For professional athletes who spend all of their time training, the value of it is obvious in terms of races won or medals earnt. Having said that, the value of any individual part of their training can be more difficult to quantify. One specific training session or repetition cannot be credited with all of their success.
For sales people, formal training is just part of their overall development. Seldom can one training course or experience be demonstrated to have helped to close a specific deal. However, like athletes, without formal training, sales people are unlikely to develop the required competencies to close more and bigger deals. However, training is still one of the first things to get cut from a company’s budget and it can be a struggle to get companies to commit to provide it to their employees.
So, what is the value of sales training?
We can look at this in two ways; invest in training to help to retain staff and invest in training to win more business.
Employees, particularly millennials, value training and development much more than most other benefits provided by a company. Pensions, healthcare, bonuses etc are fairly normal now for most companies so training and development is one way of differentiating a company. Those companies that do provide training are much more likely to retain their staff than those that don’t.
There’s a great quote about the value of training that goes something like this:
Manager 1: What if we train all our staff and they then leave?
Manager 2: What if we don’t train them and then they stay?
Research (https://www.oxfordeconomics.com/my-oxford/projects/264283) shows that to replace a person earning an average wage of about £25,000 will cost the company about £30,000. Sales people typically earn much more than this so for the purposes of this, we will assume a replacement cost of £50,000.
If a company invests in one week of training per year for a team, this might cost as much as £10,000. On its own, this feels like a big expense. However, if that training ensured that your employees stayed with the company, that £10,000 is saving you £50,000. In addition, if you have a team of 5 people and you have in-house training, that cost is split between the team and now you are spending £2,000 to save £50,000. That’s a reasonable return on any investment!
The longer that you keep a sales team together and develop their skills, the more effective they will be and the more business they will generate for you. An IBM study (https://www.ibm.com/training/pdfs/IBMTraining-TheValueofTraining.pdf) found that companies that invest in regular training for their teams improve the performance of those teams by about 10%.
If a company generating £1,000,000 per year from a sales team of 5 people improves the performance of their team by 10% in a year, they will earn an additional revenue of £100,000. Again, if that investment costs £10,000, then that is a 10x return on the investment. Again, a pretty reasonable return!
So, while it is impossible to quantify the benefit of training, I believe that there is enough evidence that investing in training will deliver a significant return on the investment, both in retaining quality staff and improving their performance to drive additional revenue. Based on the calculations above, a £2,000 investment in each member of your team could deliver £70,000 of value. What’s not to like about that?