To Train or not To Train – That is the Question!

If you’re a sales person, you might be asking yourself, “Self, (that’s what I call myself) should I invest several thousand dollars in additional training?”  Do I want to invest that much in me?  Am I worth it? 

There are some situations where “No” is the right answer to these questions and some cases where “Yes” is the right answer.

Let’s address the situation where it would not be fiscally justifiable for you to invest in additional training for yourself.

1. If you are very near retirement and never plan to draw an income from selling again.
2. Your work is in a retail environment, you are on salary – no commission and selling more would mean nothing to you or your family financially.
3. You are untrainable.  In other words you are the best you can be and there is nothing offered by anyone else that could make you better.

If any of the above represents your situation you can stop reading any further and take a nap.  It will benefit you more than continuing on in this column.

However, if these previous situations do not represent you or the salespeople that work for you, then the following information should prove interesting. 

SURVEY SAYS… 

Now I am not a fan of polls and surveys, especially in today’s political arenas.  I often feel you can make the results of these polls say what you want by slight modifications in the way you present the question to the pollee’s or by disclosing just some of the results and combinations that will imply the results you’re looking for.  You also can be selective at who you poll.

None the less, an American Management Association (AMA) survey of companies involved in downsizing in 1995 indicates that those companies that increased the training of their people that year (1995), over the previous year saw a whopping 28% increase in profits from those companies that reduced their training.  Also, overall productivity increased by 13%.

Take the percentages from above, factor in your confidence levels in surveys and apply them to your profit and productivity numbers. Now let’s assume your training is reinforced with continuing education and coaching so that what was originally learned was not lost or forgotten.  Multiply your increases per year times the average longevity of a salesperson in your company.  That’s the number that results from effective sales training.

For example let’s say the average sales person in company X produces $400K in gross margins each year of $1MM in gross sales. The longevity (length of time in sales) is 7 years.  Here could be the results at the rate quoted in the AMA survey.  First year; 28% x 400K = $112K.  Year 2 and 3, another $112K minimum each or $784K additional gross profit/(Average) sales person (not including additional revenue from the cumulative increase).

So ask yourself this question.  How much can you afford to spend on training and coaching if it will produce a 28% increase in Gross Profit per year? What is a good return on investment  (R.O.I.) for you?

Bottom line: Training your sales people and reinforcing so it is not lost produces impressive results.

I have heard sales executives say, "What if I spend the resources to train one of my questionable sales persons and they leave?"  I can't remember where I heard this answer from, but it sure makes sense. "The only thing worse than training a sales person and having them leave, is not training them and having them stay."  Think about it.