As businesses continue to adapt in the face of today’s great economic challenges, budgets are tighter now than they have ever been. Things like training, both on and offline, can fall into the “nice to have” rather than “must have” category when it comes to budgetary planning.

So if you’re a manager, you’re going to have to prove the value of an online training program before being able to invest in one. Theory is great (who doesn’t want to believe in the power of education when it comes to increased job performance?), but in today’s economic climate, you need numbers and analytics to get the company  behind your decision to invest in elearning.

One way to show the higher-ups a return on investment (ROI) tied to elearning is to use SMART metrics. 

What are SMART metrics? They are:

• Specific: Your metrics need to be targeted directly to the area you are measuring. When measuring customer satisfaction, for example, a specific metric would be direct feedback from the customer about how they feel about your company or products (e.g. on a 1 to 10 scale). An indirect measurement, like counting customer complaints, could end with misleading results.
• Measurable: The data you collect need to be both accurate and complete to be useful. In other words, you must be able to measure it. You have to know if hit a home run, hit a single, or struck out. Make sure you can turn your goal into something numerical.
• Actionable: Instead of trying to measure something overly-complicated, make sure your metrics will be easy-to-understand so you know how to make sense of the data and how to ultimately take action.
• Relevant: If you don’t need to know how long someone uses your product, don’t waste your time trying to measure it. It isn’t worth trying to measure everything if you don’t need the data.
• Timely (or Time-based): When it comes time to collect the data, you need to be able to retrieve it, otherwise it will be useless. And make sure there is an end point, a finish line to cross (e.g. increase sales by 20% by the end of the second quarter).

Obviously, we at BlueVolt believe in the power of elearning. But to take our beliefs further, we decided to collect our own SMART metrics to evaluate whether or not elearning can directly impact sales, proving ROI.

The results are quite powerful. For example, 81% of distributors in a BlueVolt survey said they sell more with online training.

We also found that distributors recommend specific products 2-5 times per day. If we average that to 3.5 recommendations per day at a 50% success rate for a $50 product from 500 employees, the impact to your daily sales could be $43,750! You can read more about this subject here.

Our metrics have also shown that providing learners with incentives has enormous benefits. Just how big? Our $BlueBucks program has increased online course attendance by 10 times, easily explaining the more than $1.5M in incentives awarded to our learners.

Here are a few other ways to measure the ROI of your online training program:

Decreased costs from minimizing:

• The amount of time, and thereby the cost, of managing training schedules
• Training-related travel costs and time
• Incident costs from poorly-trained employees
• Employee turnover costs by providing better training and development— did you know continuing education is the second most important reason employees stay in their jobs?
• IT costs when using an online Learning Management System versus internally managed software

Increased revenues from:

• A quicker and more efficient sales force
• Higher customer satisfaction

It’s important to note that while metrics are extremely useful to help justify ROI, they don’t paint the whole picture when it comes to the benefits of elearning. To some degree, ROI will not perfectly reflect whether students enjoyed the training or not, or the extent to which the students’ personal objectives were achieved. No matter how great your training program is, if your students aren’t happy, you won’t have a good ROI. At BlueVolt, we have found that most students enjoy taking courses online because of the flexibility and ability to customize learning that fits into their own schedule and personal learning style. And with nearly 1 million online courses successfully delivered, you don’t have to just take our word for it!

Interested in learning more about ROI and online learning? Check out these articles:

http://www.fastrak-consulting.co.uk/tactix/Features/tngroi/tngroi.htm
http://elearningtech.blogspot.com/2007/10/roi-and-metrics-in-elearning.html