The Milkshake Question: Training ROI Part 1

The Milkshake Question

What did your company hire your organization to do? This is known as The Milkshake Question which is explained in this video featuring Clayton Christensen.

The first step in any rigorous instructional design is understanding what the company stakeholders expect training to do.  Some call this Return on Expectations (ROE) since the evaluation of training has historically been a fuzzy science.  It was hard to quantify the value of training programs – or so some said.

(By the way,  Cathy Moore’s Blueprint methodology is an excellent resource for anyone wanting to get better at determining how effective training is going to be BEFORE time and money is wasted.)

Traditional Training and Business to Customer Training (B2C)

Traditional training has focused on performance improvement within an organization.  Using Kirkpatrick, the effectiveness of a training program can be measured in terms of behavioral changes.  If a learner has better performance after training, then the training is deemed successful.

But what about business to customer (B2C) training? Let’s use a software company example.  Previously, software was hosted on-premises in a company’s own data center.  Customer training for installed software as part of a purchase package.   For example, I managed the purchase and implementation of a learning management system for a Fortune 500 company.  $15K of training for employees was “thrown in” to sweeten the deal.  Our employees sat in a classroom and were trained on the LMS’s use.  B2C training was not necessarily marketing, but more of a sales tool.

Fast forward ten years or so.  Software companies are building SaaS apps and putting them in the cloud.  The Internet has enabled eLearning which reduces the cost of training by keeping workers at their jobs and making training available on demand, and marketers have figured out that B2C online training IS marketing.

B2C Training is Marketing

When a software company creates a product, educating customers on how to use it is supposed to generate more sales, increase brand loyalty, and provide – especially in the case of cloud computing – more and more usage of the “Lego blocks” of the product suite.  This is the ROI of B2C training for software.  “Conversions” can be tracked by product downloads, subscriptions created during training, tracking the adoption of additional technologies used, etc.   Now a training organization can quantify its business impact, immediately and over time.

If you also have an Evangelism Department, online training can be used to give bootcamp or hackathon event attendees prerequisite knowledge. It increases the likelihood that they will be successful at the event and therefore – make them happy.  Happy users of software are more brand loyal and will speak favorably of it to others.  Not new news.

B2C Learner Segments to Customer Segments

Categorizing customers is part of any basic marketing effort – as identifying the needs of learners is basic to instructional design.  For any kind of  training, there are generally two segments:

  1. The New Learner – a brand new learner who has very little knowledge, who is pre-career, or early career. Competencies are few and proficiency levels are low.
  2. The Experienced Learner – an experienced learner has mastered some competencies at varying proficiency levels.  They are often upskilling, or plugging holes in their knowledge.

Depending on the resources and operating budget available, the B2C learning organization may have to limit the scope of what they do – especially if the company sees the organization as marketing. The training organization will have to justify their existence, as usual, but the measurements of success change as do the learner segments.  They become:

  1. New Customers – learners who have never used the product before.
  2. Old Customers – learners who have used the product, or a similar product who now need to transfer knowledge from the old product or similar product to the new product or additional product features.

In part 2, I’ll discuss how a learning organization can organize and manage content so that it meets the needs of Learner Customers as well as reduce the cost part of the ROI equation.


Leave a Comment