Measuring the ROI from your IT Sales Training
The present-day competitive nature of the IT business climate needs no introduction. With the continuous advancement of technology, sizeable competition, and spurious differentiation that exists for nearly every IT product or service, sharp sales competence forms one of the key drivers to influence business success and growth.
In that regard, having in place, a strong sales team can be considered to be a huge advantage in terms of defining the difference in success rates between any two tech businesses.
As per a world-class sales benchmarking study that looked into what makes B2B sales tick, it was concluded that the caliber of B2B sales person formed the most important part of influencing an average prospect’s decision to purchase.
This finding does make intuitive sense as well, since a well-skilled sales team helps to –
Acquire increased business opportunities
Close more sales (in terms of number of deals and deal size) and thereby amplify revenue
Win the loyalty of existing customers, fueling repeat purchases in the dynamic IT business environment
An analytical study conducted by sales and marketing effectiveness research firm – CSO Insights, suggested that companies who invested well in the training of their salespeople attained measurable improvements in achieving their sales targets while closing an increased number of deals and attaining lower sales rep turnover rate.
The Growing Business Case for Investment in IT Sales Training
On account of the universal benefits of a highly competent sales team, progressive technology companies across the United States have been noticed to be investing heavily into developing the skillset of their sales professionals.
As per a report from the Association for Talent Development, companies on average are spending almost $2,400 per team member per year on sales training in current times.
Interestingly, according to a study cited in Forbes, leading technology companies have been revealed to have benefited with as much as 353% Return on Investment (ROI) from the money they have invested in training their sales teams.
While these numbers do suggest wonders in terms of the impact of sales training on the bottom line, measuring the ROI from case to case is vital for any given business.
After all, the company-specific ROI measurement helps to –
- Justify the dollar cost of the investment that goes behind sales training and coaching
- Eliminate those training expenditures that are not particularly useful any more
- Choose an appropriate training partner or process in future
- Gain future investor support for spending on growth-oriented programs
The Practical Difficulty in Accurately Capturing the ROI
While it is extremely simple to measure the “Investment” value in terms of the number of dollars spent on IT Sales Training, the measurement of the value of the “Return” aspect is equally hard to arrive at.
After all, the return is looked at differently by different individuals and would ultimately be dependent on a concoction of interlinked factors. Moreover, the return could also be linked to qualitative aspects such as productivity, which may be difficult to single out or summarize in terms of an exact number or dollar equivalent.
Specifically talking of IT companies that have typically long sales cycles, the results could also be well pushed into the future, demoralizing the instant gratification mindset that we as a world have developed today.
An Effective Framework for Measuring ROI from IT Sales Training
No matter how tricky delineating the ROI from sales training can be, it is extremely important to have a robust framework in place to ascertain the worth of the money spent on training.
After all, IT sales training costs significantly, both in terms of fee, and the opportunity cost in terms of working hours lost due to attending training by employees.
The following steps can be useful in arriving at a meaningful understanding of ROI from budgets allocated towards sales training –
Start with defining what ROI means for you
The foremost step to follow for accurately measuring the ROI from IT sales training expenditure is to clearly outline the key areas where you’re seeking to achieve results concerning the training investment you’re making. Without a clear vision of the same, it will always be tricky and uncertain to arrive at any kind of valid ROI or post-training benefit analysis.
While the most obvious factor, in this case, would be to watch out for an increase in revenue or profits, looking at it in isolation is not optimal as final sales closure depends on many other factors as well such as type of product, its functionality, and uniqueness concerning competition, pricing amongst others.
Instead, helpful metrics to capture the ROI from IT sales training could be to consider the observed changes in the call to meetings ratios, the number of meetings, changes in the duration of the sales cycle, the number of new customers acquired, the average change in deal size and so on.
Moreover, an often-ignored yet essential component of ROI measurement remains the impact of training on team member motivation, satisfaction, and thereby their retention numbers. As per Forrester Research, turnover of B2B sales reps can be very costly and contribute to a sales productivity loss of about $2,00,000. Good sales training programs have the potential to significantly mitigate the risks as they boost morale and make the people feel that the company is investing in their success.
Get your baseline measurements ready
Once you have gathered an idea about where exactly you want to observe changes post the training, the intuitive next step is to start collecting the baseline numbers – well in advance even before the training program starts! After all, the “after” figures have to be examined relatively for the “before”.
The earlier you begin with this baseline data collection and the more data you have recorded in detail, the better poised you will be to accurately know the impact of your investment in sales training.
Ideally, you should attempt to gather data at the aggregate level and the individual-specific level to get deeper insights and understand which group is benefiting the most and what is influencing their success.
Pay attention to Return on Expectations
As you further embark on the journey towards measuring ROI, it is also vital for you to acknowledge the relevance and importance of ROE (Return on Expectation) and how it forms a prerequisite to realizing meaningful ROI.
ROE essentially seeks to capture the extent to which the salespeople undergoing the training programs meet the behavioral targets expected out of them with the new knowledge. In other words, how sticky is their learning from the training, and how far they are being able to practically apply their lessons to their daily routine?
In case you do observe a noticeable behavior change, you can then proceed to attempt to measure whether the renewed approach is tied to any measurable financial gain or not.
Some areas to look for behavioral improvements could include phone or email etiquette, general relationship-building skills, or having a consultant’s approach over that of a salesman.
Broaden your Analysis Perspective
As you make note of the different behavioral changes and financial impact due to the time spent on sales training, it’s also important that you simply don’t just account for the pre and post-training differences. In other words, not just look at the eventual before-after outcome, but instead also consider the ongoing story between adjoining sales cycles.
For instance, a more accurate representation of ROI could come if you observed changes between two consecutive stages in the sales cycle rather than between the first and the last. For example, measuring the success rate from cold calls to closed deals is suboptimal compared to measuring the success rate of cold calls to pipeline additions to meetings. Doing so helps to track step-by-step changes or improvements in otherwise long, multilayered sales cycle duration.
Closely watch the Learning Management System
If the IT sales training program that you’re investing in offers online learning, certain measurements can get significantly simpler if you start keeping a close watch on the Learning Management System (LMS).
If you and your training partner run online surveys of team member feedback on the learning platform, you can get a quick sense of whether the knowledge is resonating with your people.
Moreover, by closely monitoring the data on the LMS dashboard, you can get to know what exactly is impacting your ROI or ROE. For that, you could watch out for insights on which modules are turning out to be the most popular, which set of employees is doing well in training, or who needs further coaching.
Studying these trends can equip you with the knowledge of common learning habits, identify the better performers and use that knowledge to guide the team members who are lagging. This would help in measuring and simultaneously also maximizing ROI for the training.
Concluding Thoughts …
The growing size of the IT sales training industry well documents its vast potential in empowering technology firms to achieve their business objectives. IT companies across the United States are heavily investing in training their sales teams to thrive and grow in the overly competitive business landscape.
However, mere dollar investment in training is not enough to reap desired outcomes in terms of growing business and revenues. What’s simultaneously needed to be successful from training investment is the careful selection of training programs and partners, with a clear understanding of the guiding whys. To arrive at that understanding and optimize outcomes from the spending; calculating ROI from training becomes critical.
Even though measuring the exact “return” can be tricky as compared to accounting for the “investment”, having a well laid out framework for measurement helps.
A good way to go about it includes first outlining the outcomes expected from training, proper measurement of baseline numbers, focusing on Behavioral Changes along developing a broad analytical perspective. Finally, in the case of online sales pieces of training, closely monitoring the LMS activity also helps significantly.