The return on investment (ROI) for a learning management system comes down to how your business and its bottom line are impacted by your training programs.
When introducing a new LMS, this can look like immediate cost savings (like fewer travel expenses and lower administrative costs), and can cut down on employee turnover, time spent in onboarding, and much much more.
Your LMS ROI is key for your business because it brings back dollars and time to the business that otherwise might have been wasted (bet your boss and your boss’ boss would love the sound of that). So, you’re trying to build a business case that proves your LMS investment is actually going to be cost-effective and revenue generating for your business. But how do you prove it?
There are a few things that make up the ROI of your LMS, and they’re all here for you.
#1. New revenue generation 💰
This is one of the easiest ways to prove the value of an LMS. Being able to extend the reach of training to partners, customers, or members is one of the ways LMS solutions drive positive effects that turn into a funnel of untapped revenue.
By offering additional material or services through an LMS, you’re able to unlock untapped revenue and engage multiple audiences to drive more cash flow. The LMS you choose in this case, though, is especially important. You need to make certain that when people are coming in for sales training, new product training, or training on your offerings, that people have the best experience. This unbeatable experience will ensure that they continue to see value in the partnership or business relationship.
#2. More members equals more money 🤑
Elevating your brand and what you can provide your members with is essential to growing revenue.
Implementing a new LMS can increase the satisfaction and the perceived value that members get out of their business relationship, and can even attract new audiences. If your members are trying to monetize e-learning but are not getting a grade A selection of content or a wonderful learner experience, this could be where you get to step in. Member training, when done well, can easily make up for the cost of your LMS, and then some.
#3. Data maintenance costs 💸
The reason the cloud has so much clout (buh-dum-ts) is because the cloud makes dealing with data way easier. This is because when an LMS is a cloud-based system as opposed to an on-premise solution, the vendor keeps hold of all the data.
Older and more dusty solutions require extra resources that are devoted to the maintenance of this LMS data, instead of it just living easy and breezy in the cloud. Fewer people and less hardware are needed to upkeep data, which means a reduction in maintenance costs for you!
#4. Training expenses 📚
DIY is all fun and thrifty until we’re talking about training efforts, because in this vain it can actually make training more expensive (yikes).
For organizations still doing some or all training in-house, the cost adds up quickly (and it’s not cheap). Paying for physical training materials, the distribution of those materials, and instructors to facilitate training for folks results in a lot of dollar signs.
To cut these costs, you need an LMS that allows you to create courses, store and replicate materials, quickly send them off to the relevant parties, and host training sessions and recordings that can be stored and re-watched. For example, instead of paying someone to give the same lesson eighty-three times, they can give it just once, while it’s recorded. They can then focus on other areas of the business where they’re needed, and your organization benefits from them using their time more wisely. Win-win!
#5. Travel expenses ✈️
As much fun as traveling on someone else’s dime can be, organizations do better financially when they are able to cut out unnecessary travel at large (as long as it doesn’t harm the business).
When you have workforces that are mostly or entirely remote, or offices that are globally spread, training options that are available on-demand are easier and cheaper to maintain. With a solution that doesn’t require airfare, per diem, hotels, meals, and other expenditure, the savings pile up fast!
#6. More bandwidth for your buck ✅
This is where we talk about getting you more for your money.
We’re all familiar with days on the job that are so fast-paced that it just feels like there aren’t enough hours in the day to get it all done. With online training that fits the convenience of the learner, people can fulfill their training needs from home, on the way to a huge on-site sales pitch, or even in the break room at the office.
Making e-learning courses available for whenever people can squeeze in relevant training content means that you’re stretching and optimizing employees’ time, bandwidth, and productivity.
Whether it’s on their work laptop, their home office desktop, or in bed on a mobile device before bedtime, training courses that are easy to access give you more from your talent that you’d otherwise miss out on.
#7. Time savings ⏱️
An LMS that is highly collaborative makes the most out of subject matter experts.
Learning socially is a huge part of how we cement new information. Sites like YouTube have been super influential on the way we learn anything from quick fixes, to languages, to in-depth projects – we’re used to looking to other people when we need some guidance.
On the job, people constantly tap more tenured employees on the shoulder for advice or feedback. An LMS that allows subject matter experts to contribute their knowledge to multiple audiences at once (on their own time), keeps people learning from each other without the need for in-person meetings.
Additionally, your people are learning from knowledgeable and trusted sources who are familiar with your brand instead of going to Google.
#8. Reduce your turnover 🥞
When people aren’t growing or advancing towards something, they start to feel stagnant. This is usually when they start to explore new job opportunities.
Keeping people invested in their personal and professional development, and showing that your organization is invested in it too, is what keeps people around for the long haul. eLearning Industry affirms that “employee development boosts employee satisfaction and workforce productivity, and reduces turnover”. They’ve also emphasized that not only does employee training help reduce turnover, but that employee development is the most pivotal secret ingredient when you’re trying to reduce turnover.
Losing talent, especially top talent, is very expensive. You lose their productivity and contributions until a replacement is found, and then you have to wait for the replacement to fully ramp up. And that’s just the beginning. Why go through the whole rigamarole of losing quality people when there’s an easy way to get them to stick around? Training initiatives are the key to making people feel accomplished and affirm that they’re going somewhere positive with your organization.
#9. More time on high-level strategy 🚀
Learning technology makes online learning way easier to stay on top of because it automates a lot of the job.
The right LMS can automate the creation of personalized learning paths, pull real-time reports, send notification reminders, and enroll users, among many more. With less time and human power devoted to keeping training afloat, support costs (that would normally need to be funneled towards LMS admins) go down, leaving admins to focus on high-level strategy.
#10. Higher productivity from talent 📈
World-class training and course offerings help people reach peak productivity and high-performance faster. Partner training, sales training, customer training, onboarding, and regulatory compliance all have that in common. They all need people to get a job done, get it done quickly, and of course to get it done well. Organizations that invest in quality learning reap more from their talent with programs that make it easier for learners to succeed.
Your takeaway 🤔
All of the things on this list have revenue attached to them. Either revenue that’s being lost that could be saved, or revenue that’s not being tapped into yet that could help grow your organization.
The goal is never to just break even – you want to grow profits and stop spending unnecessary time and money on things that bring no value. Not only does revenue generation from an LMS more than offset the original cost, but it’s where growth happens – and believe us, it’s no small pocket change.