Investments in sales management training has soared over the last two decades, with U.S. corporations alone spending $15 billion each year, according to the Harvard Business Review. With such high amounts being spent, businesses are understandably keen to measure their return on those investments.
However, the ROI on this type of training is more difficult to measure than it may first appear. Given that the investment can be measured in pure monetary terms, companies tend to want to measure the return in the same way, but this is a flawed concept. Instead, businesses should assess ROI based on three different factors.
Many of the benefits of this type of training can be broadly placed under the umbrella of ‘objectives’. In simple terms, these are measurable things that you hope your sales team will achieve moving forward. Examples can include improved customer retention rates or increased acquisition of new customers.
Ideally, it is best to aim sales training towards achieving specific objectives, rather basing everything on revenue.
“Focusing on sales objectives provides a more direct target for the sales force and its trainers,” says Jason Jordan, founding partner of Vantage Point Performance. “Having a target you can assuredly hit is a very comforting thing.”
Next, it is important to keep track of a sales team’s activities, as these should also be positively affected by this type of sales coaching. Examples of measurable activities include the total number of prospecting calls made by sales reps, or the number of account plans completed. These can also be assessed for individual reps too.
In many cases, there will be a direct link between activities and objectives. For instance, if your sales training advocates making more sales calls, you should hopefully find that, as a by-product, you also increase the number of new customers you acquire along the way, helping you to meet an objective.
Finally, ROI can also be measured in terms of pure business results. With that said, some of these results may take a little while to manifest, as changing the behavior of a sales team takes time, and it may take longer still before these changed behaviors actually produce tangible, measurable results.
The sort of business results you should eventually see include increased revenue, or a greater share of the market. Yet, measuring these sorts of outcomes alone is an insufficient way to assess ROI, because they are more likely to be long-term results, which are influenced by improving sales activities and meeting sales objectives.
This is a guest post authored by Monika Götzmann, EMEA Marketing Director of Miller Heiman Group.