Web-based training: a marketing perspective of issues concerning corporations and customers.

Hallett, Brian ; Kunz, Michelle B.

ABSTRACT

Web-based training is an emerging service that is encroaching on traditional corporate and individual training systems. This paper reviews literature in an effort to identify key marketing and consumer behavioral conditions and issues unique to this service. Emerging trends and opportunities for small businesses, both providers and customers are identified.

INTRODUCTION

Corporate and individual training represents a multi-billion dollar market in the United States. According to research firm IDC (McGee, 2004), the global market for corporate e-learning and Web-based training is expected to grow nearly 27% compounded annually over the next four years, and is estimated to reach $21 billion by 2008. This emerging form of training, defined as an educational service aimed at providing specific skills for professional or personal gain, ranges from certification programs to one-time seminars aimed at addressing a particular skill or issue. The multibillion dollar e-learning business consists of vendors ranging from Harvard Business School to dot-com start-ups (Melymuka, 2002). The rapid encroachment of Web-based training into a mature corporate training market presents many questions for marketers seeking to understand the evolving nature of this phenomenon. This paper explores the Web-based training market, what forms of Web-based training are emerging, and suggests how Web-based training can best be marketed to and by small business firms.

DESCRIBING E-LEARNING AND WEB-BASED TRAINING

E-Learning is a broad classification that applies to the delivery of educational services through electronic media. Universities and other educational institutions are the most visible providers of e-learning services. Famed management guru, Peter Drucker, offered this comment about online education: "Universities won't survive. The future is outside the traditional campus, outside the traditional classroom. Distance learning is coming on fast" (Blake, Gibson & Blackwell, 2003). This may not come to fruition any time soon, but the impact of e-learning is resonating across all forms of education and training. As in the area of commerce, the Internet is fundamentally altering the structure of education, specifically in the area of skills training. The Internet provides the technology element that makes up the product and its delivery system as well as providing distribution channels and a means to promote the e-learning product or service (James-Gordon, Young, & Bal, 2003). The power of e-learning comes from the opportunity to leverage technology and information to alter the basic tenets of learning by eliminating the one-size fits all approach to instruction and customizing content to meet individual needs and learning styles (Pantazis, 2002). Web-based training is a subset of e-learning that is generally geared to more focused applications such as corporate and personal training.

WEB-BASED TRAINING SYSTEMS

One way to describe Web-based training systems is by delivery system: Web/computer-based training, Web/electronic performance support systems, Web/virtual synchronous classrooms, and Web/asynchronous classrooms (Blake, Gibson, & Blackwell, 2003). Computer-based training and electronic performance systems are generally off-the shelf products or resources that are limited in terms of providing a dynamic learning experience. They include CD-ROMs, online forums and tools that the learner can access to obtain answers to specific questions or to "self-study" specific content. Web-based synchronous and asynchronous classrooms represent the most dynamic area of Web-based training. In the asynchronous approach, the student and instructor can interact through e-mail and discussion forums. The student accesses materials posted by the trainer. In the synchronous approach, students and instructors meet online at designated times in a manner that mimics actual classroom instruction.

Another way of describing the nature of e-learning is offered by Benbunan-Fich (2002), noting that Web-based methods can be integrated into education and corporate training in two different ways: 1) by transmitting content (to deliver instruction), and 2) by supporting communication between teacher and student, or among students. Transmission of content generally occurs in lectures where instructors present materials and students try to understand and assimilate concepts --the objectivist model of knowledge transmission. Alternatively, Web-based training can maintain online learning communities that exist beyond the scheduled lectures or training sessions. These online communities support an alternative learning model known as constructivism, where knowledge emerges from peer interaction, evaluation, and cooperation.

The communication aspects of Web-based training are often scrutinized by the training community. One perceived downside of Web based training is the lack of human interaction (Melymuka, 2002). This lack of face-to-face communication is often at issue. Yet, Web-based training systems can provide powerful new venues to communicate effectively via discussion forums, online chats, blogs, and e-mail. In fact, online relationships have the potential to be even more emotionally powerful because many of the barriers associated with face-to-face communication are eliminated (Giguere & Minotti, 2005).

Both corporations and individual consumer/students are adopting e-learning and web-based training as a result of either realized or perceived benefits. These benefits include: cost effective learning; efficient management; customization; accessibility to current information and material; utilization of existing hardware and resources; and consistency and control of training material (James-Gordon, Young, & Bal, 2003). Furthermore, e-learning and Web-based training programs are built on a foundation that relies on the dynamic relationship that links people, learning and organizational performance (Pantazis, 2002). The communication technologies that underpin Web-based training provide place and time-independent communication modalities that traditional training approaches cannot approximate (Benbunan-Fich, 2002).

WEB-BASED TRAINING TRENDS

As with most technologically-based services, Web-based training continues to evolve in a quest to find the customer-driven services that realize returns on investment for training firms and consumers. The complex nature of learning and the reality of ever-emerging technologies add to this challenge. One formula that is finding success is blended training: an approach that combines delivery modalities to meet consumer/student needs(Picardi-Newman, 2005). This approach is in effect a cross-channel marketing approach that delivers the service through several venues, both Web-based and traditional.

Blended learning is the integration of independent e-learning with group instruction, and appears to be where e-learning is heading. For example, self-paced e-learning combined with traditional classroom instruction allows training managers to meet group learning requirements while taking into account individual learning styles (Carlivati, 2002). Blended learning makes it possible to reach a much broader audience for effective learning, retention, and on-the-job applications. Training professionals can mix an instructor-led classroom-based course with online delivery methods such as virtual classrooms, Web seminars and self-paced tutorials, as well as traditional media such as workbooks (Picardi-Newman, 2005). Blended learning is not just about the delivery - it must be considered along with the other key components of the learning life cycle, including needs assessment, development requirements, and program evaluation.

Blended learning approaches are being adopted by some of the biggest corporate training firms. After concluding that its Web-based training services had become "disjointed," the American Management Association launched a blended learning initiative last year when it began offering pre- and post-Web based support tied to its instructor-led seminars focused on project management ("AMA to delve further into blended learning, pursues legal community", 2005). Blended training seems to be able to win over even the most reluctant techno-phobic HR manager, who may have previously shied away from pure online learning because it cut out the social interaction of the classroom or training session, or learners who wished to discuss material face-to-face (Sparrow, 2004). Of all the terms and concepts behind technology based training, 'blended training' seems to be the most likely to stick around. Its appeal lies in the mix of delivery media such as classroom training, web-based training, virtual classrooms, books and mentoring.

Another developing trend in Web-based training is the emerging focus on content as opposed to communication technology. In some cases, slow acceptance of e-learning has been rooted in content considerations (Carlivati, 2002). Picardi-Newman (2005) suggests that providing asynchronous (self-paced) learning content before a traditional synchronous (all together) e-learning program is an ideal way to give participants an agenda, an overview of key concepts, and pre-session assignments. Although the interactive capabilities of Web-based training are well established, only 15-20 percent of e-learning today is conducted using interactive content (Britt, 2004). This is clearly an area that can and will be exploited by providers who seek to leverage the interactive benefits of Web-based training. Finally, the need for customized content is being addressed by Web-based training providers. As Brit points out, most early adopters of e-learning point to customized content as having the greatest strategic impact on their businesses.

CORPORATE SIZE AND STRUCTURE PROVIDE DIFFERENT NEEDS

As with all sound marketing efforts, strategy should be developed on the basis of customer orientation addressing the needs and wants of the consumer (Sheth & Mittal, 2004). Buyers of Web-based training services tend to fall into two categories: small and large businesses. Each category represents unique wants and needs.

In today's economy, large companies often place a premium on efforts to contain costs and achieve efficiencies through business process re-engineering and outsourcing. Web-based training offers an avenue to address both needs. As companies re-engineer themselves to cut costs and achieve efficiencies, many have realized savings obtained through online training (Bailey, 2002). As previously noted, large corporations spend billions of dollars on training annually. According to Brandon Hall Research (brandonhall.com), most training departments spend up to two-thirds of their budget buying off-the-shelf training and hiring outside consultants or instructors to deliver courses (Johnson, 2004). Web-based training appears ripe to grow in this market, especially when tailored to specific needs of the large corporation. The fact that in many cases training that typically would take 6 to 9 months can be compressed to 2 to 3 weeks through Web-based initiatives gains the attention of many corporate executives (Pantazis, 2002).

The cost savings evident in integrating Web-based training into the reengineering of corporate training functions can be seen in several high profile cases. General Motors University, the training arm of the parent company, has found that for every $1 of e-learning that a company adds, it estimates that it saves $2 for traditional class-room tuition and another $1 for travel time or lost personnel time (Pantazis, 2002). Parker Hannifin has realized savings with Web-based training through a reduction in travel expense and lost work time (Schrader, 2003).

The trend in the outsourcing of key business processes is also a market factor driving the growth of Web-based training. The top reasons respondents listed for outsourcing included cost savings, time savings that allow them to focus on business strategy, and improvements in compliance and accuracy (Johnson, 2004). Additionally, a recent survey from the Society of Human Resource management revealed that 57% of the HR and training professionals surveyed outsource all or portions of their training and management development programs.

Providers of Web-based training must consider the buying behavior of large corporate training functions. Large companies want to deal with larger, more solid vendors. It's easier for a department to buy from a small, private company than it is for the entire enterprise to buy from that same small company (Dolezalek, 2004). Furthermore, corporate buyers are relatively new to the purchase of Web-based training services. Four out of five organizations using e-learning for employee training started within the last four years, so the market is early in its life cycle (Britt, 2004).

While sharing some of the same training needs as large corporations, small businesses present a set of unique needs. Small businesses often lack the internal resources need to coordinate training services, therefore, they tend to rely more on vendors to develop content and manage delivery. Recognizing this dynamic, the federal government has entered the e-learning game with high visibility programs operated by the Small Business Administration and other agencies, all given a push from the Bush administration's e-commerce initiative (Harris, 2005). Although this service meets many of the Web-based training needs of small business, there is still a growing market for profit-based e-learning providers. Small business has not been penetrated much by e-learning and shows much market potential for e-training vendors (Dolezalek, 2004).

USER/LEARNER PERSEPCTIVES

From the user (learner) perspective of Web-based training services, there are several factors providers should consider in developing an effective product or service. Providers must understand and focus on the benefits Web-based training provides. Primary benefits of Web-based learning include convenience, adaptability, student comfort, and interaction. Convenience comes in the form of 24 hour availability and accessibility from any place there is a computer and Internet access. Training programs can be updated immediately and thus are easily adapted to changing course content needs. Self-paced instruction and self-designated settings are characteristics of Web-based training that lead to improved student comfort (Blake, Gibson, & Blackwell, 2003). As previously, stated the interactive aspect of the Internet can and should be leveraged in a customer-oriented approach to marketing Web-based training. The partial anonymity of Web-based learning may allow students to feel freer to express themselves and the text-oriented environment allows people to take more time contemplating fellow students' responses, as well as taking more time in forming their own responses.

The size of the Web-based training class also is a factor to consider. Contrary to conventional wisdom, providers should limit the number of participants in online learning sessions. Limited class size fosters a "community feeling" and ensures that instructors will have enough time to be a visible presence and provide personal attention (Giguere & Minotti, 2005). It is suggested that in a synchronous environment, participants should be limited to about ten. Asynchronous offerings that occur over a period of time can include more, usually 20-30 participants.

Skill and knowledge level differences among users are another factor to consider in designing effective Web-based training products and services. An e-learning program design (Britt, 2004) needs to allow a user to skim or skip content he or she is already familiar with and go deeper into materials when necessary. This enables the user to control his or her learning environment. E-learning components need to include simple content that enables the user to find their way around the application. One of the keys to converting instructor-led training to the Web is an environment in which individuals are able to attach meaning to what they learn (Giguere & Minotti, 2005). Web-based training is most successful when it encourages levels of self-directedness and competency.

WEB-BASED LEARNING ENVIRONMENT

Finally, the market dynamics surrounding Web-based training services must be considered in developing a profitable training enterprise. Traditionally, the B2C training services market has been dominated by national training and consulting firms. Online training allows smaller training vendors the opportunity to compete with national training companies as some companies prefer to work with local businesses (Bailey, 2002). However, competition is stiff for small Web-based providers that offer little differentiation in the products or services they provide. Profiting from Web-based training is difficult, as the Internet is overflowing with online instruction (Giguere & Minotti, 2005). A strong market growth and relatively low barriers to entry are attracting new e-learning providers, including competitors from other related business areas such as the consulting industry (James-Gordon, Young, & Bal, 2003). The key for providers is to seek niche opportunities and focus on emerging needs. One such need is the growth in training requirements associated with governmental regulations. Compliance training, including training in regulatory matters and specialized issues such as sexual harassment, is a niche presenting growth opportunities, because the return on investment on compliance training isn't hard to convey to executives (Dolezalek, 2004). E-learning is particularly appealing when employees need quick training and companies must record who gets that training (McGee, 2004).

MARKETING WEB-BASED TRAINING

The basic requirements of e-marketing apply to the Web-based training industry. E-learning providers are likely to be more successful in attracting customers if they are more attuned to the marketplace. The environment consists of the following uncontrollable factors: market demand, political and legal forces, social and ethical influences, technology, and competition (James-Gordon, Young, & Bal, 2003). The e-marketing strategic themes of personalization and customization, community, reintermediation, disintermediation, consumer tracking, enhanced customer service, and mixing bricks and clicks can be affectively applied to the challenges of providing e-learning services (Granitz & Greene, 2003). Blended training, the adaptability features of Web-based training, and the ability to track student/consumer progress efficiently go a long way toward meeting these strategic marketing imperatives.

In The 22 Immutable Laws of Branding, authors Reis and Reis (2002, p. 133) note that the Internet will spawn successful educational brands because education is a discipline based on interactivity. Web-based training brings much to the table in terms of unique approaches to interaction between instructors and student. This is evident in the emerging trends of blended learning and improved content that seek to address the needs of the user (student) and buyer (business). This growth market like other e-commerce scenarios is rapidly changing and requires sound marketing approaches that are based on an understanding of consumer needs and environmental/market conditions.

FUTURE OPPORTUNITIES

The future of Web-based learning and training programs is bright. The venue provides significant opportunities that would appear to be specifically suited to small businesses, either program provider or program consumer. Particularly important to small Web-based learning providers is the need to be cognizant of buyer needs, and to have the ability to leverage the technology to their advantage, as well as providing personalized, customer-specific content. From the consumer/buyer perspective of training programs, Web-based learning offers flexibility, timeliness/immediacy, and customization to meet the needs of a small business. Furthermore small businesses, either provider or consumer will be betterable to match/meet costs of such training programs to the mutual benefit of both entities. It can be concluded that a blended approach which leverages Web-based learning and technology, while providing interactivity and personal contact provides the greatest opportunity for small business enterprises. Specific program content that addresses governmental regulations as well as investigating governmental funding/support for such programs may be the first resource for small businesses to investigate. Web-based learning programs would appear to provide the opportunity for small businesses to level the playing field a little, on both sides of the market. Costs to buyers as well as return on investment for providers should be optimal when small providers match their training programs to the needs of small business buyers of such training programs.

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Brian Hallett, Morehead State University

Michelle B. Kunz, Morehead State University