Should you or should you not train the sales team?
This has been a persistent dilemma with the sales leaders. The cost-conscious leader worries if the team leaves after the training, then it will be a wasted effort.
And the growth conscious leader worries if an untrained team continues to stay on, then it will be harming the overall team engagement & productivity.
The bigger problem is carrying on with a team that’s working below their highest potential.
Having regular sales training for the team is a strategic move that can yield substantial returns. A well-trained sales team forms the company’s USP and fosters loyalty both from customers & the team.
Here are some key ROI of Sales Training
1. Companies that invest in sales training are 57% more effective at sales than their competitors (source: Task Drive)
2. On an individual level, sales training can boost sales representatives’ performance by an average of 20%. ( source: Spotio)
3. Sales training reaps a staggering 353% ROI for the average company. In other words, for every $1 spent on training, you can get upto $4.53 as ROI. (Source: Task Drive)
4. Continuous training is said to result in 50% higher net sales per sales rep. Successful salespeople need continuous training, not one-off workshops. (source: the Brevet Group)
5. Comprehensive and regular training programs can reduce employee turnover rates and retain top talents
6. Well trained sales team are adept at addressing customer needs thereby reducing the sales cycle
7. A trained sales force will be able to educate the client and customize their solutions. This builds stronger client relationships that leads to higher customer satisfaction and loyalty.
It’s quite evident that investing in sales training yields returns across various facets of business performance. Because ROI is not just financial numbers, it also includes employee retention and customer satisfaction.
Now that it’s established that there are clear cut yields generated from having a well-trained sales team, the important question that sales leaders struggle with and which could be one of the main reasons for their hesitations towards training their team is
What metrics to measure to calculate the ROI of sales training?
- There are a few challenges in measuring sales training ROI
- The impact of sales training is not immediate. There is a time lag in seeing results.
- Some of the changes are behavioral that can be difficult to quantify.
- It’s hard to determine if Improved performance is directly attributable to sales training.
- Many leaders struggle with data collection and analysis when it comes to tracking performance change.
Key Metrics For Measuring Sales Training ROI
1. Revenue Growth
It’s the most straightforward metrics to measure. And since revenue growth is the ultimate goal, it becomes the clearest indicators of ROI.
How to measure: Track revenue before and after training intervention. Find trends & correlations between the training program and noticeable needle shift in sales performance
2. Sales Productivity
It means measuring the efficiency of the sales team. Improved productivity means the team is effectively managing time.
How to measure: Calculate the ratio of revenue generated per salesperson or per hour worked. Analyze whether this figure improves post-training.
3. Customer Acquisition Cost ( CAC)
A lower CAC means the company is spending less to acquire each new customer, improving profitability and the overall efficiency of the sales process.
How to measure: The formula to calculate CAC is
Customer Acquisition Cost = (Sales expenditure + Marketing expenditure) / New Customers Acquired in a given period.
Keep a track post training if this value is lowering.
4. Sales Cycle
It measn the time taken from the initial contact to closing the deal with a client. A shorter sales cycle means faster revenue generation. It also frees up the capacity of the salespeople to handle more deals.
How to measure: Use the formula
Total number of days taken to close all deals / Total number of deals closed
Look for reductions in the conversion ratio.
5. Win Rate: Its the percentage of deals successfully closed. A trained sales team will be able to minimize objections and improve the win ratio.
How to measure: Use the formula
Number of closed deals/ by the total number of opportunities.
Compare win rates before & after training programs
