Every year, companies of all sizes collectively invest billions of dollars into their sales training programs. Whether it’s coaching the sales team on new technologies, product offerings, or techniques, a strong sales training program can help you increase the productivity, efficiency, and even the bottom-line revenue of your company. Yet, how do you ensure that a specific sales training program is worth the investment in capital and resources and how do you calculate the return on investment of your sales training program?
How To Calculate the ROI of Your Sales Training Program
The ROI equation, like all good business equations, is straightforward: divide the results of your training investment by the cost of the program.
When calculating your sales training program’s cost look beyond the raw capital cost. A true cost calculation needs to also take into consideration the investment of time, internal resources, and even the opportunity costs of choosing a specific program.
How To Measure The Impact of Your Sales Training Program
Rule 1: Don’t Focus Solely on Bottom-Line Impact
The primary goal of almost all of your training efforts is to grow sales and increase revenue. However, when it comes to calculating the ROI of a sales training program, focusing only on the bottom-line impact is like putting on a pair of sales blinders. You’re not going to see the full picture.
If a training session concludes and the company sees an increase in revenue in the next quarter, can your organization lay 100% claim that the training was responsible? Of course not. Same if the next quarter saw a decrease in revenue.
At any one time, countless factors are influencing your bottom-line revenue, including market conditions, timing, competition, and pricing. Keep direct revenue impact in mind when calculating the results of your sales training platform, but don’t make it the only sales training success metric.
Rule 2: Keep an Eye on Activity Levels
One way to calculate the impact of a training session is to track and monitor the productivity of the sales team post training. Are you seeing an increase in any key productivity metrics? Metrics like:
- Number of calls made/emails sent/meetings set
- A quicker path to conversion
- An increase in prospect touch points
To effectively measure ROI based on productivity, be sure to establish a performance baseline before the training session to have something to compare your post-training results against.
Rule 3: Focus on Close Rates and Conversion Rates Between Sales Cycles
“We had the training session yesterday, why don’t we have more sales today!” Raise your hand if you’ve heard this line before from a senior manager.
If you’re discounting the worth of a training program because it didn’t immediately start driving sales, you’re doing yourself a disservice. No training session in the world is going to eliminate your sales cycle.
Sure, great training might help reduce the time it takes to move someone from being a prospect to becoming a customer or client, but that process is still going to take some time. When evaluating the impact of your sales training program, look beyond just the month (or quarter) where the training took place. Instead, focus on close rates and conversion rates across multiple sales cycles. Analyze the overall impact of your pipeline velocity.
Rule 4: Monitor the Prospect Experience
Between marketing, sales, procurement, and a host of other departments, converting new customers is expensive. It’s more cost-effective to keep current clients engaged over several months, even years, and resell to them repeatedly.
The higher your customer churn rate, then the lower your company profits will be.
As a general rule, the better your prospects’ experience during the sales process the more likely they are to stay engaged with your organization after converting into a customer. By monitoring the churn rate, customer retention rates, and lifetime value, you can determine the impact of your sales training platform better.
Rule 5: Take into Consideration the Type of Training Being Conducted
When determining whether a specific sales training platform was “worth it,” you need to consider the type of training being conducted. The justification for training on a new piece of technology or system might be different than training on a new sales technique or product.
It’s unfair to expect a small tweak in a sales process or minimal investment in training time and materials to produce a 10,000% ROI. Likewise, integrating new technology and products might yield a strong ROI in the long run, but in the short term, it may take some time for the sales team to become comfortable with the new resources.
Identifying the type of training being conducted can also help ensure you’re using the best possible success metrics to determine ROI. For example, if you’re investing in training your sales team to be better equipped to address the business needs of the C-Suite, you should look for an increase in C-suite conversations being had by the sales team, a quicker conversion path, or even more contracts coming through with C-suite signatures.
Set an Evaluation Plan at The Beginning
Calculating ROI should not be a reflective moment. It should be an integral part of any sales training platform. When selecting your next training program, determine ahead of time how you’re going to measure its success. Then create KPI’s that align with that definition.
Be mindful of what you want the sales team to get out of the training before you commit to conducting it. Not only does this make it crystal clear to all involved how success will be measured, but it can also help to evaluate and prioritize how your organization’s training dollar should be invested.
Are you interested in learning more about how to optimize your organizations training? Check out our education page to learn more.