Today’s post is by Mark Magnacca, president and cofounder of Allego.
While the majority of (if not all) sales organizations recognize the importance of sales training and enablement, the true value of these practices can be hard to quantify. Anecdotally, the value is there, but how can these investments be justified before, during, and after implementing new training tools and programs?
While quantifying ROI is a highly specific task that will vary depending on unique business goals, there are a few standard metrics that can help sales trainers champion the benefits of new tools and training techniques. Keep reading to discover the ROI insights we’ve gathered that deliver the most bang for the buck when it comes to more thoroughly capturing and measuring the business impact of sales learning investments.
New Standards in Sales Training ROI
Activity and engagement metrics, while important, aren’t actually any type of “R.” Cost savings – particularly related to travel or the decrease in lost selling time from training that takes reps out of the field – is the easiest and most commonly measured type of ROI. And it’s “hard” dollars, the kind CFOs love. However, these metrics do not represent the full ROI of sales training programs.
Teams looking to implement new training programs have the potential to revolutionize the way they measure ROI. So, how should you go about it? In short, it’s all about getting the right systems in place so employee feedback and performance can be easily tracked.
Here’s the deal. Increased revenue comes from faster proficiency with new sales content – boosting sellers’ competency and providing better, faster access to relevant content. To put a dollar value on this, sales organizations can capture specific deal impact, before-and-after metrics upon implementing a new tool, and use A/B testing and control groups to measure against different regions or sales groups.
Let’s look at an example from the financial industry, where a single deal can bring in millions of dollars. Tracking the impact of new training techniques on a specific deal can be done by putting a robust win reporting program in place, where teams can more easily capture how that deal was won and identify the knowledge and training that went into it, such as how a specific objection was handled. Concrete examples such as this, when collected on a large scale, can paint a picture of true ROI for a specific training tool or practice.
Another way to track ROI is to identify a specific metric and then track improvements to that metric over time. This is called lift. Focusing on improvements among low to mid-level performers before and after a specific tool or technique is implemented can be especially telling.
For example, a medical device company we work with looked at quota attainment before and after a new training tool was introduced. Region by region, they divided reps into high, mid-level, and low performers and, year over year, looked at performance after changes were made to their training programs for insight into how their new training program was performing. Other metrics to measure lift include pipeline growth, sales productivity, win rate growth, and ability to hit quota.
To further confirm that these year-over-year metrics are not inflated by an external influence (for example, industry changes or the closing of a competitor company), a new training tool can be rolled out to a specific group while training in a control group remains the same. This type of ROI tracking is the gold standard for measuring lift and can provide sales organizations with the most conclusive evidence that a training program is (or isn’t) effective. These metrics demonstrate improvement because a certain action was taken – a more meaningful metric than simply tracking anecdotal deal closings or quota attainment.
Conclusion: Sales Training Creates More Engaged Sellers
Hard cost savings provide the most concrete and easy-to-quantify ROI for sales learning technology. But we hire sales reps to bring home the bacon, not save on beans! By more rigorously assessing the business value sales training creates, sales trainers can separate what works from what doesn’t, prove their team’s impact, be a more effective champion for initiatives, and win additional resources.
Additionally, when teams sell successfully, they feel more fulfilled and engaged – and having happier, more engaged sellers lowers costs and further boosts revenue. Clearly pointing to positive impact lets training and enablement teams more effectively advocate for the tools that will make a real difference. And, upon a closer examination, teams may realize they’re delivering even more ROI than they thought!