Have you ever wondered whether a learning agency might be able to help you achieve your priorities but weren’t sure whether you could fit it into your budget?
If so, then you probably know that reliable pricing information is difficult to find. No credible learning agency that I know of publishes pricing (nor should they as I’ll explain in a moment). There are price estimators out there, but I’ve yet to see one that comes anywhere near to reflecting reality.
The lack of pricing information can be extraordinarily frustrating. Yes, you can always ask for a quote from various agencies. But this requires that you have your project sufficiently scoped for them. When you’re early in the budgeting process, you may not have much in the way of scope to provide them. The most honest answer is the least satisfying one: it depends. The good news is that if you are aware of the things that price depends upon, it gives you some levers you can pull to adjust a price up or down.
Factor 1: Quantity of content
It goes without saying that the more content you will need, the more it will cost. Content quantity is usually expressed as seat time. Knowing how much content you need usually requires a bit of a guess. The reality is that for most learning goals, you will not have all of the time you would need to get everyone to mastery, so choosing a time frame is often, at least to some degree, arbitrary. Many clients and agencies just draw a line in the sand and pick a time frame that they feel is sufficient to get the job done.
Factor 2: The nature of the content
Qualitative factors that drive price fall into two categories:
1. The media being used (rich versus static media). Media choice is a big driver of cost. Media exist on a continuum with static media on one end and rich media on the other. Text is the ultimate static media. Adding visuals moves you further up the continuum. On the far end of the spectrum are video and animation, which cost the most to produce. Unformatted text will cost you the least, and the more graphical and dynamic you want the media to be, the more it will cost.
2. How interactive the course is (passive versus interactive). Some courses are passive, with learners largely reading, listening to, or watching something on screen. Other courses have lots of interactivity, with a fully immersive simulation being the most extreme example. The more interactive a course is, the more it will cost to produce.
Factor 3: Your beginning point
One of the most overlooked factors that can have a big impact on cost is where the agency is expected to begin. Consider these two sub-factors:
1. How clearly defined the problem is. If your starting point is a vague need, someone will need to do the work of translating that into something more operational. If you want the agency to work with you from this starting point, it will cost more — both because it requires more work and because it requires a much higher level of skill.
2. How organized the source material is. When you hire an agency, you have to supply them with the subject matter. Is this subject matter written down somewhere? How complete and organized is it? One of the biggest sources of value you can get from a learning agency is pulling together disparate content into a coherent whole. But it takes time and effort.
Factor 4: Who is doing the work
1. You versus the agency. Some elearning agencies don’t do the writing or even the storyboarding on a course. Others handle everything from end to end. Naturally, the more work you do, the less the agency should cost.
2. An individual versus a team. Using a single resource can reduce the cost significantly. The trade-off is the overall level of quality. When you work with a team, you get a specialist doing each task, which increases your chances of getting “A” quality work across each task.
3. Onshore versus offshore. Agencies in countries with lower costs of living can usually produce work for much cheaper than those in the U.S. or Europe. In my experience, this works best when your problem is well defined, your content is fully built out and well organized, the topic is highly structured, and there is minimal discovery and consultative process.
Using this information to come up with a budget
Using the factors discussed, come up with a general description of the elearning you think may suit your needs — decide how rich the media should be, how interactive, how much seat time, etc. Better yet, come up with two or three options, one for the high end and one for the low end. Then provide these options to a couple of agencies and ask them to give you quotes. Don’t worry about taking the time of these agencies despite your not being anywhere near the point at which you would buy their services. Most agencies will be glad to know you are considering them and eager to have a new contact in their list.
