ROI For Sales TrainingPosted on April 12th, 2016
Most companies have a sales team. They make calls, organise meetings, speak with prospects, and aim to hit monthly targets. And most of the time, they do fine. Sufficient guidance can be provided internally, by line managers or more experienced team members. There is collaboration, and people work together to help the business achieve its goals.
However, sometimes senior management spot the potential for improvement. Perhaps there are many new members on the team. Perhaps the sales figures are poor, and engagement is low. Perhaps the company has just been pitched to very well by an external provider…
Whatever the situation, the key question management will be asking is this: what kind of returns can we expect from an investment in sales training for our team?
ROI and sales training – research from CSO Insights
According to sales and marketing effectiveness research firm CSO Insights, ‘there is a strong business case emerging for making investments in sales skills training.’
Conducting a review of the input received from over 2,000 companies as part of their 2015 Sales Performance Optimisation and Sales Management Optimisation studies, the researchers concluded that the performance of the sales organization improves with better sales coaching. In particular sales skills training programmes which exceed expectations (relative to those which need improvement) resulted in:
- Higher percentage of salespeople achieving quota (65.3% vs 53.8%)
- Higher percentage of deals won (52.6% vs 40.5%)
- Lower sales rep turnover (11.9% vs 19.5%)
(For more detail, download the paper here.)
Tailoring performance gains to your business requirements
So clearly there are gains to be made from an investment in sales skills training – if the investment is properly conceived and implemented. We would also recommend exploring the Chally Group research if you are interested in learning more. According to Chally Group, 39% of business customers make their decision based on the skills of the salesperson rather than price, quality, or service features.
So how can a particular individual or business relate these rather intimidating research papers to their particular requirements? Measuring ROI might be easy for a research firm capable of pooling data across vast quantities of sources, but for a single business it can be difficult to know whether the investment will be worthwhile.
To help with the investment decision, we have put together a useful set of criteria below.
How to Invest in Sales Training & Maximise the Returns on Your Investment
1. Have a methodology for measurement
It is essential to have some sense for the kind of areas in which you would like to see improvement. Although improvement can be difficult to precisely measure and quantify, any learning and development strategy should include a methodology for measurement.
One way of ordering the measurement process is to follow the Kirkpatrick Model of Training Evaluation. This model considers that there are four levels of evaluation at which training effectiveness can be measured:
- Reaction. To what degree participants react favourably to the training. E.g. measurement facilities can include feedback forms immediately post-training.
- Learning. To what degree participants acquire the intended knowledge, skills and commitment based on their participation in the training event. E.g. anecdotal evidence from colleagues/line managers, as well as pre- and post-training engagement surveys.
- Behaviour. To what degree participants apply what they learned during training when they are back on the job. E.g. evidence from line managers, anecdotal evidence, 360 degree work.
- Results. To what degree targeted outcomes occur as a result of the training event and subsequent reinforcement. E.g. whichever Key Performance Indicators (KPIs) have been selected for measurement pre and post intervention.
2. Choose a high-quality provider
Once you have some sort of methodology for measurement in mind (or at least a sense for the areas in which you would like to see improvement), the next thing to do will be to look for a provider. A high-quality provider will be able to help you manage the measurement process, as well as to tailor their services and expertise to your business aims.
The research from CSO Insights consistently emphasises the bottom-line difference between training interventions that ‘exceed expectations’ as against those which merely ‘meet expectations’ or ‘need improvement’ (see above). The training intervention sets up the entire learning process, and it is important to get this decision right.
You should look for a provider with a proven reputation and solid track record. In particular pay attention to the case studies and customer success stories they have available, as well as to the approachability of their people – they should be people you would be happy to work with and to learn from.
3. Ensure on-the-job reinforcement
According to the 70:20:10 principle of learning, most skills development does not occur in the training room, but on the job where those skills can be applied and retained within a working context.
While a high-quality training intervention can help to set up the entire learning process in a positive way, encouraging the application of skills and the socialisation of performance outcomes, it is also important to consider additional ways of embedding the learning back at work. This can include access to reference materials, as well as to post-training plans including accountability buddies, success stories, e-prompts and follow-up coaching.
Perhaps the most important people in carrying out a post-training plan and ensuring on-the-job reinforcement are your managers. Indeed the CSO research paper (above) also underlined the importance of the sales manager in making skills training stick: ‘when managers are trained on how to effectively coach their sales teams, we see better selling skills adoption.’
In partnership with a high-quality external provider, managers should take the lead in ensuring improved selling skills adoption.
Learn more about LDL Sales Training.