Sales Training

ForrTel:eLearning For Auto Retail Success

Mark Dixon Bünger Claire Schooley

Principal Analyst Senior Analyst

Forrester Research

June 28, 2005. Call in at 12:55 p.m. Eastern Time

Theme

Fast, efficient learning is good for business

Agenda

• Drivers for learning online or with mixed media

• Costs of using non-traditional learning approaches

• Technology required and benefits

• Case Studies: AutoNation, Toyota, and Volvo Construction Equipment

• Business case development

• Some vendors in the eLearning space

Auto retail needs to get smarter every day . . .

• New products

• New promotions

• Sales techniques

• Legal and regulatory requirements

• Customer service

• Maintenance, diagnostics, and warranty

. . . for thousands of current and new employees

• Auto dealerships employ 1,129,600 employees*

• Turnover averages 92% annually, highest in sales†

• Tech retirements increasing; 12,000-35,000 new mechanics needed annually (of 820k total)‡

* Source: NADA Data 2005† Source: CNW 2001‡ Sources: Automotive Youth Educational Systems (AYES), Association for Career and

Technical Education (ACTE), Bureau of Labor Statistics

There is a need for more learning

Tom Purves, CEO of BMW of North America,said dealers are clamoring for

"more training than we can actually provide.”

“Ford Motor Credit Co. will reassign about 75 salespeople to train dealership finance and insurance managers . . . Captive finance customers are 20% more likely to buy

another Ford; for lease customers, owner loyalty is 32% higher. Of Ford and Lincoln-Mercury retail customers,

59% signed up for vehicle loans with Ford Motor Credit.”

Source: Automotive News, February 07, 2005

So how do you do it?

1. Determine whether it’s a training problem

2. Build the business case on hard savings

3. Determine the need for an LMS

4. Evaluate proposals and make your choice

Determine whether it’s a training problem

• Why is the employee not performing?

Willing

Able Allowed

Aware

= motivation problem change compensation

= skills problem train!

= policy problem change rules

= information problem change communication

Tools for learning

Material

Books , Classroommanuals, instructionworkbooks

Read on own Attend class, discussions

Videos

Watch in viewing room

Self-paced eLearning; simulations

Work independently; interact with online content

On-the-job learning

Shadow and work with others

PDA

Review material just-in-time

Tracking

Database Database, LMS

Checklist LMS, LCMS, authoring tools, learning objects, competency mgmt. skill gaps, analytics

Database Self-reporting

Costs

Materials, duplication, travel, instructor, per diem, location costs

Expensive to develop; can’t update easily

High upfront cost of applications, infrastructure, content

Additional wages

Continual content updates

Scalability Not scalable Scalable Very scalable Not scalable Very scalable

Three delivery methods in a blended environment

Instructor-led training

Virtual classroom

Self-paced training

Determine the need for an LMS

• Number of learners

• Number of learning experiences

• Dispersed learner locations

• Record maintenance

• Certification

• Customer learning

Basic LMS Functionality

From: Managing Learning: An Essential Component To Business Success, September 2004

Common components of an eLearning integrated suite

From: Managing Learning: An Essential Component To Business Success, September 2004

Learning…Where it comes from and where it’s going

Classroom

On-the-job

Computer-based trainingIntegrated learning and work

Point APoint B

Point C

AutoNation(Case study)

Case Study: AutoNation “Knowledge Central”

“How are you going to train 28,000 people to perform standardized processes? . . . and there are thousands of new people every year.”

In the past

• Text-based, video, and classroom training• 16-20 booklets (one for each process) as well as VHS

videotapes. “A 6,000-page manual written by some marketing guy that nobody’s going to read.”

Now

• Created series of online courses covering wide range of standard operating processes

» CRM tools

» Inventory management

» . . . even “How to answer the phone”

• Launched with six modules in Q2; goal is 15 modules (60-90 minutes each) in 2005

• All employees, including legacy, will be retrained

The high points

• Vendors: Sparrow Interactive and ADP

“(ADP) have some pretty slick stuff. They developed an interactive module for their custom inventory management tool. They trained our people and they LOVED it.”

• Training distributed via Citrix-based DealerCentral (AN portal); available to users via tab called Knowledge Central. Training available at any time, at users’ fingertips

• The business case: KISS

“It used to be $100k per online module hour; now it’s $45k. We keep it simple; not like an OEM that might spend $1 million to include a bunch of video.”

Volvo Construction Equipment(Case Study)

Case study — Volvo Construction Equipment

• A worldwide provider of large construction equipment with 8,000 employees in the US

• Frequent changes in product and service strategy

• High turnover in sales staff in North America

• Needs fast training because of expanded product

• Traditional instructor training too erratic, time-intensive, and costly

Original model of sales training

Front-line sales staff

VCE product specialists

VCE district manager

VCF finance specialists

Regional and dealer product

specialists

Dealer sales manager

Dealer finance

specialists

Training on all products, processes, and support

Train the trainer

Etc.

New system installed

• QuickTrack — 33 course sales-training modules linked with hands-on training

• Filled a learning vacuum for sales personnel and managers

• Cultural issues addressed with one-on-one help

• Development cost $500,000 over two years

• District managers can focus on other areas of need

eLearning structure: Dealership personnel

Front-line sales staff

VCE product specialists

VCE district manager

VCF finance specialists

Regional and dealer product

specialists

Dealer sales manager

Dealer finance

specialists

Etc.QuickTrack basics

Market share growth percentage

101

110

131

Not trained

Web only

Web and hands-on

Market share growth percentage(YR 2003 vs. YR 2002)

Branch salespeople split into three categories — no training, Web training, and Web and hands-on training

Toyota(Case study)

Case study: Toyota Dealer Simulations

2. “Discovery Session”

3. Feedback

1. Dealer simulation

4. Action plan

Dealership simulation: Parts and service department

• Service revenue is currently dependent on warranty

» But warranty work is declining as vehicle quality is improving

• Customer-pay work is declining

» Independent repair shops are a threat to customer-pay

• Capacity is constrained

» Improve shop productivity and technician efficiency

» Brick and mortar investment in more service stalls

Parts and service (cont.)

• Parts: Potentially higher margin business

• Inventory management: Low inventory turns

» Same day fill rate vs. obsolescence expense

• Low accessory sales

• Retail and wholesale parts sold

Developing a business case

• Must show that eLearning will be worth the investment

• Look for a learning situation that lends itself to learning online

• Establish measurable outcomes

Developing a succinct business case

What is important is not what is spent, but what the organization gets in return

We want THIS number

“We are doing to make

better, as measured by

, which is worth $

Developing a succinct business case (cont.)

We are implementing an eLearning training

program to increase effectiveness of sales

staff training, as measured by increased sales

performance, which is worth $900,000.

Vendors

• Learning management system (LMS) vendors

» SumTotal, Saba, Pathlore, Plateau Systems, WBT Systems, GeoLearning

• Virtual classroom and rapid eLearning vendors

» Macromedia Breeze, WebEx, Brainshark

• Dealer training specialists

» ADP, Reynolds and Reynolds

Recommendations

• Determine what part of the performance problem is truly a training issue

• Establish an eLearning program for consistent, fast distribution of informal and formal learning to distributed learners

• Prepare the learning culture for the online learning experience . . . it can make or break the program

• Track employee learning through a learning management system

• Use authoring tools consistent with the nature of the content (and keep it simple)

• Integrate learning with everyday work — don’t make it something dealer employees must “go away”to do

• Mix training, practice, and simulation online

• Use eLearning to prepare employees for real-world simulations and OTJ practice

• Let eLearning outcomes drive OTJ to-dos/actions

• Measure performance improvement in operational and dollar terms

Selected bibliography

• March 29, 2005, Tech Choices “Learning Simulations: From Simple Tools To Custom Solutions”

• March 29, 2005, Trends “Simulations: An Emerging Technology For Building Employee Skills”

• January 12, 2005, Best Practices “Driving eLearning Through The Dealer Portal”

Mark Dixon Bünger

mbunger@forrester.com

Claire Schooley

cschooley@forrester.com

www.forrester.com

Thank you

Entire contents © 2005 Forrester Research, Inc. All rights reserved.