7 min read · Written by Grant Rayner on 13 Sep 2023
Share by emailLast week, I touched on the advantages and disadvantages of offering training as a service. I concluded by saying that, in most cases, you should offer training services for your clients. Training provides an excellent complement to consulting services and is a tangible demonstration of your competence
As an independent security profession, there are multiples approaches to providing training as a service. In this article, I want to focus on the intended audience for your training services. I’ll discuss different approaches aligned to each audience, and will explore some of the financial implications of each approach.
Let’s start by looking at an overview of the primary audience segments.
At a high level, you have two potential audiences for your training services:
‘Organisations’ in this context refers to establishing a commercial relationship with a client and providing training services to that client in exchange for money. As you start building your business, this approach will probably be your default option. However as you’ll learn shortly, this approach comes with a number of different challenges.
Conversely, ‘individuals’ means basically anyone who might be interested in learning from your knowledge and experience.
Let’s explore some of approaches to providing training to organisations, along with some of the associated challenges. I’ll focus on providing training to individuals in next week’s article.
As noted above, your default approach to training will probably be to offer your services to organisations. There are obvious benefits to taking this approach. Training is an excellent complement to your other services, particularly consulting. Most organisations have a need for training (although, the specific need for your training will need to be determined). Organisations will also typically have a budget for training. Having a need for your services and having money to pay for those services is certainly a good start.
However, you’ll quickly come across several interesting challenges.
One of the biggest challenges you’ll face as an independent security professional is that developing a training package will be time intensive. The first issue here is that the time spent developing a training package could take you away from working on other projects. The second issue is that your clients may not always appreciate the amount of time involved with developing a training package. Instead, it’s common for clients to only focus on the delivery time and associate your price with that time.
Using a simple example, let’s say your client has asked for a quotation for a training workshop. You determine that it will take you two days to develop the training materials and two hours to deliver the workshop. Based on an hourly rate of $250, the total cost of the training for your client would be $4,500 (based on 2 x 8-hour days + 2 hours for delivery). Your client baulks at your price, telling you that $4,500 is a lot for just 2-hours of training. They haven’t factored in the need for development (and almost certainly haven’t factored in the many years of experience necessary for it to take only two days to develop the training!).
Your client’s perception may also be shaped by the number of participants attending the training. If you’re presenting to a group of 100, $4,500 may seem like good value at $45 per head. Less so if you’re only training 10 people.
Of course, you need to be up front with your client and explain the time it takes to develop such training. Your rationale may or may not sway their final judgement.
Fortunately, you have a few options to minimise the impact of development costs that will benefit you and your client.
One way to manoeuvre around the high costs associated with developing a training package is to propose to your client that you run additional sessions. By doing so, the cost of training development can be spread across multiple sessions, reducing the average cost per session.
As an example, you could develop the training package and run a single pilot session. Subsequent to that, you could run multiple additional sessions at other client locations. Using the same numbers as above, the client would still pay $4,500 for development and the initial session. You could then charge them $800 for any additional sessions (2 hours x $250 is $500, however you should factor in the additional time for getting to the client location and other associated factors).
Taking this approach, the more training sessions you deliver, the more the cost of delivery is spread across the project and the lower the average cost per session.
This approach may provide a more reasonable pricing structure for your client. However, you can do one better.
Extending the approach of offering additional sessions, you could offer your client a multi-year training programme. In doing so, you could take the same approach to developing the training package and then, each year, allocate a few hours to refine and update the training material.
This approach would look something like the following:
Year 1: $4,500 including development and a pilot session, plus 4 additional training sessions at different client locations at $800 per session. The total client spend for year 1 would be $7,700, which equates to $1,540 per session. Not terrible.
Year 2 and onwards: $500 to refine and update the training material, plus 5 training sessions at $800 per session. The total client spend for year 2 (and subsequent years) would be $4,500, which equates to $900 per session. Quite reasonable.
The ideal scenario would be to pitch these options to your client at the beginning of the discussion. Taking this approach can avoid having to talk about the cost of developing the training, because the cost can be spread across multiple sessions, and potentially across multiple years.
What if your client just isn’t into paying for the development of the training?
Let’s say you’re faced with a situation where your client has a tight budget or is simply unwilling to pay the full cost of developing the training. Let’s also assume that the client doesn’t have multiple locations and isn’t interested in a multi-year programme. In this scenario, you’re at risk of losing money on the time you put into development. You should probably say no to the project and focus on other work.
However, in this particular case, you believe that there is a strategic benefit to working with this client and you want to go ahead with the project anyway, even though you will make a loss (this is not an uncommon scenario by the way).
In such a situation, the best approach is to ensure that the content of the training package you develop can be re-used for other client projects. That way, even though you will have to absorb a loss at the beginning, you now have a fully developed training package that you can offer to other clients. You will need to make it clear in any agreements that you retain ownership of the training material (and, naturally, you would need to ensure that the training material you offer to other clients does not include this client’s company name or other details).
The minute you complete the client engagement, you can add the new training option to your website and reach out to your contacts to let them know the training package is available. Moreover, because the development has already been completed, you can offer the training at a compelling price point while also allowing you to recoup the cost of development and make a tidy profit.
Overall, I recommend taking this approach whenever you develop a generic training package that you believe could benefit other clients. Build the package, deliver it to your client, then adjust the training content (if necessary) and offer the training on your website. Very few training sessions are truly bespoke. Most will meet the needs of multiple organisations.
The examples above have focused on training that’s tailored to specific client requirements. Of course, you could develop training workshops and offer these workshops on your website (we’re focused on live or remote training here, not recorded training—more on that in future articles).
If you decide to offer training services on your website, don’t feel the need to develop the full training package in advance. After all, no one is paying you to do this and your time is better spent engaging in paying projects. Instead, build a compelling outline for the training and include these details on your website. The first time a client requests a particular training workshop and agrees to pay you to deliver that workshop, you can then develop the training material. Once you’ve developed the training materials for this first client, you can then continue to offer the training and will eventually recoup the cost of development.
There are many ways you can price these standardised training offerings. While you should not include the full cost of delivery in the price for a session, you should certainly include a percentage of that cost. As such, the cost for a training session should be more than your normal hourly rate (if your hourly rate is $250, a 3-hour training session should not be priced at $750).
One approach is to use a ‘payback period’, where you determine how many training sessions will be required to pay back the costs of development. For example, let’s say your training package took 4 days to develop at an estimated cost of $8,000. The workshop itself is 3 hours long, and you decide to price it at $1,500 per session. $1,500 will cover your time, which is likely to be close to 4 hours per session, equating to $1,000 (based on our arbitrary figure of $250/hr). The balance of $500 can goes against your development costs. By making this additional $500 per session, you’ll pay back the time it took you to develop the training in 16 training sessions. From the 17th session onwards, the $500 is pure profit. Now, you might think 16 training sessions is too many. That’s fine. You can increase the cost per session to $1,650 or $1,800. However, recognise that the more you increase your price the more you’ll squaring off with market forces, and you may find yourself in a situation where you don’t get the same level of demand.
I’m obviously keeping things simple with these examples (mainly for my own benefit, because I’m bad at math), but another important point is that you don’t necessarily need to apply your consulting hourly rate when pricing training. Instead, consider the value you are providing and the number of people that will benefit. That said, it’s still useful to use your hourly rate as a unit of measure when determining the cost of developing and delivering training.
Next week, I’ll focus on offering training services to individuals. This approach is an overlooked opportunity for many security companies, and it’s a market segment that you may be uniquely positioned to access.