When manufacturers put the ABCs of product education online, sales reps make the grade
By Mary Wagner
Online training for retail employees is something of a Holy Grail—in theory, it can save retailers time and cost over classroom training for associates on products, procedures and policies. But does it, in fact, accomplish that? In efforts to get the biggest bang for their training buck, retailers are out to answer that question for themselves. They’re launching online training programs that use the web to deliver information that store associates then take out to the sales floor or call center. If successful, the programs pay off in increased product sales, so it’s not so surprising that retailers have found a new category of partner in developing and deploying online training: the product manufacturers themselves.
Automotive and consumer electronics retailer Crutchfield Corp. doesn’t have stores, but it supports web and catalog sales with a staff of about 90 commissioned sales reps in its two web-enabled call centers. New hires must complete 12 weeks of classroom and practical training, and since many of the customers who ultimately buy from Crutchfield’s web site or catalog wind up talking to a call center rep first, it’s critical that the reps be fully equipped with category and product knowledge as well as sales techniques and guidance on how to handle different customer situations.
When Crutchfield investigated putting that training online in an e-learning format a few years ago, it proved to be cost-prohibitive, says technology training manager Peter Logan. “At that time, the cost per finished hour of training was $10,000 to $20,000, and our new hire training goes eight hours a day for 12 weeks,” Logan says. “It was really expensive for us to get all the information to the vendor and then hand-hold them through the process to get the product we really want.” Logan also points out that materials already developed by Crutchfield internally, its catalogs and web site, are valuable reference sources for new trainees. “We’ve already got that content so there is no sense in trying to recreate a lot of that in product training,” he says.
Opportunity for two
Under that scenario, investing further to develop online product training makes less sense for a retailer—but it’s clearly an opportunity for brand manufacturers. They already spend on vehicles such as product spec sheets, brochures and in-store classroom training to keep store associates up to date on products and new product features, so going online with that is, in concept, an easy leap. The questions that remain are: Does it work and does it pay?
Crutchfield hopes to find out by the end of this quarter. Products and product enhancements roll out so frequently in consumer electronics that the company gets visits at least once a week from manufacturers who take to the road to demonstrate what’s new and keep call center agents up to date. In October, Crutchfield started making product training courses provided by some of its manufacturer partners available online to sales associates, placing links to courses on a new, internally-facing online resource page. Employees who to take a course do so on their own time. Their compensation is largely commission-based, so there’s a built-in incentive in the idea that better product knowledge equals greater selling ability. To sweeten the pot, some of the manufacturers sponsoring online training add a small reward for completing the program, such as a T-shirt or a cap.
Crutchfield will track any correlation between higher sales volume and course completion, by associate, and it’s not the only party eager to see the outcome. “The manufacturers are thinking maybe they can streamline their own training costs, and that maybe they don’t have to deploy an army of trainers,” says Logan. “They are just as curious as we are to see if, after people take an online course, there is an incremental increase in sales.”
But it’s not just high-tech electronics retailers who can turn to manufacturers for e-training assistance. Manufacturer Columbia Sportswear Co., which sells its outdoor apparel and gear through its own flagship store and through retailers, believes that e-training can boost its own sales.
This quarter, with online training services provider DigitalThink Inc., Columbia is testing online training in cooperation with a major retailer that it won’t identify. Columbia looked at but rejected the use of CD-ROMS to deliver the 15-minute test program, which focuses on its outerwear lines. “We felt online was the most effective way to communicate the information,” says manager of market research and sales analysis Paul Herring. “There’s nothing to ship, no materials to misplace, and no manufacturing cost outside of content development.”
Much of Columbia’s line is highly-engineered outerwear built for serious outdoor activity, so detailed knowledge about product attributes such as construction and materials is critical to sales. Herring says nothing beats face-to-face, one-on-one training, and the manufacturer regularly dispatches reps to its retail accounts for that purpose. But with potentially hundreds of thousands of sales associates across many retailers needing to know about the products, Columbia needed to find a way to extend its reach.
Don’t forget the PCs
As slick as it sounds, there was a cost to the store partner that delayed implementation: the cost of installing enough computers in stores to give associates sufficient access to the online program. Adding the PCs delayed the pilot’s implementation by two months, bringing the total development time up to about nine months, Herring says. Unlike Crutchfield’s call center agents, the store partner’s associates will be required to take the online course, but Herring believes they’ll welcome the chance to learn more. “It’s simple and it’s short,” he says of the online module. “These associates aren’t on commission, but they’re still evaluated on production per hour, so it’s important they know about the products.”
Associates will be tested online on course material, but the bigger test will take place on the sales floor over the next several weeks. Columbia and its retailer partner will over the fourth quarter measure brand sales in a selected group of stores where associates complete the online module against a control group of stores where online training wasn’t provided. Depending on results, it may add other modules focusing on a broader range of Columbia products and consider rolling out the program to other interested retailers.
Top of mind
Herring also will be watching sales for any signs of a secondary benefit he believes the online training could deliver beyond product knowledge: that of keeping the brand top of mind among store associates. “You want them to feel comfortable not only with the technical aspects of your product, but your brand in general. You want them to think of it first when they are faced with making a recommendation from a number of brands,” he says. “We feel as though we may gain a little competitive advantage from this program as well.”
Even a retailer willing to develop an online training program itself will sometimes allow manufacturers to include product information in the training material—and, of course, let the manufacturer pay the cost of developing that component of the training. The Brick Warehouse Corp., Canada’s largest retailer of home furnishings and consumer electronics under one roof, has turned to online training company InsightU to augment classroom and sales floor training. It’s seen significant ROI since its initial implementation last November, says Mark Laskin, The Brick’s national training director.
InsightU has developed 10-minute online modules to augment classroom and sales floor training. Those modules include content supplied by The Brick as well as by the vendors of products sold in The Brick stores. Where the Brick has indicated willingness to fold specific product knowledge into training, InsightU works directly with the vendor to develop the content and the vendor supports that development cost. The Brick pays for a software-based learning management system, monthly hosting and reports, and some custom content development.
For instance, The Brick along with a bedding manufacturer and InsightU developed an online training module to support the launch of a new mattress in the stores this spring. Had the training been delivered to employees offline across the Brick’s 70 stores, it would not have had the same content consistency as in the single online course, nor would it have been delivered to all of the relevant employees simultaneously as the online course was, Laskin says.
A sales spike
“That product jumped off the sales floor across the country after that module went up, and there’s a direct correlation to the people who took the training,” he adds. “That’s the beauty of e-learning. Everybody can get the same message all at the same time on a consistent basis.” The Brick had a similar experience with a newly-launched DVD system last year; sales of the product spiked and it quickly sold out with the support of an online product training module.
While Laskin didn’t disclose what The Brick pays for its e-training program, a medium-sized retailer with employees in the range of 10,000 might expect to pay about $30 per employee, per year for e-training services from InsightU, according to Kevin Dixon, vice president of business development and partner at InsightU. The turnkey solution includes the learning management system software, hosting and standard reports, and courses that represent a combination of modified, already-developed as well as some custom-developed content. Custom-developed course modules vary in price depending on factors such as the course length and degree of interactivity, Dixon adds.
Even without the vendor input and underwriting it does get, though, The Brick would be an advocate of online training. The Brick, which continues to expand geographically beyond its 70 stores, plans for online training to make education of its increasingly large number of employees more efficient and to bring more consistency to that process.
New hire training at the Brick is a three-week program that combines an online component with mentoring, classroom training and job shadowing. Much of employees’ ongoing training after that now takes place online, and it goes beyond product knowledge training; associates are trained in soft skills, including The Brick’s seven-point sales strategy.
Rewriting the content
InsightU takes the structure of what The Brick had been teaching in classrooms or via job shadowing and re-writes it for delivery in an interactive online program, simulating customer interactions, for example. “The key to it is that the training is totally interactive and enhancing. We think that’s what separates us out,” says Dixon.
The modules are delivered to employees on a regular schedule through the several computer terminals, used in sales, located in the sales floor of each store. Employees with downtime between customers are expected to complete the online modules as they are rolled out. They must receive a passing grade on an online test that follows the material or re-take the test.
Laskin says putting that training online has freed up more time for store managers who previously spent more hours on training. “It’s letting the store sales managers go back to what they are paid to do. We’re a sales organization first and foremost, and the idea is to alleviate some of that responsibility and reshape it so they can be more effective,” he says.
More info = less turnover
Apart from increased sales and managers being able to spend more time on the sales floor, retailers are finding other program ROI. Staples Canada, for instance, reduced employee turnover significantly after instituting online training from InsightU after the retailer identified that the lack of product knowledge was a key factor in higher turnover among store associates, Dixon says.
“They were getting embarrassed and leaving,” says Dixon. “If the associate keeps getting asked about a three-in-one printer and doesn’t have the information, he doesn’t know how to deal with the customer.”
In fact, additional knowledge to deal with customers is another of the benefits that Columbia has identified. “Sales associates don’t like to be in positions where they are asked questions and don’t have answers,” Herring says. “We find that 99.9% of the time, associates appreciate having this kind of information.”
More information leads to less turnover, Dixon maintains. And an online approach
makes the additional information affordable. “The associates on the sales floor
are crying out for consistent information that will help them serve customers,
and this has had a positive effect,” he says. “That’s fewer people they have
to hire and train at thousands of dollar per new hire. If retailers can start
putting those numbers together, that really helps their return on investment.”
mary@verticalwebmedia.com
It’s hard to do online training without enough computers
Retailers such as The Brick Warehouse Corp. are set up to deliver training to associates online via computer terminals equipped to handle it, that already are on the sales floor in sufficient numbers. But the absence of the right hardware is one reason the U.S. division of Swedish home furnishings giant Ikea has yet to push the online training it offers its managers out to its store associates, who still receive their product training through booklets distributed by the company.
“It’s a hardware issue right now, pure and simple,” says Jeff Wilson, learning and development manager for Ikea’s U.S. operation, who explains that the computer terminals used on Ikea’s sales floor aren’t equipped for online access. While some of Ikea’s stores have established dedicated resource rooms housing web-enabled PCs for employees’ use, Wilson points out that those resources still aren’t enough to make online training for store associates practical on the scale that would be required. Ikea’s U.S. stores employ nearly 8,000 people, of whom about 5,500 are hourly workers, including sales floor associates. “Our Chicago store alone, for example, has 650 employees. You’d need a zillion PCs,” he says.
That’s not to say Ikea isn’t investigating the idea for possible implementation down the road. Ikea US is installing a new system, already used in its European stores, that may allow it to push training out to store associates by adding Internet access to the terminals on the sales floor. “It would be a couple of years down the road before that could happen,” Wilson says.
In the meantime, Wilson says Ikea’s U.S. operation is seeing gains from the online training it has offered to its 2,500 managers for the past three years. Ikea US uses two off-the-shelf, web-based training packages from provider Element K LLC, one that trains managers in the use of various Microsoft desktop applications such as Excel and another that offers training in basic management skills. Wilson says this replaces a training system in which Ikea sent managers off site to local technology vendors to learn desktop skills and to a store classroom for what he describes as “Management 101.” Ikea augments that with an internally-developed online training program built specifically around managing at Ikea, which resides on the company’s own servers. Unlike the online training it offers from Element K, Ikea requires managers to take this training, which takes about 20 hours spread over 16 modules.
Wilson didn’t disclose what Ikea pays for the two programs from Element K, but says the company measures ROI in terms of the convenience of putting the training online. “When we have new managers and new stores coming in, we can’t wait to hold a class. The manager needs to have a skill at that time. When we listed the basic training we wanted our managers to have, it was pretty easy to go with Element K because we didn’t have to develop the content. The timeliness of the training really meets our needs much better than classroom training on most issues,” he adds.
Wilson adds that another plus Ikea US gets from its online manager training is that the format has led more managers to take skills classes than was the case when training was offline. Because Ikea doesn’t have a rigid set of prerequisites for manager positions, the need and focus of training required by managers varies. Ikea makes nearly 40 training modules available online. Some 300 to 400 managers per year take the desktop application program, and about 500 managers per year take the management training programs. “We wouldn’t otherwise get people to sign up for that many sessions on that many topics because that could require time away from the store and travel time and expense,” Wilson says. “We haven’t looked at any savings between online and classroom training, but the real benefit to us is that more managers are taking these programs than we would ever see in the classroom. It’s a vehicle for our managers to get whatever they need in the way of training whenever they need it.”
