does your sales training program

Does Your Sales Training Program Address Your Sales Performance Issues? Part

1

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Here s a Proven Method to Target Sales Skill Training to Resolve Sales

Performance Issues

Sales training programs encompass a variety of necessary components;

things like company policies, sales paperwork, CRM/sales force

automation orientation, sales processes, company services, sales skill

training and product features and benefits.

But when I ask Sales executives and Sales trainers how their current

sales training program is aligned with their sales performance issues

I get the look of No speak English .

Let s first categorize Sales performance issues . There are (4)

distinct sales performance silos that will effect the overall outcome

of any sales team, year in and year out. They are:

% of Sales reps to Quota

Average New-hire Ramp-to-Quota in months

Sales Employee Turnover rate

Time spent versus Result achieved

This is a good place to start in determining what sales skill training

to implement to achieve a measurable return on investment. But here s

what will set you apart when you walk the request up to the front

office. Start out with the NUMBERS.

That s right. Take a diagnostic view of your current sales performance

silos, one by one.

Let s look at a real sales performance issue example of Average

New-hire Ramp-to-Quota . I recently conducted a Sales Performance

Improvement Blueprint web-cast for this sales organization.

The company was hiring 155 sales reps per year. The ultimate objective

of any new-hire sales training program is to ramp the new sales rep to

Quota. Simply, give them everything they need to effectively reach

their monthly sales goal.

So how was this company doing? They were obtaining this ultimate sales

training program objective in 7 months. So how does one determine if

that training outcome is a Sales Performance Issue ? Let s take a

look.

Step 1: Run the Numbers for any realistic ROI opportunity

Each new-hire rep had an ultimate quota of $3500

Sales Cycle was 17 days

Average customer term agreement of 36 months

Average Sub-Quota revenue per month during ramp of $1300 (This number

reflects the average monthly revenue a new-hire achieves before they

achieve quota attainment)

Step 2: Run the Numbers hypothetically for a 1 month improvement

In this case, I showed the sales management team what return on

investment they would get by helping just 1 sales rep achieve full

sales quota in 6 months versus 7 months. Based on their numbers my

diagnostic system showed them a ROI of $79,200 just by trimming off 30

days. If they did that for all 155 of their annual new-hires, they

could realize $12,276,000.

And that got their attention. So, is it now a worthy sales performance

issue to attach pin-point sales training to? Not quite yet.

Step 3: Run the Numbers for a Reality Check

The most successful businesses and certainly, sales departments have

identified their Key Performance Indicators (KPI); individual gateways

that directly effect the outcome of a particular process. Then they

measure the competency ratios in line with them.

A good KPI example in the sales process might be how many times you

advance the first sales appointment to the next phase, whether that s

a demonstration, a site visit, a survey or a proposal. Another KPI is

how many times you gain a new customer once the first gateway is

passed. And when you do gain a new customer, what s the average

revenue you achieve? And how long does it take to gain a new customer

on average; i.e. sales cycle?

How about how long it takes you to gain 1 new sales appointment,

defined by sales prospect conversation ? And as a by-product of all

this, how many new appointments are needed each week?

We ran these numbers in the system to see if and where there were some

leaks in the KPI ship . And here s what we discovered; not a leak, but

a big ole fire hose.

Two KPI issues were apparent. First, why does the ramp-to-quota for a

new-hire take 7 months when the average sales cycle is 17 days?

Second, they were only setting 3 new appointments per week when they

needed to set 6, based on their other KPIs. So their sales appointment

activity barometer was only running at 50%. And that will dictate a

longer ramp-to-quota.

Dig a bit deeper in the system and out popped a 6%

conversation-to-appointment ratio; they had to conduct 15 prospect

conversations to get 1 new appointment.

OK, back to the Reality Check . Is it realistic to focus on reducing

the new-hire ramp-to-quota from 7 months to 6 months for a sales

training ROI of $12,276,000 or $79,200 per rep?

You bet it is. These folks needed to address the front-end of their

sales process; setting targeted sales appointments. To do that, they

needed (1) establish an activity standard to reach quota by month six

and (2) develop a sales prospecting methodology and supporting system

to spend less time in achieving it.

Then they needed to plug their sales prospecting system into their

current sales training program and work to a weekly sales appointment

activity goal to assure a monthly revenue result by month 6.

Step 4: Set the Goal and Train to It

A sales training ROI goal of $12,276,000 or $79,200 per rep is for

sure a worthy one. And the diagnostic system showed us they would meet

this goal just by setting 3 additional sales appointment per week per

rep; 6 appointments versus 3.

Actually, I lied. The system showed an even brighter picture if the

sales appointment activity standard of 6 new appointments per week was

met. If they could support their new-hires with a sales prospecting

system that could help them achieve 6 new sales appointments per week,

they would actually cut their new-hire Ramp-to-Quota by 4 months; from

the current 7 months down to 3 months.

And that sales training ROI would be $316,800 per rep or a whopping

$49,104,000.

One of the reasons why sales training fails is a failure to define a

useful objective. In this case, our diagnostic method has defined a

single useful objective for them to train to. And this same diagnostic

method can be utilized if you have a Sales Performance Issue of an

unacceptable percentage of Sales reps reaching Quota each month.

In Part 2, we will take a look at (2) other sales performance issues,

Sales Employee Turnover rate and Time spent versus Result achieved