Calculating direct ROI from an LMS is a nearly impossible task. On one hand, you’ve invested a lot of money into a system that you believe will help onboard your reps faster – on the other hand, you’re unable to trace that to revenue because your reps are completing these learning paths. Maybe revenue is increasing, maybe it’s not– but either way it’s hard to say what part the LMS is playing.
In the industry a lot of common metrics are used in place of ROI or revenue impact. Adoption is popular, but there are a few reasons why this isn’t the metric you should be paying attention to. In this blog, we’ll break down why adoption doesn’t always tell you if you’re getting ROI on upskilling your reps, and give you other metrics that can help you better measure the ROI of your learning system.
What is LMS Adoption and why shouldn’t It be a focus
The term “adoption” is often used to measure effectiveness because it shows how much the tool is being used and is often easy data to get. But, the way adoption is measured for an LMS can differ– a few different ways we’ve seen this done:
- Measured by user activity throughout the year (logins, learning paths completed)
- Number of logins since the tool was introduced
- Feedback from users
Let’s take an example of why adoption statistics can sometimes be misleading: Your LMS has 100% adoption and all your reps are participating in learning paths as they are assigned, making it seem like this tool is adding value and training your reps to sell better. But, after a few months, you realize that reps aren’t booking any more demos than before and revenue hasn’t changed. Adoption shows that your LMS is working great, but the truth is that your reps are only taking the courses to satisfy the requirement and then never think about it again. And if reps are not actively engaged with the system or not using it to its full potential, then it might not actually be providing value at all.
At the end of the day, you don’t really want your team to just be using the tool. The purpose of an LMS is to train your team and make them better at their jobs, but simply logging into the platform doesn’t help them do that. So, while adoption is a good metric for measuring initial usage, it can’t tell you how effective the LMS is for coaching your reps or how it is affecting your bottom line.
So, if adoption isn’t the answer, what should you be looking at?
Better Metrics to Understand ROI of your lMS
In order to measure the effectiveness of the actual training and its impact on your team, there are a few other metrics that can give you better insights and help you better measure ROI:
Continuous Adoption
Instead of measuring initial adoption, continuous adoption takes into account the ongoing use of the LMS and reflects how the tool impacts your team over time. Helping you understand if the learning paths have changed the behavior of your team at all. For example, maybe they took a training on cold calling and are now getting 25% more connects per week, improving their likelihood of booking a demo. Although this behavior improvement may not be entirely a result of the LMS, these positive improvements and any revenue that follows can be linked to that learning path on cold calling.
Your LMS should also make it easier for reps to take trainings when they are most relevant, leading to a higher retention rate of learnings over time. Although it is still a difficult metric to tie directly to revenue, continuous adoption is a great way to look at how consistent usage of the LMS can result in positive behavior changes and more retained learning.
Sales "Readiness"
Sales Readiness is a catchall term defining how well your team is trained. However, readiness can also be a bit ambiguous because it is not taking into account other factors that might be impacting readiness, like coaching or sales enablement. You also don’t really want the success or failure of your sales team to be entirely attributed to the LMS.
While readiness might be ambiguous it can still be a good indication of how your team is benefitting from the LMS and how it is preparing them to close more deals. Watching sales readiness along with the continuous adoption metric, can help more closely identify what benefits or deals the LMS is responsible for.
Revenue
Like we said in the beginning, revenue is really hard to measure here. The simplest way to do this would be to look at revenue trends since adoption of the LMS. Similar to sales readiness, tracking revenue along with continuous adoption can show you how the LMS is impacting the bottom line and overall success of your organization.
For example, an uptick in revenue while maintaining continued adoption might suggest that more deals are closing because of consistent training in the LMS. Again, these metrics aren’t taking into account external factors that may also be impacting revenue, but can give you a better idea of how implementing an LMS is impacting your bottom line.
An Effective LMS Looks Different For Everyone
At the end of the day, there is no one singular metric that is going to tell you if your LMS is working. That’s because every team is different and a “working” LMS is going to look different for everyone. The best way to determine if your LMS is effective and generating ROI, is to combine these metrics to form a broader, comprehensive understanding of how this tool is affecting your company.
Success will look different for everyone and may not always come in the form of revenue. For example, maybe your team hasn’t closed any deals since adopting an LMS, but has drastically improved their understanding of the market, that’s a win that will bring even more benefits in the future.
