The article is the first part of a two-part series on how to go about selling products in the K-12 market.
The Education industry is $100 billion market and the K-12 market is around $52 billion, and there is not a single billion-dollar company in India. Well, for argument sake there was one in 2009, Educomp, and I was privileged to be part of the growth and the learning. During my tenure, I created and led multiple products in the K-12 school solution space from VSAT enabled learning, to school assessments, to language labs and much more.
As an Ed-tech enthusiast in the VC space, I keep meeting start-ups that want to focus on selling to schools. For anyone, who is starting out first time in this market, my standard advice to them is not to do it. Despite my $0.02, there is a bread of these committed founders who want to make a change and disrupt the K-12 space using technology. I then focus on helping them figure out their sales strategy and for them to not make obvious blunders. Typically, a lot of start-ups focusing on this sector would come and say “I am B2B2C” company. The terminology means that you will sell the product to the school management (owner or principal) and will expect the management to push the product down the throats of parents/students and charge them per month/or annual fees. This way of selling became a fashion in the K-12 boom phase from 2007–2011. However, after experiencing bad services and products from various K-12 service providers, neither the school is willing to go down this path anymore, nor the parent is okay if charged a fee without consent or approval. Things have changed.
So the question is how do you get the school to pay for your product or service and scale to reach to 10,000 schools?
First, it is important that you know who your end customer is? — Is it the principal, school owner, admin/finance executive, teacher, student or is it the parent? Start-ups most of the time don’t think hard enough when devising their sales strategy for end customer and primarily focus on decision makers. For the sake of understanding, I am dividing these end customers into two groups. Group one is called Enterprise that comprises of school owners, principals, finance/accounts/IT officials and the group two is called Consumers that comprises of students, parents, and teachers. The sales strategy for both the group varies as the products sold to these two groups vary.
Products sold to the enterprise group ideally constitute of school ERP software, GPS-enabled bus solutions, branded curriculum, etc. — any product that improves the functioning of the school (apart from learning but not excluding) or is integral to running the school falls into this category. The challenge to sell to enterprise group is that there is massive competition and it is tough to create a differentiated product offering in the minds of decision makers.
So how do you sell to the enterprise customers?
There is a reason why I used the enterprise group name - it is because the sales strategy is very much like enterprise/SaaS products.
1. Don’t Sell Add-ons/Tools, Sell Solutions
Schools have a lot of problems- right from fee collection to student attendance to teacher management, and the list can go on. When you are selling to the enterprise group — sell a solution and not just a good to have tool or add-on or software or service.
Give them a complete solution. Enterprise customer typically does not like to use multiple solutions but want one solution that can do it all.
2. Never give away the product- FREE!
A lot of people give away products/services for FREE to school for a stipulated duration on the pretext that the school will eventually pay after using and finding value. For a new ed-tech company, this is their way of getting customer insights and improve the product.
Someone gave me this great advice: -
Free customers help build cool products but paid customers help build valuable products.”
Therefore, either get a paid contract, paid pilot or go with a freemium plan but never give away the product for free. Period. If the school management is not willing to give you money, then assume that the value that you are trying to deliver is not sufficient.
3. Create Channel Partners
Selling to schools requires relationships, and it takes time for start-ups to hire the right sales team that can either have or establish relationships with decision makers. The sales cycle is long and requires patience and upfront investment in team - not ideal for a new start-up.
To accelerate the process, create channel partners for your product. Tieing up with channel partners who sell different category products in the K-12 space can create a win-win situation as the channel partner can leverage his network and make additional money, and you can get sales without incurring any significant upfront investment.
Example: if you are an ERP solution provider- tie up with a partner that sells attendance system or furniture or provides books.
4. Create an Online Brand
A lot of start-ups fail here. They think the only way to sell to schools is by actually meeting the owner of the school. It is true that you cannot sell without meeting the actual decision maker, but start-ups forget that lead generation can be done online. Building a brand online will be very helpful in the long run as most of the decision makers are online — you just have to find them!
- So focus on your website to make it optimum for sales/lead conversion.
- Use marketing automation and techniques of drill marketing for lead nurturing.
- Use SEM/SEO to drive traffic to your website.
- Use Google Ad words if you have budget for marketing.
- Provide support through a knowledge base.
- Write blogs/ Create videos about your solutions.
- Ask your early customers to give you video testimonials.
Pick up the best SaaS companies in India and Abroad and read more about how to create an online brand.
In the next part, I would be talking about how do you target the consumer group. The Consumer groups is a significant opportunity that start-ups wish to tap as there are over 200 million students in the K-12 space.
Disclaimer : It is strictly an independent opinion of the writer, not representative of Kstart or Kalaari.” in the article.
You may also like:
Abhishek works at Kstart -Seed initiative of Kalaari Capital. Abhishek has been an entrepreneur and has worked in various product and sales roles at Educomp. He is an Ed-tech enthusiast and is presently developing his own investment thesis on gaming & consumer internet companies. Forever open to coffee meets. Follow him on Twitter @abhishek20