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
Claire Schooley
www.forrester.com
Thank you
Entire contents © 2005 Forrester Research, Inc. All rights reserved.