the roi of online training: how orgs are moving online

sponsored by Quantum Leap Marketing, Inc.

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An Osterman Research and Quantum Leap Marketing White Paper

Published April 2011

SPONSORED BY

sponsored by

The ROI of Online Training:

How Organizations are Moving Online

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sponsored by Osterman Research, Inc.

P.O. Box 1058 • Black Diamond, Washington • 98010-1058 • USA Tel: +1 253 630 5839 • Fax: +1 253 458 0934 • [email protected]

www.ostermanresearch.com • twitter.com/mosterman

The ROI of Online Training Revealed: How Organizations are Moving Online

©2011 Osterman Research, Inc. and Quantum Leap Marketing, Inc. 1

Executive Summary Small and medium-sized businesses (SMBs) are working smarter and getting more from their training resources with online training. They are getting more return-on-investment from online events vs. in-person events today and plan on increasing their use of online training in 2011. Live Online Learning – one-to-many virtual events delivered online for training purposes – has changed the way organizations educate and train employees and customers so that any business or organization can create a training program that matches those of organizations with much larger budgets. WHY ONLINE TRAINING FOR ROI? • Save time and money in training budgets • Educate employees and help increase productivity • Nurture or educate students, existing clients or prospects, and • Create training sales and revenue.

For this white paper, we surveyed small and medium-sized businesses and organizations in a variety of industries about their use of online events. To qualify, these SMBs had to have a maximum of 500 employees and be conducting online training events and/or in-person training events of some kind. This survey was conducted jointly by Osterman Research, Inc. and Quantum Leap Marketing, Inc. and was launched and completed in the final quarter of 2010. The survey population consisted of 68 participants, of whom about 69% are actively using online events and 81% are using in-person training seminars or executive breakfasts focused on training. This represents a significant experience base for online events. Survey participants came from a diversity of industries and three in four were from North America, with an average organization size of 131 employees. KEY FINDINGS Key findings from this survey include: • The use and popularity of online training is growing among smaller organizations.

For example, use of training online by smaller organizations is expected to increase by 29% in 2011.

• Traditional in-person training events will continue to be a strong part of programs for smaller businesses in 2011.

• Smaller organizations get a much greater “bang for the buck” with online events. While organizations put the nearly the same amount of effort into promoting and delivering quality content for both in-person and online events, online training simply reaches more attendees and costs less per attendee. The typical organization averages nearly seven times more attendees for online training versus



training seminar. And, the cost per attendee is eight times more for an in-person training.

• Regardless of the type of event, social media use for promotion and engagement is on the rise: 64% of the organizations surveyed will increase their use of social media during 2011.

Let’s take a look at the key findings of the survey of SMBs to get a sense for what’s working in training events today, and how training events compare to in-person events.

How SMBs Are Using Training Events INDUSTRIES SURVEYED As shown in the figure below, the survey pool represented a wide variety of smaller industries and organization types. Services firms, including high-tech, low-tech, and financial services made up 40% of the respondent base. Education and manufacturing were 13% and 10% of the pool, respectively. “Other” represented 24% of the firms surveyed.

Industries Represented in the Survey

21%

15%

13% 10%

6%

4%

4% 1%

24%

Services - high-tech

Financial services

Education

Manufacturing

Healthcare

Government

Services - low-tech

Transportation

Other

Survey Insight: The typical organization averages nearly seven times more attendees for online training versus an in-person training seminar. And, the cost per attendee is eight times more for an in-person training.



IN-PERSON TRAINING EVENTS WILL REMAIN STRONG As shown in the figure below, use of in-person training events will remain strong and is actually projected to be up in 2011. Online training events also remain on the upswing, and will increase about 29% in 2011. Number of Training Events in Which Organizations Will Participate 2010 and 2011

13.2

14.5 13.3

17.1

0

2

4

6

8

10

12

14

16

18

2010 2011

In-person training seminars or executive breakfasts

Conducting training Webinars

Survey Insight: Smaller businesses and organizations of all types are taking advantage of the benefits offered by Training Online. This is a clear indication that online events are now part of the mainstream event mix.

Survey Insight: Projected use of training events of all types will continue to be strong in 2011. Training events are attractive for small businesses because they are measurable and usually tied to increasing revenue, improving employee productivity, or decreasing HR risks. These are desirable attributes which training departments are looking for today. And, as the overall business climate is expected to improve in 2011, we would expect more money invested in training.



Costs for Various Types of Events LABOR INVESTMENTS The survey pool estimated that when total “person-power” was factored in, about the same amount of time goes into planning and participating in the different types of events. That is, an in-person training takes roughly the same amount of time as online training in terms of planning and related activities. Mean Person-Days Spent Planning for and Participating in Various Events

3.4 3.3

0

1

2

3

4



Survey Insight: Today’s SMBs take the same care to prepare for and deliver online presentations as they do in-person ones. This means the quality of the content and the event experience is likely to be similar for audiences attending events, regardless of media. It also implies that the quality of the online delivery mechanism – the speed of the interface, the ease of accessing the session, the variety of content that can be presented, etc. – will be key determinants for online training success in the future.



SIGNIFICANT SAVINGS: OUT-OF-POCKET EXPENDITURES As expected, the survey pool estimated that external expenses are greater for in-person events than online ones. An in-person training event costs about 23% more than an online training, with the quoted savings roughly the cost of a securing a typical physical location for the event. However, as you will see in the future chart, given that more individuals can be trained via the online model, an in-person event costs much more per attendee. Out-of-Pocket Expenditures for Various Types of Event Expenditures per Event

$2,804

$2,272

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000



Survey Insight: Today’s smaller organizations save significant dollars with Training Online versus other events. These out-of-pocket costs are relative easy to track and compare. Thus, the pressure is on organizers of in-person events to justify their additional cost.



The Effectiveness of Various Types of Events The survey offered few surprises in terms of the average audience for each type of event. Online trainings offer reach to a potentially larger audience for organizations. In-person events are likely to offer a high-touch environment to the smallest pool of attendees. Mean Number of People in the Audience per Event

Online training offers nearly seven times the reach versus in-person training events, although it is important that results can vary widely. Note that the general reach of online events is enhanced by the ability for trainers to easily record the events and the convenience to trainees of watching events on-demand. This is especially important for any ‘required’ training for employees and customers alike.

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In-person training seminar attendees

Training Webinar attendees

Survey Insight: The estimated reach of online training events is nearly seven times that of in-person ones, clearly one of the biggest benefits of leveraging this medium for training. This reach is enhanced through the ability to easily record training sessions for on demand viewing.



THE BOTTOM LINE: WHAT IS THE COST PER TRAINING ATTENDEE? As expected, when both time (at a fully-loaded cost of $38.46 an hour) and out-of-pocket costs are considered, the survey pool estimated that it costs more to get a potential training attendee to an in-person seminar, while it is much less expensive to get in front of an online training attendee. Mean Cost per Attendee

The survey estimates that it costs roughly $71 to train an attendee in-person, but only $9 to train someone online: dramatically less than training an individual in-person.

Survey Insight: Clearly, for those smaller organizations that are cost-conscious or resource constrained, if their numbers match up with the survey pool, they must seriously evaluate any additional benefit provided by eight times the cost per attendee of in-person events over online ones.



SOCIAL MEDIA WILL BE USED HEAVILY Social media offers a tremendous opportunity for organizations holding events for both promotion and engagement purposes. Smaller organizations seem to have recognized this, given that the vast majority of survey respondents plan to increase their use of social media for various types of events during 2011. Plans for the Use of Social Media for Promotion or Engagement for Events Late 2010 to Late 2011

While 21% see no change in the usage of the medium, more than six in 10 will increase their use of social media, with about one in six projected to increase use of social media in excess of 75%.

2%

21%

29%

13%

8%

16%

13%

We will decrease our use of social media

There will be no change over the next 12 months

We will increase it up to 25%

We will increase it 26% to 50%

We will increase it 51% to 75%

We will increase it more than 75%

Survey Insight: Small businesses see value in using social media for promotion and/or engagement of events of all types. Those skeptical of its benefits should take a second look at this medium.



VIDEO HAS PERCEIVED VALUE WITH TRAINING ONLINE We asked the survey group if video offered value in training online. Nearly 70% believe that the use of video in online training can improve the overall training experience. “Would the use of video in your training engagements improve them?”

Best Practices for 2011 BEST PRACTICES FOR ONLINE TRAINING IN 2011 AND BEYOND Whether one is new to online training in 2011 or an experienced producer just looking to “sharpen the saw,” any organization will be able to learn from what is working in small business online events. Here are some best practices to leverage in almost any training scenario. • Even if you are holding ‘required training,’ you are still competing for attention and

other uses for your audience’s time. So for all types of online training be sure to

Yes 70%

No 14%

Not sure 16%

Survey Insight: With increasing prevalence of video capabilities in online training platforms, this should help drive the adoption of online training as well as the perceived value delivered in the training events.



outline the benefits of your training program and any deadlines for attendance. Your best weapon in this initiative is to create an attractive title for your training, one that may even speak to the major benefit the training offers.

• When promoting your training, a dedicated email invitation will generally be the best way to reach your prospective audience and get them to register for your event.

• Most training platforms offer registration systems whose auto-reminder messages help boost attendance at your live events. Use this feature in your training program.

• Within your email invitation, think like a marketer trying to get action once the email is opened. This means highlighting when the event will take place, the key benefits to the audience of attending, and making it easy for them to register with a link to a registration or virtual meeting login.

• Be sure to take advantage of the tools available in the online training technology to both promote learning and keep the attention of your audience. You can use a materials library for easy distribution, polls, demonstration, questions, chat, and even video for better training results. And, many will want to take advantage of post-event tests or surveys to ensure training compliance, offer credit for classes, or to measure the amount learned in the webinar.

• Most organizations benefit from recording their online trainings to offer better

viewing convenience for the audience and to train more people per session. Consider the costs and benefits of live trainings and judge if some or all repeat sessions can be replaced by on demand recordings.

• Look for an online training solution that is integrated with eCommerce. This allows

the learner to register on the training provider’s site and receive a seamless experience of registering and payment. The net result is automated confirmation, tracking, and review capabilities. Additionally, the need to manage a third party payment processing provider is eliminated, allowing for more program resources.

• Smaller organizations often dedicate a higher percentage of revenues to training than larger ones. That means savvy smaller organizations look for a measurable return-on-investment from their training dollars and find savings wherever possible. Find ways to track investment and return from online training over time.

Recommendations Finally, here are some key recommendations for smaller organizations to get more from their training resources and programs. The survey suggests more smaller businesses will be doing online training for the first time in 2011. Others will simply be doing more online events.



Therefore, the key for any smaller organization is to recognize how best to exploit this opportunity to get more return on their training resources, and use the above best practices that all types of small businesses have found valuable. Here are some key recommendations for SMBs to get a better results from your training events. BENCHMARK AND VALIDATE TRUE EVENT COSTS (INCLUDING TIME) AND RESULTS TO START IMPROVING ROI It is a given that smaller businesses and organizations have fewer resources and budget for training programs than larger ones. And, many times their training budget is higher as a percentage of sales than it is for larger companies. Thus, it is critical to get the most from the limited resources available. This survey, as well as others we have conducted on actual costs and results from various types of in-person and online events, reveals the need to quantify the true costs (and also results) achieved from each event. An accurate benchmark of an organization’s spend and return will be the first step to help them get more from their event resources and improve the mix for higher return-on-investment. It is but a first step to understand the out-of-pocket expenses and number attendees at a given event. More advanced smaller businesses are tracking the number of days invested in the total event lifecycle and an average fully loaded cost of the employee days. Some companies are also creating tracking mechanisms to connect training events with cost savings or productivity increases. While general return-on-investment data is valuable, what can be more insightful is the ability to benchmark how each of the events performs on its own. Then, this data can be used to help improve the overall event mix, and help decision makers to seek ways to increase the return from individual events. CONSIDER MOVING MORE EVENTS ONLINE TO GET MORE FROM THE BUDGET AND OTHER RESOURCES A simple recommendation that most organizations can follow is to consider replacing a few of the weakest performing, or highest cost, in-person events with many online training events for much higher results from the event mix and fixed budget. TAKE ADVANTAGE OF THE POTENTIAL POWER OF DIFFERENT KINDS OF EVENTS AND ONLINE TRAININGS FOR DIFFERENT OBJECTIVES One of the benefits of online events is the ability to select the exact type of training needed to meet specific challenges. For example, online trainings can be used right after a new customer buys your product or service to reduce buyers’ remorse, lower returns, and increase customer retention. Or, they can be used as a revenue source or way of acquiring clients. Customers can be educated, up-sold, and resold. Small organizations would have difficultly tapping into all of this broad range of training options if they were limited to in-person events alone. Thus, online events open up new



opportunities to create the exact business benefit a small organization needs that may have previously been available only for organizations with much larger budgets. CONSIDER VIDEO FOR DEMONSTRATION, INTIMACY WITH ONLINE EVENTS Anyone who has grown-up in the past 50 years knows the power of television and now online video. We are generally a visual society, and so online events with video components, whether they are video recordings or speaker cams, can recreate the feel of an intimate, in-person gathering. In addition, event producers can draw on video’s power to show, demonstrate, and educate. USE SOCIAL MEDIA FOR PROMOTION AND ENGAGEMENT WITH EVENTS Social media offers new ways of reaching prospective attendees and engaging an audience before, during and after events. Obviously, if an organization has existing social media channels that can reach a potential audience, it can leverage this to drive registrations. And, even a simple Twitter conversation using well-publicized hashtags can encourage interaction during an event, or promote feedback and questions from the audience.

Authors BOB HANSON, QUANTUM LEAP MARKETING, INC. Bob Hanson is the President of lead generation and conversion consultancy Quantum Leap Marketing Inc., and creator of the Must-See Webinars™ success system. He has also published a recent guide to online lead generation, the “What’s Working Now in B-to-B Lead Generation Guide: Success with New Media: Webinars and Google Ads.” To get a free chapter of the guide “How to Create an On-Demand Webinar Program” or to request a no-obligation consultation on creating successful Webinars, email Bob at [email protected], call 617-901-6886, or go to www.yourcuttingedgemarketingtips.com. MICHAEL OSTERMAN, OSTERMAN RESEARCH, INC. Michael Osterman is the principal of Osterman Research, Inc., founded in 2001. Since that time, the company has become one of the leading analyst firms in the messaging and collaboration space, providing research, analysis, white papers and other services to companies like Microsoft, IBM, Google, EMC, Symantec, Hewlett Packard and many others. Prior to founding Osterman Research, Michael was the Vice President of Market Research at Creative Networks, a leading market research and consulting firm focused on the messaging and directory markets. Michael has also held positions with the SRI International Business Intelligence Center, Ryan Hankin Kent, ElectroniCast and Gnostic Concepts. His background includes research and analysis of various markets, including computer-aided software engineering, data communications, telecommunications, and fiber optic components.



About Citrix Online Citrix Online offers easy-to-use tools that enable people to quickly and securely connect online from anywhere, with anyone: GoToMyPC® for remote access, GoToAssist® for remote support, GoToMeeting® for online meetings, GoToWebinar® for web events and GoToTraining® for online training sessions.

GoToTraining is an easy-to-use online training service that allows you to move your entire training program online for more efficient customer and employee training. Hold unlimited online training sessions with up to 200 attendees from around the world – right from your Mac® or PC. Reach more trainees, collect real-time feedback, record and store your training sessions and more – all while slashing travel costs. For a free evaluation of GoToTraining, please visit www.gototraining.com. © 2011 Osterman Research, Inc. and Quantum Leap Marketing, Inc. All rights reserved. No part of this document may be reproduced in any form by any means, nor may it be distributed without the permission of Osterman Research, Inc., nor may it be resold or distributed by any entity other than Osterman Research, Inc., without prior written authorization of Osterman Research, Inc. Osterman Research, Inc. does not provide legal advice. Nothing in this document constitutes legal advice, nor shall this document or any software product or other offering referenced herein serve as a substitute for the reader’s compliance with any laws (including but not limited to any act, statue, regulation, rule, directive, administrative order, executive order, etc. (collectively, “Laws”)) referenced in this document. If necessary, the reader should consult with competent legal counsel regarding any Laws referenced herein. Osterman Research, Inc. makes no representation or warranty regarding the completeness or accuracy of the information contained in this document. THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT WARRANTY OF ANY KIND. ALL EXPRESS OR IMPLIED REPRESENTATIONS, CONDITIONS AND WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE DISCLAIMED, EXCEPT TO THE EXTENT THAT SUCH DISCLAIMERS ARE DETERMINED TO BE ILLEGAL.