After two years of flat results, market for training seminars expected to grow 15%

After two years of flat results, market for training seminars expected to grow 15%

EXCLUSIVE: Buoyed by improved economic conditions and more sophisticated, targeted marketing campaigns plus interest in onsite delivery, providers of training seminars are expecting to achieve growth of about 15% on average in 2004 after two years of flat performance.

Vendor executives contacted by LLMR cited courses covering leadership and communication skills as being most in demand. The maximum price for a one-day seminar has remained under $200 per person, making it more difficult for for-profit vendors to make money on them due to rising postal costs from bulk mailings.

The three largest providers–National Seminars/Padgett-Thompson (Kansas City, Mo.), Pryor Resources/CareerTrack (Overland Park, Kan.) and the American Management Association (New York)–are all nonprofit organizations and thus receive discounts on postal rates.

While many companies flocked to e-learning over the past few years as training budgets were pared to the bone and cost was the chief concern, an increase in available funds has given buyers more flexibility in terms of mixing traditional and online training delivery choices.

“When we look at company proposals from our franchises, about a year ago every second or third proposal seemed to require some type of an e-learning component,” said Dave Fagiano, chief operating officer of Dale Carnegie Training (Happauge, N.Y.). “Now, we’ve seen a dramatic decrease, to the point where it’s maybe every sixth proposal.”

Fagiano said Dale Carnegie is a relative newcomer to the seminar business, introducing one to three-day sessions four years ago, in addition to its traditional eight- and 12-week programs, based on demand from time-crunched customers. Launching the seminar business was part of Fagiano’s mission when he joined the firm in 2000. While he would not disclose specifics, Fagiano claimed the segment has been doubling every year, and now represents about 10% of Dale Carnegie’s sales.

Vendors say they are seeing greater growth in the sale of on-site seminars as opposed to public sessions, as customers prefer this option to traveling for training. Also, on-site delivery gives companies more options in terms of program customization and tailoring.

Anver Suleiman, a principal at investment firm Luntz-Suleiman & Associates (New York, St. Petersburg, Fla.), said the strong on-site business is a good sign for vendors for two reasons: it’s more profitable due to lower overhead costs, and it leads to greater propagation within a client company.

“There’s also a lower marketing cost, because if you send out between 500 and 2,000 brochures to get one person in a public seat, that one person may decide to have 20 people trained at a company,” Suleiman said. “You generally end up doing more on-site sessions for that business, as they look to invest in various topic areas.”

While seminar providers have been augmenting their traditional bulk mailings with e-mail campaigns, it is still a small percentage of the overall direct marketing mix. They have had some success with e-mail blasts to existing customers, but campaigns using rented prospect lists are generally unfruitful due to the annoyance factor, as people already find their inboxes crammed with tons of offers.

“[E-mail] is very cost-effective, but it certainly won’t replace the volume we can get from regular mail,” said Mike Hays, president of Pryor Resources. “As for outside lists, we just don’t want to do that–we don’t want to be a spammer.”

Responding to customer demand, AMA has just begun offering its project management program in a blended format that augments instructor-led seminars with online learning resources that allow students to review difficult concepts or explore the topic further. This includes original content, simulations and case studies.

Patricia Leonard, executive vice president of U.S. management education for AMA, said both its on-site delivery and public seminar business has been picking up this year. In addition to the better economic picture, Leonard said, buying decisions are being driven by the realization that companies need to keep current employees up to speed on critical skills even as they look to add staff for growth initiatives.

“We’re seeing an uptick not so much in the fact that companies are hiring a bunch of people who need training, but in companies that are having difficulty finding the right kind of people to hire,” Leonard said. “While they continue to look for those people, they need to provide training for existing staff, because they can’t wait on initiatives or on tackling a particular opportunity or challenge.”

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COPYRIGHT 2004 RR Bowker

COPYRIGHT 2004 Gale Group