- Clarify Motives
Not every right-to-reproduce request
is a thinly disguised attempt to pay you 10 cents on the
dollar. Ask your customer "why is this important to you?"
Perhaps your customer is simply
seeking the freedom to put their own stamp on your course.
They want the flexibility to include their own logo and
key message elements -- maybe even a flattering photo
of the CEO!
Or your customer may be seeking
to integrate your course or elements of your course in
a seamless way with other course content -- or totally
customize some or all of your learning content to their
specific situation.
Another reason why your customer
may be seeking a right-to-copy license is because they
feel your materials are too lavish and they don't want
to pay for fancy packaging. (Check out "Who's Minding
the Store on Course Manufacturing Costs" in the May 9,
1999 issue of Training Business E-Visory located in the
back issues section of our Website.)
Yet another possible motive is
to avoid the bookkeeping and administration associated
with inventorying course materials and keeping track of
each and every course participant.
Sometimes customers seek a right-to-copy
license because times are good and they want to lock in
their next 2-5 years worth of training needs during the
current fiscal period. Or they may want to even out payments
by paying a fixed amount every quarter.
Once you've clarified your customer's
motives, there's a reasonably good chance you may be able
to respond to their needs without de-coupling from a per
user pricing scheme.
- Determine Value
Let's face it, you shouldn't care
how a customer prefers to pay for your intellectual property
so long as you receive adequate compensation for the value
received.
However, the first thing to understand
is that even if you should decide to de-couple from per
user pricing, training is still a people business -- and
value is always a function of the number of people trained.
So the trick is figuring out what sort of factor to use.
For instance, let's suppose your
customer has 2500 employees who could conceivably be trained
during the period they are seeking to license your courseware.
Together you develop the following scenario:
| |
Number of
employees
|
Likelihood of
being trained
|
Weighted #
of trainees
|
| |
500
|
100%
|
500
|
| |
1,000
|
50%
|
500
|
| |
500
|
25%
|
125
|
| |
500
|
0%
|
0
|
| |
|
|
|
| TOTAL |
2,500
|
|
1,125
|
Therefore, should your customer want to purchase a right-to-copy
license, your go-in position might be the amount you would
charge for 1125 users under your standard per user method
-- less your standard volume discount and any savings you
would realize from not having to provide physical training
materials.
But, life isn't usually this easy.
Suppose your customer wants to
substantially customize 50% of your course content, and
leave the rest on the cutting room floor. If this is the
case, it may make sense to factor the weighted number
of trainees by the percentage of your content the customer
is actually benefiting from. Let's say you and your customer
agree on a content usage factor of 40%. Given this scenario,
you'd complete your per user pricing equivalent as follows:
| |
Weighted #
of trainees
|
Course content
utilization
|
Weighted
trainee value
|
| |
1,125
|
40%
|
450
|
If you and your customer can't agree
on how many employees will actually wind up benefiting from
your courseware and what percent of your course content
will actually be utilized, consider accepting your customer's
estimate. Remember that constantly evolving business conditions
mean that many training intentions never bear fruit. So
there's always a chance your customer is paying you for
training that will never take place at all!
- Evaluate Threats
Try and feel out your customer
as to what they will do if you aren't able to work out
a mutually satisfactory right-to-copy license arrangement.
Then come up with your own sense of your customer's options
and alternatives in conjunction with your account salesperson.
If you conclude your courseware
is uniquely suited to your customer's needs and they would
be hard pressed to come up with a substitute, then you
are in a pretty good negotiating position.
On the other hand, sometimes customers
ask for a right-to-copy license when they have been paying
you in a per user way for years and have acquired enough
subject matter expertise and instructional design savvy
(they think!) to easily develop their own course.
Or your customer may have sourced
15 comparable suppliers who are eager to give away their
courseware if it means getting a toehold in the account.
In either of these situations,
logically factoring your standard per user pricing in
order to arrive at a right-to-copy price is not likely
to clinch the deal. So you will need to add additional
value to help you justify your price -- or you will need
to satisfy yourself that there are excellent strategic
reasons for caving in. Otherwise, your wisest move is
to pass.
A while back a customer offered
to pay one of my clients $250 -- a measly 50 cents per
user -- for a perpetual right-to-copy courseware license.
"What will you do if we don't go along with your offer?"
my client asked. "Then we'll just keep on copying your
courses for nothing, like we've been doing all along"
responded the customer.
If you're up against a blatant
or implied threat to illicitly copy your material, your
CEO should have a courteous but frank discussion with
your customer's CEO on copyright infringement and its
consequences. In my experience, most senior people are
honorable folks who will take action on your behalf to
nip any potential abuses in the bud.
- Stay Connected
When customers seek right-to-copy
licenses, there's a temptation for training companies
to "take the money and run." Nothing could be a bigger
mistake.
Let's assume your customer is seeking
to license your courseware because they want to substantially
customize it and integrate it with other learning content
in developing an enterprise wide curriculum. Offer to
help! After all, nobody knows your content better than
you do, and you may well be able to persuade your customer
that paying you to do the work is more cost effective
than trying to do it themselves.
Also offer to help your customer
repackage your product to put their own stamp on it --
or to help them better manage and administer training
delivery.
By the way, don't try to frighten
customers into handing over their courseware customization
needs to you by making Chicken Little pronouncements like
this:
"Unsanctioned efforts to modify
our courseware will void any performance guarantees and
could lead to general loss of brain function among trainee
populations."
Customers will perceive this as
an insult and question your commitment to making the modifications
they need.
Finally, even if your customer
is adamantly self sufficient and doesn't take you up on
your offer to help, be sure to check in regularly on how
the training effort is going. Why? Because sooner or later
your customer is going to be in the market for a new training
solution. And you want to be in the picture to provide
it.
One way to make this happen is
to schedule periodic program reviews as part of the original
license agreement.
- Plan for Contingencies
Don't enter into right-to-copy
courseware license agreements that don't offer you the
ability to periodically recalibrate or, if necessary,
end the relationship. Why? Because circumstances can change.
For instance, you will need to
negotiate in advance what happens should you update your
courseware during the license term. Is your customer entitled
to the new material? Don't be too quick to say yes. Obsoleting
your own courseware is an excellent way to remedy a right-to-copy
deal that's gone sour -- or strike up a new deal that's
more in your favor.
Also try and negotiate some sort
of inspection process to help you monitor how widely your
customer is using your material and how well they are
abiding by any contractual limitations. Try and frame
this as a benefit to your customer and, indeed, use this
occasion to offer suggestions as to how your customer
can get more value out of your intellectual property.
Do be wary about offering right-to-copy
licenses of an unrestricted and perpetual nature based
on loose language and trust. What happens when your trusted
client leaves for another company? Suppose your customer
is acquired by a foreign firm that has a casual regard
for copyright and trademark conventions? Suppose your
customer decides to go into the training business and
sell a thinly disguised version of your own course against
you!
Finally, only diamonds are forever.
So do be sure that your right-to-copy license has a termination
date and that any options to renew are at your discretion.
