Measuring Sales Training Effectiveness
You’ve seen those enticing ads in magazines or on the Internet claiming you can double or even triple your sales overnight if you purchase their sales system or take their training. Don’t believe them! Anyone who makes those claims is making just that, a claim, and probably an unsubstantiated one at that.
Most sales managers, and almost every professional sales training organization, have wrestled with the challenge of trying to prove that sales training will produce results, increase sales productivity, or improve sales force effectiveness.
Is there a way to measure the results of sales training? I don’t know, you don’t know, and without a lot of resources to run an elaborate and expensive controlled test along with the ability to control world events, it’s a safe bet that neither of us is going to find the ultimate answer.
If it were just a matter of conducting the training and watching for an increase in sales, there would be no problem measuring the effectiveness of the sales training. Unfortunately, there are simply too many other factors involved.
Poor Training, More Sales
Let’s assume you get some sales training that, unfortunately, misses the mark. You would expect sales to remain the same, or perhaps even drop, as a result of the demotivating effect of the poor training. Not necessarily so. If, during the evaluation period, one of your competitors goes bankrupt, you bring out a new and innovative offering, and the economy takes an unexpected upturn, your sales are likely to go up.
Great Training, Poor Sales
On the other hand, let’s assume you get some outstanding sales training. In addition, you’ve done the post-training exercises and are in the field coaching the troops to make sure they are using the principles taught during the training. You would expect that your sales should take off. Maybe, maybe not. What happens if, during the evaluation period, a competitor reduces its prices dramatically, you lose two of your best salespeople, and one of your major clients puts a buying freeze into effect? Your sales could go into the toilet no matter how good your salespeople are.
The point of these two scenarios is, no matter how good or poor the training, there are a host of other factors that make it very difficult to measure the effectiveness.
It would be nice if you could eliminate or neutralize the problem of the impact that the marketplace and world events have on your sales, but you can’t. What you could do is run a test where you establish a control group who receives no sales training and compare their results against a second group who receive the training and follow-on coaching. Both groups would be equally affected by these outside influences.
There are two reasons why this is unlikely to work well. One is that you need enough people in each group to make it statistically valid. For example, you would need a group size of 15 people in order to have a margin of error of 25 percent (at a confidence level of 95 percent, or 19 times out of 20), which means you need 30 salespeople, 15 for the control group and 15 to be trained.
The second problem is that the ones not being trained (the control group) are likely to be annoyed and, knowing the competitive nature of most salespeople, they would probably end up putting in extra effort so the trained group doesn’t leave them behind.
Interestingly enough, the end result is that both groups are likely to see increases in effectiveness with the trained group doing somewhat better.
Training works, even if you can’t always quantify the results well. If nothing else, the Hawthorne Effect kicks in and you get a momentary boost in sales. The Hawthorne Effect gets its name from the late 1920s study that was conducted at the Hawthorne plant of Western Electric in Cicero, Illinois. Researchers were doing a study of the effects of lighting and other conditions on employee productivity. To the researchers’ amazement the employees’ productivity improved no matter whether they increased or decreased the light intensity. They came to the conclusion that the increases in productivity were a result of giving the employees attention. Training can have the same effect on your salespeople.
The problem with the changes brought about by the Hawthorne Effect is that they are not long lasting. People tend to fall back into their old habits and productivity levels off once the “attention” disappears.
Making Permanent Improvements
Here’s a two-step process for making sure you get the biggest bang for your sales training investment.
1. Select the right training (and while you’re at it, the right sales training company). There is little benefit in providing major account selling techniques to salespeople doing transactional-type selling or relationship/consultative sales training to salespeople in the retail trade. Make the right fit.
2. Put a system in place to make sure your salespeople are using the skills they learned during the training. If you don’t do this, they will fall back into their comfort zones and stop using their new-found techniques.
Measuring Sales Efficiency
Probably the simplest way to measure sales efficiency is to divide the salesperson’s sales by their income. This can be done monthly, quarterly, semi-annually or annually. For example, if a salesperson’s annual sales were $1,500,000 and she made $80,000, then her efficiency factor would be 18.75. If another salesperson sold the same amount but made $90,000 that person’s efficiency factor would be 16.67. The higher the number, the more efficient the salesperson.
If you want to get an even more meaningful measure of sales efficiency, divide the margin (profit, not gross sales) by the salesperson’s income plus expenses.
Using this technique, we now have a way to properly evaluate sales training effectiveness. Establish a baseline of the team’s, or individual salesperson’s, sales efficiency before the training and then redo the measurement two to three months after the training is completed and compare the results.
Done well and properly supported, training does work. You may indeed double or triple your sales (if they were really miserable to begin with), but probably not. However, think about what a five to twenty percent increase in sales might mean to your bottom line.
Now that’s worth thinking about.
For more information on this topic, please see how our sales improvement programs can develop The Right Skills.
Salesforce Training & Consulting is a professional sales training firm and registered Salesforce.com Consulting Partner based in Toronto, with offices in Boston and Chicago, providing sales coaching, sales management consulting, salesforce implementation, sales training and sales personnel assessments.