BEGIN WITH THE RIGHT SALES MANAGER

Perhaps the single most important thing that a firm can do to gain a competitive advantage from its salesforce is to hire the right sales manager. The research shows that whom one recruits is important, but it is probably not as important in determining salesforce performance as what sales managers do with the recruits — and to the recruits — after they have been hired.

In most progressive firms sales managers are involved in the “big picture” of planning. Perhaps that is why 82 per cent of top-performing sales organisations in the USA mandate formal sales training.

Surprised? You shouldn’t be, because they are people who interact with our customers every day!

WHY DO FIRMS NEED SALES TRAINING?

A survey of 70,000 business decision makers found that 39 per cent of purchasing decisions depend on the effectiveness of the sales rep, a larger portion than any other aspect, including price, product or service.

Not only is training important in developing effective salespeople, but also in keeping them. One comprehensive study of salesforce effectiveness found inadequate sales training to be a driving force in turnover. Online retailer Furniture@Work, for instance, credits sales training with reducing its attrition rate by nearly 90 per cent in just 12 months after it implemented sales training.

Most organisations need sales training of some type, perhaps because of inadequacies of current training programmes, and/or because new salespeople have joined the organisation. Thus, an ongoing need exists to conduct sales training to improve salesforce performance.

It should be stressed that the need for sales training is continual, if for no other reason than that the sales environment is constantly changing.

HOW MUCH TO INVEST IN SALES TRAINING?

US companies spend approximately US$15 billion per year on sales training, averaging about US$2,000 per year for each salesperson. The time and money spent on sales training varies, however, by company and industry.

A survey of sales practices at 1,500 US organisations found the amount spent on training, per sales rep, varied from none, at slightly over two per cent of the respondents, to more than US$7,500 at 7.5 per cent of the respondents, with most (24.7 per cent) reporting expenditures of between US$1,501 to US$2,500.12.

Now if only we could get that data for my native Jamaica!

SALES TRAINING AND THE FIRM’S ROI

A survey of sales executives from more than 1,500 companies found that sales training, when properly applied, produces a positive return on investment.

One survey of more than 2,500 firms found that companies that invest more in training have a 45 per cent higher median total stockholder return the following year than companies that spend the market average and an 86 per cent higher return than those spending less than average.

The survey also found that companies offering ongoing sales training are 10 times more likely to create peak-performing salespeople than companies that do not.

Furthermore, some research indicates a positive relationship between training expenditure and a firm’s share price. It is no wonder that the top 100 training companies consider training a competitive advantage to their business.

TIME REQUIRED BY THE SALES MANAGER

Sales managers must spend much time in the time-consuming details of implementing training, such as the following:

o Arranging for salespeople to work with key personnel in various departments in the firm to familiarise them with the functions of those departments

o Selecting literature, sales aids, software, and materials for study

o Enrolling salespeople in professional workshops or training programmes

o Accompanying salespeople in the field to critique their sales behaviour and reinforce other training

o Conducting periodic training meetings and professional training conferences.

NEXT WEEK’S DISCUSSION

Sales training is indeed expensive! Next week we’ll examine a model for the judicious analysis, planning, and implementation of a sales training programme.

Herman D Alvaranga is president of the Caribbean School of Sales Management. Please E-mail him at hdalvaranga@cssm.edu.jm