I hope you’re as excited as I am that we’ve finally arrived at The Most Wonderful Time of the Year — the time when we’re all making up our annual wish lists and hoping the big guy with the toys signs off on them.
I’m speaking, of course, of Budgeting Season.
I hope your list includes some shiny new sales training. And to help that wish come true, I’d like to share with you some compelling figures from CSO Insights on the business case for sales training.
CSO Insights surveyed more than 2,000 companies. One of the questions in the survey asked respondents to rate their company’s sales skills training programs. Ten and a half percent of respondents said their programs exceeded expectations; 42.5% said they met expectations and 43.5% said they needed improvement. (Another 3.4% didn’t know.)
These numbers sound pretty dismal. But, hey, they’re subjective, right? Maybe the programs were better than people thought.
Nope. It turned out that respondents were pretty much on the mark, as judged both by spending and actual performance of the sales teams. Specifically, the “needs improvement” group spent an average of $1,815 per salesperson. “Meets expectations” programs spent $2,196, and the “exceeds expectations” group spent $2,870 per rep.
That extra $1,055 per rep turned out to be money well spent. In the “exceeds expectations” group, 69.4% of reps made quota. In the “meets expectations” group, quota attainment dropped to 64.8%. And in the “needs improvement” group, it was only 60.5%.
When researchers looked at win-loss ratios, they found a similar pattern. “Needs improvement” won 44.0% of deals. “Meets expectations”: 47.3%. “Exceeds expectations”: 54.3%.
While the survey didn’t provide actual sales figures, there’s a pretty strong business case to be made that the more expensive training paid for itself many times over. The researchers calculate that increasing win rates by about 10% will boost sales by 20%. So if a rep is carrying a $1 million quota, a great sales training program could increase his or her sales by $200,000. Not bad for a $2,870 investment.
You can do the math for your sales team. Multiply each rep’s quota by 20% and calculate your own ROI.
Keep in mind that these results are neither subjective nor hypothetical. They reflect actual sales by actual salespeople.
The report, which you can download here, offers lots more detail that can help you analyze the business case. I think it would make the perfect gift for the skeptical CEO, CFO or Budget Approver on your list.
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