How To Prove the ROI (Return on Investment) of Your Online Training Program

As a training or operations professional, you’ve probably faced plenty of questions regarding ROI (return on investment) from colleagues when evaluating an online learning initiative. You want to help them understand how supporting your learners with quality training can pay for itself with platform growth, reduced expenses and increased revenue.

It is actually not difficult to demonstrate since modern training softwares (like Northpass) incorporate tracking and reporting functions that go right to the heart of ROI metrics. Below we’ll look at five of those metrics, but the big picture to keep in mind is that successful online training program sprouts from a clear vision of the business outcomes you want to move the needle on.

Start by discussing your priorities with your colleagues for business goals, such as:

• Increasing conversion rates
• Reducing onboarding time 
• Increasing productivity after onboarding 
• Increasing profits 
• Boosting retention 
• Ensuring compliance 
• Increasing revenue 
• Improving satisfaction 

The objective is to drive performance on your priorities and business outcomes, so the training program should focus there and track the hard data needed to help you calculate the ROI of your online training program.

1. Online training makes your learners more proficient

Quite simply, training makes your learners more proficient at their job. By giving them training when and where they need it, you enable them to perform their work and to be successful. 

Uber and Lyft have attained phenomenal success because their drivers drive well, know the best routes to take and interact properly with their customers. They learn about important values and best practices through training that enables them to be excellent representatives of those brands. A great brand reputation exemplified by your providers only serves to bring more dollars to your bottom line. 

The best thing is, Uber and Lyft deliver the training to their drivers 100% on mobile devices because they know that's how their drivers consume their information. The focus and knowledge on their defined target learner helps them to craft their training to be perfectly tailored and aligned to their goals. 

In short, you want to help your learners know how to excel at the service they are providing, so metrics that track improved response times or lower cancellation rates can help demonstrate ROI. 

2. Online learning improves operational efficiency

Name any operational objective your organization aims to optimize — attracting more talent, decreasing onboarding time, getting new hires into the field — and you’ll soon realize the key to reaching those goals is through training. Accessible learning content within any platform helps your potential learners get comfortable, confident, and out into their role as quickly as possible. 

Here's an example from The Beginner's Guide to Creating an Online Training Program: Measure the Success of Your Program.

• Lead volume for new job applicants 
• Time taken to onboard a new worker 
• Turnover rates / retention rates 
• Changes in workforce size 
• Time to productivity 

• Ease of course access and navigation 
• Satisfaction of the topics covered 
• Relevancy and practicality of the content 
• Skills development and behavioral changes

3. Online learning fosters better relationships

Though online training platforms are digital, the interaction between who you are training and the people they will interact with on behalf of your organization is a very human one. At all times, your employees act as the face of your brand, its values, and its standards. These can be woven into and encouraged by your online training.

Using training to ensure your learners know your brand’s values fosters a better relationship with the end-user, the consumer. When the experience is good, customers are pleased and will give your organization high customer satisfaction scores. Happier customers are likely to use your product/services more and drive others to your company through positive word-of-mouth referrals.

Customer satisfaction is an early indicator of loyalty and increased customer lifetime value (CLV or LTV). So one great way to demonstrate ROI of your training program is to look at your customer satisfaction scores and the number of positive reviews before employees start engaging with training and to watch how those scores improve.

4. Online learning grows earnings

The ultimate success of a learning initiative is measured in increased earnings — for both the employee and the business. In traditional businesses, one common metric is revenue-per-customer, sometimes expressed as average customer value. Another metric companies typically measure is average earnings-per-employee. 

Instructional videos and brief learning modules influence earnings by imparting fundamental knowledge, but they also show ways your platform can make employees more successful. In addition to helping them grow earnings, online learning demonstrates your commitment to helping providers succeed and keeping them in the fold.

Since it’s more cost-effective to retain employees than to acquire new ones, training that keeps them engaged and succeeding reduces churn and increases profitability. When your organization develops and scales up an online training program, it starts driving this ROI metric.

5. Online learning reduces support costs

Expenses associated with support services are also definitively and measurably impacted when you introduce a training program for your employees.

By enabling your employees to become more efficient in the delivery of the service, whether it be a ride to the airport, house cleaning or food delivery, the demand for support services plummets. Once adequately trained, your providers have less need to reach out for guidance from your support staff.

And it’s easy to calculate this impact. If your support ticket total was 990 in the month before you launched the training program and 500 after, you can directly tie the training to the reduction in support costs. That all filters down to the ROI calculation.

The four kinds of LMS reports that help you monitor business results

With the five metrics to prove the ROI of your online training program in mind (as discussed above), you can set up reports in your LMS to continually measure the business results to calculate your ROI. 

LMS reporting is highly likely to give learning managers a headache, yet good reporting is one of the most important features in a learning management platform.

Case in point: Brandon Hall Group asked survey respondents to identify three things they didn’t like about their LMS. “Reporting features” was at the top of dislike list, yet the majority of respondents also said that when they choose a new LMS, they’re looking for solid reporting capabilities.

Part of the problem may be that learning administrators don’t know what data to pull from their LMS.

The “Not Taken” report

What if your learners aren’t taking your courses when they should be? Pulling up a “not taken” report can show you which customers haven’t taken certain training courses, for example.

While this information is useful for sales teams or customer success teams, it may be most useful for channel sales directors or channel marketing managers who are using the LMS to administer certification programs for channel partners and vendors.

As we’ve previously discussed, channel partners may feel they are too busy for the training you are offering. This LMS data can tell the channel sales director who hasn’t been taking it, and who is currently uncertified.

Relative course quality report

Which courses are more popular than others? Are more people taking some courses and not taking others? For example, do your live instructor trainings draw more learners than your self-paced learning?

By pulling this report, you can understand better where your instructional designer should be spending their time punching up existing courses and making them more attractive to learners. This can also tell you what sort of courses are a waste of time for you business to produce. This can also be an indicator of how well your marketing is working.

Learner participation report

Which learners are the most engaged? Who takes more than one course? Who takes courses only associated with a certain product? Who doesn’t complete any courses?

Learner participation is probably one of the most common reports pulled from LMS software. Pulling up a report on one individual will show you what courses that person has — or hasn’t — taken. It will show you who isn’t finishing their courses and whether they engage with certain elements of a course.

This kind of report is invaluable to a sales team who may want to see how engaged their customers are with your training. Using an LMS that integrates with a CRM like SalesForce, you can also track the relationship between learning and sales. Do customers buy more after training? This data can tell you.

This metric is also helpful if you’re trying to figure out why learners aren’t completing a course. By tracking learner participation, you can better understand when in a course students stop engaging. That metric gives you important information about both the learner and the course itself.

Learner success report

While knowing what your learners are doing is important, knowing how they’re doing is important. Learner success reports help you understand whether or not your learners are engaging with the resources in your course and how they’re doing on assessments.

This information may be especially useful for customer success teams, who can use this sort of report to send up a red flag when a customer needs assistance. Customer success teams may want to reach out to low-performing learners, offer them help with your products and keep them engaged with your business.

Used well, your LMS reports can help you monitor the business effects of your training. LMS reports can help you understand which learners are engaged with your courses and how that engagement affects their behavior as an employee, customer, or partner.

How to gather feedback to evaluate the ROI of your online  training program

According to the Association For Talent Development, “Over 90% of learning organizations conduct surveys to calculate the ROI of training.” However, McKinsey & Company states, “Half of learning organizations don’t even bother to keep track of participants’ feedback about learning programs”.

We gather learner data yet fail to utilize the information to improve our training programs. The key question is, which data should I collect and how should I use the information to confirm ROI on my training program?

To begin, there are four levels to evaluate training as according to Donald Kirkpatrick, Professor Emeritus at the University of Wisconsin:

1. The learner’s response to training

Are learners engaged and motivated?

2. Learning and retention

Do learners readily remember and recall the content?

3. Changed learner behavior

Does the training have a direct impact on learner behavior?

4. Business impact

Has the changed behavior improved your business?

To quantify the training impact, it’s best to gather learner data before the training, immediately after, and several weeks after the training is complete. These scores help measure learning before and after the training along with information retention.

Initial Survey

The initial survey is your chance to capture learner thoughts, emotions and behaviors about the training program. Use the survey to acknowledge their professional motivations and incorporate their goals into your session.

In the survey, consider asking the following:

• What would most aid you in achieving your professional goals?
• What challenges did you face at work last week?
• When do you think about the type of performer you want to be, what qualities and skills come to mind?

Measure What Participants Do

During the training program, you must measure what participants do, not just what they say about the experience.

Here's what you can measure: 

• Actively ask the employee how they’re doing.
• Periodically conduct a short test to check their comprehension and information retention.
• Observe if the employee enthusiastically taking part in the activities.

Ultimately, collecting this data will help you evaluate the entire training experience.

Extend the Training into their Day Jobs

After the training is complete, give a test and compare the results with your initial survey. Determine if the training was aligned with learner professional goals. To evaluate behavior change, observe the learner performing their tasks and responsibilities.

And consider the following:

• What can the learner now do in less time?
• By how much has their efficiency or productivity improved?
• What can they now do better than before training?

Determine the ROI

Ask yourself, how do I convert learner data to monetary values?

Since various training programs focus on improving the time required to complete tasks and responsibilities, the value of time becomes necessary for calculating ROI. Overall, the total compensation per hour provides a monetary estimate for the value of time saved upon training completion.

Finally, always ask what matters: how much of what employees learned have they put into practice?

Optimize your funnel, and measure along the way

You probably already understand that content that moves providers through a funnel — awareness, interest, application, onboarding and activation — is integral to their eventual success with your company, because it decreases costs and increases revenues. But, which of the these metrics resonate with you and your colleagues?

A good training platform will improve the efficiency of that funnel and also render key data about who is engaging with the content, how users are progressing and how fast, where they struggle and whether they’ve actually absorbed the knowledge.

There are many possible ways to measure the ROI in a way that matters for your business goals, but some of the metrics above — proficiency, efficiency, customer relationships, earnings and support costs — are a great way to get started. 

At the end of the day, your training improves your bottom line in various ways, some of which are hard to find. The more you look and the more value you discover, the more complete your training ROI will become.