February 2nd, 2015

You Can’t Afford Free Sales Training

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You Can’t Afford Free Sales Training

A client once told me that even if a competitor were to offer free sales training courseware and tools, it would not be wise to accept.

So why is free sales training not a good enough value?

The short answer is that the cost of the courseware itself is almost always the smallest piece of the overall expense for any sales training and performance intervention.

The following two categories dominate the cost of sales training and deserve greater consideration before moving forward:

  • Lost selling time — This is, by far, the largest and most important cost category to consider. If you take a salesperson out of the field for a material period of time, you lose sales revenue and, most importantly, it is a significant expense. It’s pure economics 101 at work, with the calculation taking into account the total average revenue per salesperson, the gross margin, the total number of selling days, and the size of the training population. Costs are large, usually very large, but the returns are even higher — if, and only if, you have a quality intervention, sales behavior changes and sales increase. Even a small gain of, say, 1% in sales performance per person post-training can provide a tremendous present value contribution, outweighing all costs by a factor of 10.
  • Out of Pocket Costs — This is the second-largest cost factor, but it is small in comparison to lost selling time. Still, there’s no reason not to control all costs. While basic skills can be learned through eLearning tools or other online delivery technologies, problem-solving and other higher-level skills are most effectively improved in a real-time, instructor-led environment. The expense of bringing people from far-flung locations to a common site can include airfare, car rentals, hotels, meals, and other miscellaneous travel costs and should be incurred only to build skills that cannot be built in bite-sized pieces in the field without impacting sales time.

When you take these factors into account, it’s clear that courseware and the facilitators who deliver training make up the smallest expense category. The problem is that buyers of sales training, often in the Learning & Development group, only have control over this last category. For them, the cost of training courseware and delivery takes a major bite out of their entire budget. They put less focus on lost selling time and out-of-pocket costs because those hit the line organization.

L&D are good stewards of their budget, so “free” training might look pretty good. But, free training that does not change sales behavior as much as a higher-quality intervention can cost the company big bucks. For example, a highly customized sales training program — one that’s aligned with the company’s culture, sales process, actual client needs and situations and requires application of the client’s competitive advantage — can drive significant returns well over the cost to implement.

Trying to save money on training at the expense of quality, fit, and effectiveness is a false economy. Investing in quality can drive major performance improvement, both behaviorally and in top-line revenues.

So, why focus on shaving the smallest cost factor and run the risk of diminishing quality and results? The tradeoff might save the L&D budget, but it’s certainly not in the company’s best interest.

Bottom-line conclusion? With the high return that comes from improving sales performance, companies are almost always better off going with the highest-quality training that can have the most impact on changing behaviors and performance. If a less expensive training program gets that done, fine. But, it’s unlikely to be as effective as higher-quality (and yes, higher cost) ones. Simply put, the cost for sales training programs is but a fraction of the return that can be achieved.

Why would any company take two or three days’ time from the entire sales organization and bring them together for training, only to be parsimonious about the experience and not secure changes in key sales behavior?

That’s why I can say, you can’t afford free sales training. And, you also can’t afford not to choose the highest-quality program to drive performance change.

Complimentary New Research Report

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To download this report, please click here.

 

About The Author: Carter W. Brown

Carter W. Brown, a professional Director and CEO, has focused his career helping professional service firms successfully navigate complex business and cultural changes. Most recently Carter has concentrated on the corporate training and development, wine, executive search and legal industries.



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One Response to “You Can’t Afford Free Sales Training”

  1. February 02, 2015 at 11:55 am, Mike Kunkle (@Mike_Kunkle) said:

    Solid post, Carter. L&D leaders, and especially those involved in sales training (where opportunity losses apply), need to move beyond order-taking to a much more prescriptive, consultative approach. In my experience, this usually requires top-producer analysis and highly-customized training solutions. (The same approach, interestingly, that we expect our sales teams to take with customers. Go figure.)

    There is a flip side, though. A “C” strategy, well executed, often beats an “A” strategy bumbled. Unfortunately, execution doesn’t seem to be a common strength.

    If we’re going to elevate the sales profession and the average capabilities of our sales forces, we’ll need not only the right, tailored training, but an effective learning system – with knowledge sustainment, skills transfer, and coaching to mastery. I find myself preaching this constantly, because they are the other levers to truly driving sales performance with training initiatives. Marry the right content with a strong learning system, and the results are worth the time, energy, budget and resources, and can yield significant sales lift. Without that marriage, even the best content, unused, won’t make a difference. I know you get this, and I know Richardson can help clients with all those elements of an effective learning system. But still worth stating, explicitly.

    I wish we could get more L&D and Sales Leaders doing this, in full force. Maybe this will be the year.

    Stay the course. (Bad pun intended.)

    Mike

    [REPLY]

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