In Defense of Instructure’s Sales & Marketing Budget

And why we don’t invest enough of our higher ed resources in marketing, outreach, and communications.

November 8, 2015

"...during the first half of 2015, Instructure brought in about $30.5 million in revenue. But the company spent $25.1 million on sales and marketing alone during those six months -- more than it spent on research and development ($10.9 million) and administrative costs ($13.9 million) combined."

From The Structure of Instructure, 11/5/15.

What was your first reaction when reading these figures?

I bet that there is at least a chance that you thought that Instructure is spending too much money on sales and marketing. This is a natural response. We all want dollars to go to research and development. We should want that.

My reaction to seeing Instructure’s sales and marketing figures was a bit different. What I thought was “good." This is just what Instructure needs to be doing.

You may be disagreeing with me (strongly). You may be about to point out how much money the for-profit education industry spends on “customer acquisition” (sales and marketing), rather than on teaching (faculty) and learning. And you would be right.

The point that I want to make is that, in general, we in not-for-profit higher education invest far too little resources into marketing and communications. In general, we do not invest enough time, money, or energy into telling our stories. We treat communications, outreach, and marketing (yes - 3 separate and distinct activities) as afterthoughts. 

In higher education we are usually pretty good at education. We are not so good at communications.

We think that we should be good at communications because we are experts in our academic disciplines. But communications is a different discipline, not one that can be mastered by common sense alone.

Communications professionals and marketing professionals (a different set of folks) are as expert in their fields as we are expert in ours. We would think it ridiculous if someone who had not spent years and years training and working in our discipline tried to go and do our work. And yet, we make this same mistake every time we try to craft and execute our own marketing and communications strategies.

The fact that Instructure invested so much money into sales and marketing tells me that they were doing what they needed do.  Instructure would not have achieved the critical mass that it has in the LMS market unless it had made those investments.   We may wish that this was not the case, and that all the money could have gone for R&D.  But that is not the world that we live in.

We are all better off with a healthy Instructure. The LMS market is better off due to the competition that Canvas created. 

We should not only be okay with Instructure’s sales and marketing spending, we should take this spending as something that we in non-profit higher education can learn from.

What do you think?



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