“Money,” wrote Ralph Waldo Emerson, “is, in its effects and laws, as beautiful as roses.” Sales leaders can’t stop to smell the roses, though – they’re too busy balancing priorities to make limited budgets cover a wide range of purposes and needs.
Sales performance improvement is always a top priority. A pattern we see repeated year after year, in companies of all shapes and sizes, is that salespeople or sales teams who didn’t make their quotas last year are still given higher quotas this year. And that gives rise to both a lot of soul searching and an entire performance improvement industry: How does an individual, a team, a sales organization, get better at selling?
Many of the questions that we hear from clients boil down to this: How do we get the biggest bang for our buck? What are the investments most likely to pay off in terms of finding more opportunities, winning more deals, and retaining existing customers? Sales training, especially skills training, is an issue of particular concern.
Our sales performance optimization studies have examined the multiple types of educational programs companies may offer their sales teams, including training on product or services, the customer’s marketplace, CRM system utilization, and sales skills. Let’s concentrate for a moment on “sales skills” and exactly what that means.
During a sales cycle, there are many specific skills salespeople need to use to transform a prospect into a customer. These include prospecting, call planning, relationship building, needs analysis and prioritization, objection handling, purchase justification, consensus building, and negotiations.
A popular saying among researchers in many fields is W. Edward Demming’s remark, “Without data you’re just another person with an opinion.” It seems intuitive, even obvious, that skills training will improve skills, and better skills will result in better performance. That’s a logical proposition, but it’s still just an opinion until the data is collected and analyzed.
In one study, we included a question that asked participants to rate the quality of their company’s sales skills training program. We found that 10.7 percent of the programs “exceeded expectations,” 42.5 percent “met expectations,” and 43.5 percent “needed improvement.”
What the data clearly showed is that effective sales training has a higher cost attached. Companies with sales skills training programs that exceeded expectations averaged spending $2,870 per salesperson, compared to $2,196 per salesperson for companies with sales skills training programs that met expectations, and $1,815 per salesperson with sales skills training programs that needed improvement.
Remember, the question today is, “Is sales training worth it?” When we talk about “worth,” what we really mean is “return on investment.” As the above figures show, a higher investment per salesperson results in a higher level of satisfaction with the training within the organization. What we need to know next is, “Does a higher level of satisfaction with the training correlate with higher levels of performance?”
One objective way to answer that question is to look at the percentage of salespeople achieving or exceeding quota. The research shows an increase in salespeople achieving quota related to higher sales-skills-training-program ratings. How was that increase in quota achievement accomplished? Through better performance on three metrics.
- Win rates: Survey respondents who said their organizations’ sales training exceeded expectations had an average 54 percent of forecast deals won, compared to 44 percent in the needs-improvement group.
- Deals lost: Participants in highest-ranked training programs reported about 5 percent fewer losses than their counterparts in the lowest-ranked programs.
- Deals ending in “no decision”: Here again, effective training made a significant difference – 20.5 percent of deals ending in no decision in the top group, contrasting with 26 percent of deals ending in no decision in the bottom group.
Quota achievement and deal outcomes make a strong argument, not just for sales skills training, but also for choosing an effective training program. We can also examine the research data from two other aspects of B2B selling:
The ability of salespeople to differentiate their offerings from those of the competition. The saddest story in sales is, “We had a better solution for this customer, but the other guys told a better story.” Competitive differentiation is an area where sales training that “exceeds expectations” makes a huge difference: 80.3 percent versus 51.5 percent in the “needs improvement” category.
The ability of salespeople to align their solutions to the customer’s needs. If differentiation is what keeps the win from going to a competitor, alignment is often the element that keeps the deal from sinking into the swamp of no decision. And as with differentiation, the research shows a difference of about 30 percent between the top-ranked and bottom-ranked training programs.
There is a lot more to this story. Consider the difference between a 54 percent win rate and a 44 percent win rate. Think about the size of your deals, the number of your salespeople, and the cost-per-salesperson of effective skills training. The math isn’t hard, and the results should be clear and unequivocal: sales training is an excellent investment, and Ralph Waldo Emerson would approve.