Prove it

How to develop a sales training program that can ensure a return on investment
Question: Until the recent economic uncertainty, my plan for this fall was to conduct sales training for my staff. Now, before they will release budget for training, my board of directors wants me to prove the return on investment I would gain. Is there any way to estimate such a gain?
Answer: In these uncertain times, it’s interesting to observe how different companies approach training. Those that view training as overhead pull budgets during tough times. Others view human capital training as essential as a maintenance plan for expensive machinery. Still others view training as a means of gaining competitive advantage over the competition.
Whatever your motivation for training your staff, you certainly can and should measure the return on investment. Like any other investment, if properly evaluated, properly planned and properly executed, sales skills training should show a return that justifies the investment.
At your next board meeting you can announce that you’re going to conduct sales training at no cost to the company.
To do so, you will need to get some measurements up front. Ask yourself why you’re doing the training in the first place. What would you expect to see as a return? For instance, do you expect your sales staff to gain higher gross margin percentages? Or, perhaps, you want to see each salesperson add two new accounts in a six-month period. I realize that you are speculating here; however, it’s educated speculation. Answering your own questions about the expected returns should impact what and how you train.
Be as specific as possible in terms of the outcomes you project. Make sure you allow adequate time to measure these changes.
Most training results should not be measured for six to eight months after training is complete to allow for realistic implementation and sales cycles.
Then, consider all of your expenses associated with training. Those might include program development charges, materials, meeting space, meals, and participant travel times as well as time away from the job. Compare your projected sales performance increases with your expenses and you will have a fairly accurate ROI.
With that said, an ROI is an estimate of what you expect. There are many other variables that affect performance improvement as a result of training. Simply conducting training will not change behaviors if not coached and supported. We recently designed and conducted an 18-month sales training curriculum for a local firm. Even in tough times, the firm’s margins well exceed others in its industry, and its people are growing, mainly because of the continued coaching that the participants receive to support their training. Training is now a way of life in the company in good times and in tough times.
Here are some of the most common variables that affect ROI from sales training:
— Attitude – If the sales group does not see sales training as pertinent to what they do, training won’t matter. Help make the connection between gaining skills and achieving better performance.
— Evaluation – Make sure you’re training the right set of skills for what you want to achieve. It’s helpful to assess the skill levels of the participants prior to introducing training.
— Method – Select training that is interactive, not lecture-based or with too much reading. A rule of thumb is that the participant should be involved at least 60% of the time and the instructor at 40%. Live or self-study delivery options are both viable means. The method that you choose should appeal to various learning styles.
— Timing – The ideal is to introduce training in small chunks with time between sessions to practice skills. If you attempt to lump training into one event, you may not see as great of return as if you space the sessions. I like to see a minimum of one week and no more than six weeks between sessions.
— Coaching and follow-up – This is very important. The single most common reason that training fails is that it is not supported after it occurs. Sales managers should reinforce skills learned with one-on-one coaching (simply asking questions is a great start) and by conducting reinforcement activities at group sessions.
— Continuous individual improvement – Top performers continually seek to improve and access resources to aid in their continuing development. To encourage your people to seek personal improvement, you may need to hand-feed them a bit by outlining a plan and suggesting specific resources they can access (like books, seminars, riding with top performers). Make sure you reward success.
If you want to know if your sales training program is a worthwhile investment, complete our questionnaire. Fax your name on letterhead to Impact Sales Training Research Department at 501-964-0055, and we will fax you a questionnaire to complete. You will receive a confidential report that helps you decide if your investment in sales training is really an investment or an expense. You will also learn if the “payback time” for your program meets or exceeds corporate averages for sales skills training.
Marcia Gauger is the president of Impact Sales, a performance improvement and training company with offices in Wisconsin, Florida and Arkansas.
October 12, 2001 Small Business Times, Milwaukee