in an attempt at looking like by inflating their rates somehow the quality of their work is going to improve magically.

In my experience, I look for:

  • Of course their rates, based on what the industry pays for the level of expertise that the person/company brings.
  • Their business sense. Some have no idea of the process of getting contracted by us.
  • Their people's skills. Some presentations and introductions have not been very impressive. Some have.
  • Their availability. I have encountered some people who want to work on this "on the side", or are over committed.
  • Their ability to estimate the amount of time that they can spend working on the project, based on the level of complexity, deadlines, budget, etc.
  • The kinds of questions that they ask (if at all, some don't even bother asking questions!)
  • Their knowledge of the software (when I see their samples I can tell when some are just starting to learn to use the software).

Based on that I have screened out quite a few consultants, and not all are independent freelancers. So yes, I do agree that in many instances you do get what you pay for, but also keep in mind that paying a lot doesn't mean that you will get quality by default.

Richard Watson

Katie, that's an excellent observation. I never thought about billing while I'm in the shower! :)

I think we as e-Learning professionals can easily recognize these types of "discounters" on the market. If you've been doing this for a short amount of time, you know how long/much it takes to design/develop content.

It's just a shame that so many people looking to our profession for services in creating quality content, still fall for these types of developers.

Thanks for your comments!

Richard

Richard Watson

Joseph,

Agreed. The key is educating clients just like any other industry does to avoid the "discounters" and continuing to present the value we bring to the table.

On a side note, I once read about a course that was developed and look amazing. It was very high end, used amazing graphics, and professional voice overs. Unfortunately, it was absent of anything that would address the learning objectives... but it did look amazing!

Richard

 

Richard Watson

Ulises,

Those are some really useful points to consider.Thanks for sharing your thoughts as someone who contracts out with freelancers.

I agree that, in some situations, paying more doesn't necessarily produce better quality.   I also like that you commented on "their business sense". I've written a series of blog posts on my website that are targeted to helping e-Learning freelancers navigate the business-side of running an e-Learning freelancing business. In order for us to move from being seen as "order-takers" to "decision-makers", we have to have a strong business sense. Whether you work as an independent freelancer or within a corporate Learning & Development department, I think is is so important to have some basic understanding of how a business runs.

Richard

 

Richard Watson

Yes. I think there are a subset of e-Learning designers who focus so much on the visual side of things that they forget the purpose of e-Learning.

e-learning or learning in general in today's companies, is about addressing a gap in their employees' knowledge/skills.It is only by addressing these gaps that we find the connection to business drivers that make the company function.

As I stated while commenting to Ulises, we have to move more from "order-takers" to "decision-makers". This requires knowing what the business drivers are, linking them to the learning objectives, and then producing quality content that fills that gap.

Richard

Ashley Chiasson

I agree - freelancer.com and upwork.com (and even fiverr) CAN be great services, because there are a lot of really talented folks on those sites making a successful go at it and being paid competitively. However, the rate-race is VERY abundant on those sites, and in my opinion, the hustle to get paid appropriately, is much greater than the yield. 

I think for people just starting out, those sites are a great way to get your foot in the door and gain some experience, but you should go into it expecting to be underpaid. For employers, I agree with Julie - with many of these cheaper providers, you will likely pay more in the long run when your timeline explodes.

Richard Watson

Good points Ashley.

It's unfortunate that someone would have to go into any project expecting to be underpaid. I know some people do that but it goes against the basics of running any business. If you do it enough, you will accomplish two things:

1. You will be seen as a cheap commodity
This can make it hard for you to raise your rates in the future.

2. You will eventually burn out
You may be busy working 24x7 but if you're making peanuts, you will eventually discover that is no way to make a living.

As always, these are just my "two-cents" and others may or may not agree. It's something that I am passionate about as you can see. :)

I would like to see all e-Learning professionals (FT/PT freelancers) earn as much as their knowledge/skills can bring them. I love the creative-side of our industry and realize we wear a lot of hats in our daily roles. One I would like to see more of us wearing is our "business hat". :)

Again, thanks for sharing your thoughts and adding to what I think is a very interesting topic discussion.

Richard

Jerson  Campos

It happens in every field. When photoshop became more available, people would advertise that they can do graphic design for 1/2 what professional were charging. When Flash came out, people bought that and advertise that they can design interactive web pages for cheap.  It even happened in the signage industry.  I used to work for a sign artist (yes, artist) who could create beautiful hand crafted and hand painted signs. Of course it was expensive, but you would end up with a nice work of art.  Then vinyl cutters became cheaper and vinyl printers became cheaper and people bought those and started advertising that they have a sign business and ended up producing cheap ugly vinyl signs.  While I don't think the sign industry has fully recovered from the introduction of cheap vinyl signage, web design and graphic design has bounced back. Just because people have purchased an eLearning software and advertise "I kanz eLearn 4 cheap!" doesn't make them Instructional Designers.  I think everyone else has said it and I agree,  they get what they pay for and the work that we produce justifies our rates.