Case study · Strategy · Online education
An online education company: from sales growth to a profitable subscription model
A company with a strong community and a recognisable brand was selling more and more, but didn’t know which products were actually profitable. After a team diagnosis and 3 days of workshops, the board received a strategy for 2022–2025: a new subscription model, an offer in 3 price segments and a target of 20% operating margin.
Situation and goal
Revenue was growing, profits weren’t
The client is an online education company serving individual customers: courses and programmes on a subscription basis, an online store with physical products and a publishing business. Strengths: high-quality products, a large and engaged community and the founder’s recognisable brand.
However, the diagnosis showed a company going through “growing pains”. The loudest message was: “the company’s revenue is growing, but its profits aren’t”. Only 8% of respondents agreed that the company sets specific revenue and profitability goals. There was no budgeting or controlling, the margins of individual products were unknown, and some advice to customers was provided free of charge “on the side”.
On top of that, the post-pandemic market: a growing number of subscription platforms, copycats, information overload and smaller household budgets. The owners’ goal: profitable growth until 2025, with an operating margin of 20%.
What we did
Four stages – from diagnosis to a new business model
Organisational diagnosis
- Survey of growth barriers (53 people) and organisational efficiency (51 people)
- Growth barriers at 30.8 points – the “very serious problems” zone, vs. 23.1 on average across more than 700 Polish companies
- Efficiency at 3.10 out of 5 vs. 3.57 on average in Poland – management systems and financial management were the weakest
Market, competition, trends
- The impact of the pandemic, digitalisation and the subscription model on the education market
- Competition: specialist platforms, copycats, foreign players
- Trends: personalisation, microlearning, communities, digital products
Strategy workshops
- 3 days of workshops with the owners and management team
- The foundation of the business: a definition of the business, a mission with a measurable goal for 2025, a core strategy
- An offer in 3 price segments (economy, medium, premium) and product leadership in subscriptions
Implementation plan
- 20 initiatives with SMART goals, priorities, owners and start dates
- Sequence: first stable finances, then market knowledge, subscriptions, sales and performance measurement
- Milestones: strategy approval, implementation team, monthly and quarterly monitoring, annual update
Results
What the board received at the end of the project
- A 2022–2025 strategy with a measurable goal: revenue growth and an operating margin of 20%.
- Priority no. 1 – stable finances: budgeting, controlling and a tool for monitoring product margins.
- A new product model: assigning products to 3 price segments, a new subscription platform, rules for introducing products with a profitability assessment and a life-cycle plan.
- Sales and customer relationship tasks: needs-based segmentation, personas, cross-selling, CRM, community engagement and strategic partnerships.
- Management changes: a role-based structure, a planning and performance measurement system, development of management skills.
Takeaways for your company
What worked in this project
Without financial goals, growth is blind. When no one knows how much each product earns, the company sells more but doesn’t earn more.
A subscription needs a plan, not just a platform. Price segments, “door-opener” products and communicating the change to customers are as important as the technology.
A community is an asset that has to be managed. Customer loyalty went into the strategy as a separate goal – with an owner and an action plan.
Who led the project
Strategy Partners expert
Damian Rusiecki
Founder and Managing Partner of Strategy Partners. One of the advisers leading the project – the diagnosis, strategy workshops and implementation plan.
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