How to demonstrate elearning ROI in the most relevant way

Are you measuring ROI of your elearning? Demonstrating value has always been an aspirational battle for L&D teams. It’s often talked about, but rarely done. But it doesn’t have to be hard, and finding the right measures for your organization will pay off (literally!). In this post, we share new ways to think about ROI as part of a people-centered approach to elearning, and suggest six techniques you can use to prove the value of elearning to your organization.

How to demonstrate elearning ROI in the most relevant way

Why bother measuring the ROI of elearning?

Elearning, like all corporate training, is highly people-dependent and can be difficult to assess. A simple financial calculation just won’t cut it. Traditional learning management systems have struggled to provide evidence of effectiveness, so it’s easy to see why many L&D teams are resigned to not being able to prove their value.

But the great news is, the industry’s moved on. Limited LMS data is no longer the only option. Modern authoring tools, in-depth learner analytics and even sophisticated xAPI integrations mean that an ROI calculation that measures human engagement is achievable.

Traditional ROI calculations for learning

A traditional ROI calculation takes the benefit (or return) of your investment and divides it by the cost (or investment) you spent. So, for elearning ROI, it’s the positive financial outcome your training program achieves divided by the amount you spent on the program. If you multiply this by 100, you’ll see your ROI as a percentage.

How to demonstrate elearning ROI in the most relevant way

Sounds simple, right? And it can be, if your online training has a tangible goal that can be measured financially. This might not be immediately obvious, but if you ask yourself, “How will this training program make or save the business money?” you may well reach a financial goal.

For example:

  •  Elearning for sales staff on building rapport.

Better rapport > stronger relationships with the prospect > a better understanding of their needs > more sales.

The increase in sales figures would be the learning program benefits.

  •  Leadership elearning for junior staff to prepare them for potential promotion.

Improved leadership skills > more internal candidates for promotions > fewer external recruitment campaigns > recruitment costs saved.

The savings in recruitment costs would be the learning program benefits.

  • Compliance training on handling customers’ data

Compliant employees > reduced risk of customer data issues > fewer (hopefully zero!) costly investigations or fines

The savings from not paying fines would be the learning program benefits.

Find an ROI calculation that’s right for your business

As satisfyingly simple as these financial calculations are, they aren’t always applicable or appropriate. They certainly aren’t the only factors that contribute to elearning ROI. After all, there’s value in the learning experience itself as well as the results it’s correlated with. Your ROI methodology can take other measurements into account, too – ones that represent what’s valuable to your organization.

Take a look at these alternative ROI measures we’ve seen our customers using. Which would prove value the most in your organization?

Speed to market

For online training providers, getting new products out before the competition is critical, so speed to market is a true measure of value.

Try measuring the amount of time it takes to get from new concept to product on the virtual shelf. (This training provider saw huge returns from their approach to elearning.)

Virality

Many large organizations are focused on learning culture – creating an environment where learning is voluntarily accessed and shared.

Try measuring the number of shares a module gets, or comments left by learners.

Time spent authoring

For any L&D team, particularly if it’s serving a large organization, being able to author a new elearning module quickly is hugely valuable.

Try measuring the amount of time it takes you to turn your storyboard into a live module.

Time spent learning

With all the focus on cost to produce, it’s easy to forget that the time it takes your audience to learn is time not spent “doing the job.”

Geographical spread

Global organizations are often trying to reach audience groups in multiple locations with a consistent learning experience.

Try measuring the number of countries you reach or languages you deliver your module in.

Learner feedback

The ultimate measure is, of course, your audience! How useful they find your elearning is crucial to any impact you hope to see from it.

Try measuring learner feedback through quick ratings at the end of each learning experience.

Where can you find data to measure these ROI alternatives?

A combination of quick surveys to gain qualitative data and quantitative learner engagement data from your authoring tool or LCMS should provide a wealth of information.

This example of Elucidat’s analytics dashboard shows how learner engagement data can play an important role in measuring elearning ROI:

How to demonstrate elearning ROI in the most relevant way

Making smart investments

Some investments, such as a learning management system or elearning authoring tool, are long-term – but each project also has its own, specific short-term investment you can control. So an effective way to improve your ROI is to challenge the investment you make at the outset.

Questions to ask yourself:

  • Does the project need to be a bespoke learning experience, or could you reuse an effective structure or design from a previous module to make it more cost-effective?
  • Do you need to outsource the project to an elearning agency, or could you use (or purchase) an authoring platform to create a similar end result? You’re likely to make back the cost of an authoring tool from the savings of one or two outsourced bespoke projects.
  • Do you need an instructional design expert to work on your module throughout, or could a subject matter expert script into a template that your instructional designer creates?

Some elearning projects definitely justify a significant investment. Using a set of criteria to identify the ones that do and challenge the others, you could see your investments decrease and your ROI improve as a result.

Final thoughts

Kirkpatrick’s model for evaluating training places ROI as the pot of gold at the top of the evaluation pyramid, and much of the L&D community still views it as a dream to chase rather than a reality to measure.

While it is admittedly difficult to prove direct causation between elearning and a change in performance for individual elearning programs, it shouldn’t be difficult to demonstrate a correlation. And when human factors are involved to the extent that they are in learning, consistent correlations and additional ROI measures should be more than sufficient to prove the value your team contributes to your organization.

Take it further

Take a look at these case studies of organizations who have delivered business ROI through their elearning:

ROI: One of the six pillars of people-centered elearning

This blog is part of a series focused on the six pillars of people-centered elearning. We’ll be delving into each pillar to share tips and strategies to ensure your elearning projects deliver real-life impact.

Learn more and download the 25-point checklist for people-centered elearning.

people centered elearning checklist

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