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VIDEO CASE 18-1 DigitalThink: Marketing E-Learning Services

"In 1996, two colleagues and I started discussing the possibilities that the Internet was opening up for corporate training," said Umberto Milletti, vice president of marketing and solutions management at DigitalThink. "We realized that we could harness the power of the same technologies that had revolutionized other parts of the business world to help organizations better disseminate skills and knowledge to their people."

Milletti's observation was very insightful. Over the last several decades, computer technology and-more recently-the Internet have changed the way that companies around the world do business. Desktop computers help employees work more productively; processes that once were laborious and manual are lightning fast; and geographically dispersed people can communicate and collaborate in cyberspace faster than ever before.

DigitalThink, a company that has grown from three employees to more than 500 in a few years, is at the forefront of a revolution in corporate training and education services. DigitalThink and other e-learning companies are supplementing-and occasionally replacing-traditional classroom-based training in much of the business world. The effectiveness of e-learning is causing many firms to reconsider their methods of providing training and education to employees, partners, and customers.

MARKET OPPORTUNITIES Large companies with many locations and dispersed workforces, such as car rental agencies, hotels, airlines, retail stores, banks, and consulting firms, need to train thousands of employees frequently throughout the year. In the past, employees would gather in central locations for training courses that could last anywhere from a few days to one month. This approach to training and education was very costly and time consuming, and its effectiveness was influenced by inconsistencies in the capabilities of the trainers and the difficulty of requiring the trainers and the students to be in the same location. Using personalized, technology-based instruction saves the company time and money by increasing the reliability and effectiveness of the service and by putting the learner in control of the location and the pace of the learning experience. DigitalThink is leading the e-learning movement. Its methods have been shown to compress training time by as much as 50 percent and reduce the cost of development, maintenance, and delivery by 64 percent. A recent study estimates that the global market for e?learning will grow at a 100 percent annual growth rate to $33.6 billion in 2005!

HOW DOES DIGITALTHINK ACHIEVE THESE MIRACULOUS RESULTS? DigitalThink e-learning is very results-focused. Courses are designed to develop the specific knowledge and skills that employees or salespeople need to do their jobs and to give them the opportunity to test their knowledge and apply what they've learned with a real-world situation or problem that they might encounter on the job. "Learning is most effective when students practice and demonstrate performance in a way that closely matches the performance expected of them," explains Shelly Berkowitz, manager of instructional design at DigitalThink. "We design relevant, realistic practice and assessment activities that require students to solve problems that are as complex as those they encounter in actual work situations."

Trainees can go through the courses at their own pace, allowing people to take as much or as little time as they need. Advanced students can skip over material that they already know and go directly to the exercise or assessment section to test their mastery of the material. DigitalThink e-learning can also be delivered to the learner through different media: on a CD, via a company intranet, or through a browser on the Internet. The Web-based versions of DigitalThink's training courses are the most popular-these allow companies to update and maintain the training program very easily and cost-effectively, as well as to reach all their employees smoothly and quickly.

THE MARKET DigitalThink sees its target market as the Global 2000 companies, the largest corporations in the United States and around the world. These companies have the critical mass needed to justify large training programs, as well as continued need for training and re-training. Within these companies, key decision makers with large staffs might include the director of a call center, the vice president of sales, or the chief information officer. Hardware and software manufacturers, travel and leisure companies, major retailers, and other organizations that have been traditionally dependent on massive instructor-led training efforts are key markets where DigitalThink has had success selling its e-learning products and services. Specific customer needs vary from ready-made courseware, to custom course development, to comprehensive learning management systems which include virtual classrooms, content management systems, and consulting services.

CUSTOMER EXAMPLES DigitalThink developed a customized training program for an international airline's baggage and reservations departments. This airline is very geographically dispersed, so it did not make sense for it to constantly transport new employees to a central location for training. Also, with the large number of people performing these jobs, the training needs are almost constant. The content of the training is very process-oriented, which is one of the best applications for e-learning. The airline and its employees have been pleased with its decision to transition its training program to a technology-based system.

Circuit City is another of DigitalThink's prominent customers. "The e-learning program that we provide to Circuit City is centered around customer service, products that the sales counselors sell, general sales skills, and managerial skills," explains Milletti. DigitalThink has helped Circuit City create more effective, interactive training that takes half as long as classroom based-learning and costs half as much. And the retailer expects to see continued improvement in customer satisfaction and sales.

Check out DigitalThink's website (www.digitalthink.com/catalog/demos.html) to see a demo that includes some of the custom courses that DigitalThink has created for its customers.

Questions

What are (a) the advantages and (b) the disadvantages of DigitalThink's technology-based instruction over conventional classroom-based educational services?
Given your answer to question 1 above, (a) what are the key criteria DigitalThink should use in identifying prospective customers for its service, (b) what market segments meet your criteria, and (c) what are possible sales objections these segments might have that you have to address?
Suppose a large international hotel chain asks DigitalThink to make a proposal to train its thousands of front-desk clerks and receptionists. (a) How would you design an e-learning program to train them how to check-in a customer? (b) How can DigitalThink demonstrate the points of difference or benefits to the hotel chain of its technology-based instruction to obtain a contract to design an e-learning program?

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