Small businesses and medium-sized businesses face many competing learning management system (LMS) vendors. As the market is so very active, there are also many corporate LMS plugin providers with very different pricing models, and many LMS vendors are expected to require you to provide evidence of your return on investment (ROI) for training.
The following is an introduction to understanding LMS vendors’ product features, pricing models, ROI calculations, and a guide to assessing LMS vendors so that employers can evaluate an LMS vendor’s offering and confidently select a vendor that best meets their business needs for 2025.
SMBs Must Have a Guide to Purchasing L&D Solutions in 2025
The global learning management systems (LMS) marketplace is growing rapidly, with many estimates predicting the market will exceed USD 22-27 billion in 2025, with further rapid growth predicted through 2029-2032 – based upon growing demand for learning solutions, both corporate and educational.
In fact, it is estimated that small-company revenue from LMS products will increase more than 2.5 times between 2024 and 2032 as small companies begin to develop formalized training and compliance programs.
While there are an estimated more than 1,000 LMS vendors in the industry, this is creating confusion among learning leaders. For SMB teams with little funding for L&D, having a clear framework for evaluating an LMS vendor’s product formats prevents teams from overspending, under-implementing a product, or purchasing a product without scalability.
LMS Education for Small-Medium Businesses (SMB)
SMBs require a learning management system (LMS) that provides the standard functions of training and onboarding as well as compliance, without the complexity associated with using an enterprise-level LMS. Therefore the high priority factors when selecting an LMS include: ease of use, rapid deployment/implementation, predictable pricing and the ability to support remote/hybrid workers.
Unlike larger organizations, SMBs don’t have dedicated LMS Administrators or sophisticated Information Technology (IT) departments; therefore, selecting an LMS with a user-friendly interface and an enthusiastic and supportive vendor are significant factors in making the final purchasing decision. Many smaller organizations also choose to use ready-to-use content libraries and a combination of instructor-led and online courses, rather than developing custom course materials.
2025 LMS Market Snapshot for SMBs
Analysts predict that between 2025 and 2032, SMBs will see significant growth in LMS (Learning Management Systems) sales (with a CAGR of 17-20% expected over the period). As LMS adoption continues to grow among SMBs across multiple industries, the amount of revenue generated from dedicated SMB LMS solutions is projected to more than double by 2032.
Corporate LMS submarkets are also experiencing strong growth trends, and it is projected that corporate LMS submarkets will grow from approximately 9-14 billion USD in the mid-decade to over 70 billion USD by the beginning of the 2030s.
The significant growth trends indicate that SMB buyers will see increased availability of innovative new AI tools, improved LMS reporting capabilities, as well as improved LMS integration capabilities; however, they may also encounter more “noise” in terms of competition among LMS vendors and the proliferation of competing LMS-related categories such as Learning Experience Platforms (LXP) and Performance Hubs.
Mandatory Functionalities of an LMS for Small-Medium Sized Businesses
Critical Features of an LMS
The minimum LMS functionality for most SMBs consists of course, user management, assessments, as well as basic reporting. Course and user management enable SMBs to onboard staff and track their required training while providing a record of completion for auditing, eliminating the need for significant administrative overhead.
An LMS must support the following to meet the demands of the majority of SMB clientele today: mobile responsive designs and the ability to provide content in standard formats (e.g., video based learning and SCORM format). In addition, many SMB-focused LMS platforms are providing templates and drag-and-drop build technologies to assist those who lack the expertise in instructional design to deliver effective eLearning content.
The use of Analytics Reporting and Return on Investment Insights
The modern LMS will best equip leadership in presenting the effects of training through a robust set of analytical reports, customizable reporting options, and the ability to set reporting intervals for training’s effect on leadership metrics. Among those metrics, course completion, engagement in learning activities, performance on assessments, and duration of learning activities with each correlate to productivity and/or compliance.
Vendors have discovered that utilizing data reporting capabilities will allow them additional opportunities to demonstrate the benefits of both partner and customer educational programs offered by their company through an element of outsourcing.
For small and medium businesses, robust reporting capabilities will be essential to supporting a financial or human resource manager’s business case for renewing or expanding their LMS or developing a business case around their training.
Emerging Capabilities include Personalization, AI and Integrations
Recent research has highlighted how artificial intelligence (AI) will change how LMS will be delivered in the future, as LMS offer an element of content development, content recommendation and automated support. As a result, businesses are now looking at AI-enabled learning systems as a central hub for achieving performance through regulatory compliance, capability development and on-the-job support.
When considering LMS’s integration with HRIS (Human Resources Information System) or Collaboration platforms, buyers should consider whether general AI capabilities such as recommending content or search capabilities provide additional value to the end user through improving engagement and/or lessening administrative work. However, buyers also need to consider data privacy, transparency, and changes associated with adopting the use of AI-generated materials.
LMS Pricing Models for SMBs
Common pricing structures
SMB LMS pricing models are typically structured in three ways; currently, SMBs pay for a LMS based on a monthly fee per active user, tiered per active user bands, and/or flat-fee subscriptions. Entry-level plans typically provide a very small initial user group of, say, 10-40 users, and cost very little per month. As the number of users increases so too will the price of the LMS.
Some LMSs are packaged as a base subscription plus a fee for each additional user, while others include all features bundled together as part of a larger HR suite. Therefore, buyers should evaluate how pricing varies at higher user counts or when including multiple branches, portals, or advanced analytics into their total implementation plan.
Typical costs for SMB LMS Solutions
Costs for typical LMS platforms specifically developed to service and support Small and Medium-Sized Business (SMB) users vary widely, with Standard tier fees beginning at approximately $10-$20 per user/per month for mid-range features, and Basic tiers usually $5-$10 lower than standard tier fees. Flat-fee pricing will range from approximately $50-$100 for teams of 10-20 users, this pricing structure is attractive to Micro Businesses and Start Ups.
Some vendors provide free limited access to their products, such as allowing 5 users and 10 online courses. This limited free access provides small businesses the opportunity to test the product before committing to a financial investment.
Once an organization has more than 100-500 users or needs multi-tenant portals, they will likely enter into the Custom price quote realm, although most vendors provide volume discounts that will ultimately reduce costs for larger total investments.
Hidden and Indirect LMS Costs
Unlike initial subscription fees, SMBs should also account for costs associated with the implementation or configuration of an LMS as well as costs associated with migrating existing systems and/or data. Additionally, while managed implementation services may help to reduce the workload for staff, they can create temporary expense additions to projected first-year expenses.
Implementation, support, and content
In addition to the additional costs associated with the implementation/configuration of an LMS, there are additional costs associated with purchasing content licensing (e.g. from an external course library) and/or third-party compliance modules, etc.
These additional costs will accumulate over time and have a significant impact on the total cost of ownership (TCO) for an LMS. Organizations that primarily use soft-skills libraries and/or vertical-specific content should consider combining the expected licensing costs of these resources with the cost of their LMS.
Administrative and opportunity costs
The ROI of training is based on more than just the cost of the software; it’s also based on time spent by administrators and subject matter experts developing and managing the training program. Incompetent or inefficient systems often result in increased internal administrative costs due to the need for manual work or duplicate uploads.
However, centralized content management and multi-tenant configurations have been demonstrated in many case studies to reduce administrative time by enabling updates to propagate from one location across many instances of a client or internal use. The opportunity cost for small to mid-sized businesses is the time their learners spend struggling with poor user experiences instead of utilizing their newly acquired knowledge and skills.
How to Calculate LMS ROI for SMBs
1. Basic LMS ROI formula
The basic equation for determining the ROI of LMS (learning management systems) is a formula that compares total costs with net benefits. The most common formulation is to determine the percentage of ROI by taking the net benefits of an LMS and dividing them by the total cost of the LMS. The percentage of ROI is then multiplied by 100.
The computation of ROI requires estimating both direct costs (software subscriptions, implementation, and content development) and indirect costs (time spent on the LMS), as well as identifying quantifiable financial benefits, such as cost savings or revenue increases.
Capturing the direct and indirect costs, as well as the financial benefits of the LMS, in a standardized manner will enable SMBs (small and mid-sized businesses) to provide stakeholders with an accurate representation of the LMS’s ROI.
2. Tangible and intangible benefits
From a tangible perspective, the benefits to SMBs of using an LMS include: reduced travel/venue costs, reduced printing costs, accelerated time-to-completion for new employees, and fewer compliance-related penalties due to a lack of knowledge regarding corporate policies.
In addition, research has shown that companies that implement an LMS are able to achieve a decrease in the time required for new employees to become proficient at their jobs (time-to-competency), and a reduction in the number of accidents that occur in the workplace due to an LMS program to provide structured and consistent training.
Intangible benefits may be related to enhanced employee engagement, increased knowledge sharing, and improved employer branding, and as such, they should be weighed against other benefits in order to determine an appropriate estimate of their financial value.
In some cases, authors have proposed that a weighted metric be developed to represent the cumulative value of multiple benefit categories, allowing SMBs to assign a weighted ROI figure to assists in budget formulations.
3. Example LMS ROI levers for SMBs
Typical ROI levers for SMBs utilizing LMS are speeding up how long it takes to onboard new hires, training their sales team how to develop skills and creating consistency across multiple locations regarding how employees are trained on company processes.
LMS have been associated with an increase in performance metrics and the time it takes for an employee to reach full role readiness due to the way that microlearning is designed within them.
Compliance and safety training can provide SMBs with ROI through a reduction in the number of accidents, a reduction in fines and penalties incurred by large companies. Examples of this have been demonstrated in several examples, where through structured LMS programs, businesses have experienced significantly fewer incidents resulting in lower workplace accidents.
For training providers, who provide training to customers or partners, white-labeling a multi-tenant LMS system allows businesses to create new revenue opportunities as well as allowing them to leverage large numbers of clients with minimal incremental administrative costs.
Additional Read:
The Cost Factor: Why WordPress LMS Plugins Are the Smartest Choice for SMBs?
SMB LMS Features vs. Costs vs. ROI
Trade-offs SMBs face
Small organizations should consider only implementing features necessary for their growth to avoid paying for additional complexity. While there are some advanced capabilities offered by an LMS, such as artificial intelligence-driven recommendations or a fully integrated suite of applications, they may be too sophisticated or redundant for a small organization in the initial stages of formalizing training.
In reality, small and medium-sized businesses are more likely to achieve good returns on investments if they select the right set of core functions and use them to report effectively on how they are performing and what type of information to target when delivering content.
Sample feature–cost–value comparison
By mapping their business’s features to business requirements, SMBs can make informed decisions regarding which investments provide the greatest benefit (i.e., revenue contribution, productivity, and compliance).
Evaluation Checklist: How to Choose the Right SMB LMS
Step 1: Clarify business goals and use cases
When evaluating Learning Management Systems, the first step is identifying the business training challenges the LMS needs to address (i.e., speed to competence, compliance risk, consistent product knowledge, and additional income from training). The challenges are supported by defined metrics, such as measuring a decrease in time to competence (in %) and increased completion rates for required courses.
Defining the business requirements helps identify LMS vendors whose future product offerings and case studies align with the same business requirements you have defined and the same industry context. Defining the business requirements also helps determine a method for evaluating the LMS based on measurable results. Defining the business requirements allows you to assess the LMS vendor mid-way through your evaluation process.
Step 2: Create a short list of LMS Vendors that align with your organization’s use cases and industry.
Research indicates LMS buyers are often overwhelmed by the large number of LMS vendors and overlapping categories. To narrow down the field of LMS vendors, SMBs need to focus on LMS vendors that serve their level of business, use case, and regulatory requirements instead of relying strictly on a list of top LMS.
In addition, reviewing the case studies from other SMBs in your industry (e.g., healthcare, public sector, professional services) gives you a good indicator of the scalability, quality of support, and speed of implementation. Independent review directories will give you good insight into usability, responsiveness of support, and the vendor’s flexibility in configuring solutions.
Step 3: Evaluate Usability, Implementation & Support:
Managed Implementation Services & Rollout Plans can greatly enhance the likelihood of successful adoption, particularly if there are limited internal resources available to support a rollout. Look for vendors that offer clear timelines and details for Onboarding & Admin Training as well as Change Management.
Case studies have shown success with many clients who were able to onboard and train LMS users within an hour due to easy-to-use interfaces and improved workflow efficiency. For small and medium-sized businesses (SMBs), comprehensive support channels and adequate documentation may be of equal or greater value than any specific feature of the LMS software.
Step 4: Assess Reporting Functionality & Return on Investment:
Be sure that each of your finalists provides Reporting capabilities that are designed to track and report on KPIs defined by your Organization including Completion Rates, Engagement Rates, Assessment Scores, and Compliance Tracking. Customizing Reports and scheduling Automatic Delivery of Reports to Management will help save time spent managing these Reports and will provide Management with consistent Insight into how their Employees are performing.
A number of LMS vendors also provide the tools necessary for exporting Report data for further analysis or finance purposes to incorporate into the larger Performance Dashboard. For SMBs, this ability supports building the Business Case for continued Investment and Growth.
Step 5: The aforementioned paragraph has been paraphrased as follows:
To accurately estimate the financial return on investment for an LMS, one should build out a financial model incorporating all costs associated with supporting an LMS, as well as anticipated returns. The cost component of the model would include the subscription fee, Implementation Services, content licensing, internal time, integration work, etc.
On the return side of the equation, where possible quantify reductions in travel and venue costs, increased efficiency in onboarding, decreased risk of workplace accidents and compliance issues, and enhanced employee performance. These time ranges allow for a more strategic decision-making process, and therefore align your LMS acquisition with your overall corporate strategic plan.
Competitor Gap Analysis: What Most LMS Guides Miss
Overemphasis on features, underemphasize on outcomes
Most LMS guides miss the corporate objectives; thus creating the gap in understanding between the cost savings associated with implementing an LMS and the employee performance improvements obtained by implementing an LMS. Most of the top ranking articles regarding LMS’s are focused primarily on listing out features and/or vendor names and not relating these features back to quantifiable business outcomes. As a result, purchasers are distracted by the long feature checklists rather than focusing on the smaller quantity of features that actually produce a return on investment in their business environment.
Research-based guidance suggests that corporations need to align their LMS capabilities with the following corporate strategic objectives: improved employee performance, regulatory compliance and revenue growth generated through training and development of employees. The evaluation frameworks that SMBs will benefit from should include prioritization of outcome-oriented features/metrics, as opposed to solely relying on screenshots of interfaces.
Inadequate coverage of ROI Frameworks and Real World Data
Many generic buyers’ guides contain limited material on ROI with a number of generic formula types but provide no real-life examples or metrics that can be used to generate ROI estimates from their case studies. Through research and case studies of actual implementation of TMS/LMS software, we have found significant returns associated with such advantages as fewer accidents, faster Time to Competency, Higher Throughput of Learning Events, etc. The total of these benefits can be assigned a monetary value.
The serious ROI discussions also place significant emphasis on non-quantified benefits, and Methods of Weighted Estimation and/or Weighing Importance of Intangible Benefits may be considered. Many SMB Buyers are looking for Guides that give step-by-step instructions on how to evaluate the above benefits, rather than simply assigning a numerical value to them.
Insufficient coverage of AI, Consolidation, and Technology Rationalization
Emerging research indicates that AI is changing the way organizations view LMS, PTMS and LXP. Furthermore, organizations are consolidating various learning technologies to reduce Vendor Sprawl. Most existing blog posts view LMS, LXP and Performance Support Tools as distinct and separate projects, when in fact they should be viewed as part of a strategic technology consolidation plan.
As well, SMBs could benefit from the availability of a single, cohesive platform that includes multiple functions within a learning platform, such as Compliance, Skills Development and Performance Support, rather than requiring separate tools and integrations. By failing to acknowledge the changing landscape of learning technologies, many Guides for SMBs leave these buyers without a comprehensive long-term plan for Technology Rationalization as they expand.
Practical SMB LMS Evaluation Criteria (2025)
When you evaluate potential LMS vendors, you can employ this checklist as an organized guide to compare scores of LMS vendors against one another.
1. Alignment with Business Objectives:
- Does the LMS offer functionality that aligns with your three most important training goals? Examples would be Onboarding, Compliance & Sales Enablement.
- Do vendor examples from your industry (and size) back these claims?
2. User Experience & Features:
- Can both non-technical administrators and students utilize all core features i.e. courses, assessments, & tracking easily?
- Does your LMS support mobile platforms and adhere to standards for your course content?
3. Measurement & Reporting:
- Are you able to track and export or schedule reports based on your Key Performance Indicators (KPIs) for your LMS stakeholders?
- Does this LMS have the necessary data available to calculate ROI (Return on Investment) e.g. Course Completion, Time Taken, Performance Indicators.
4. Artificial Intelligence & Integrations:
- Is there an integration available with your Human Resources Information System (HRIS), Single Sign-On (SSO), or collaboration tools with minor custom development required?
- Are there AI-based features that are available and also acceptable for your company’s risk/reward profile and therefore fall under your company’s governance requirements for technology?
5. Support and Implementation
- Is there a concrete plan for implementing with realistic expectations for your team?
- What type of Service Level Agreements (SLAs), support channels, and resources for training people who are doing the administrative work? provided to an administrator level
6. Pricing and Complete Costs to Business
- Is it clear as to which subscription tiers and user limit exist and how much do premium features cost?
- Have you considered the Total Cost of Ownership for multiple years (including internal time that will be spent) as well as the cost of your content?
7. Return on Investment (ROI) and Success Metrics
- Will you have a record of defined ROI metrics (e.g., 20% reduced onboarding times/16% reduced incident rates)?
- Can the vendor assist with providing benchmark examples of other clients who have had success?
Conclusion
Skilltriks helps small-medium businesses transition from ad-hoc employee training to a program that consistently produces a higher return on investment through effective alignment of LMS strategy to business objectives by aligning LMS Strategy to Company Strategy and Business Goals. SkillTriks has the knowledge necessary to guide you from the process of identifying vendors and developing LMS requirements to building a solid ROI model and optimizing the LMS investment.
