I was speaking to a highly data-driven company the other day. They were concerned about their ability to measure the effectiveness of their sales training in terms of return-on-investment. While ROI measurement is possible, you’ve got to start the process well in advance. It is very difficult, if not impossible, to select a training course to measure ROI on retrospectively.
For starters, training isn’t always measurable at an ROI-level. What is measurable, though, is whether sales reps are doing what they were taught to do. This is called “return-on-expectations” (ROE). Assuming that sales reps are applying what they learned, you can measure whether what they are doing is getting results using sales metrics that you already have in place. Don't invent anything new.
You can then measure the value of those results against your investment. For example, if you invested $100k on the sales training and you only saw $50k in new sales as a result of sales reps applying what they learned, you are out $50k and are not realizing a return on your investment.
This situation has some pretty big implications for how you go about measuring the ROI of sales training. Here are five “rules” to help you measure ROE and ROI.
#1: Have Real-World Application
Whether it’s a new closing technique or prospecting process, you need to know that what you are training sales people to do actually works in real life. I stress “real life” here. Too often, something seems like it should work—logically, that is. But for whatever reason, it doesn’t work or unanticipated consequences cancel out the benefits. This is why it is critical to make sure that what you are training sales people to do consistently achieves results.
In other words, you need to demonstrate the link between performance and results. Ideally, sales management has already been established this link. In fact, the training should be to teach a best practice that sales management already knows gets results.
#2: Know the Value
Speaking of results, before you invest real money in training, you need to know the anticipated value of applying the new skills. For example, if training costs $100k, do you know the value to sales reps? If the value of applying the new skill is an additional $50k in sales for example, it doesn’t make sense to invest $100k in training.
#3: Understand the Details
When you design and develop the training, you need to get into the weeds, so to speak. If the training doesn’t explicitly teach sales reps what to do when they get back to their desks, it is unlikely that they will apply what they learned. Knowledge without application has no value on the job. What’s more, if you don’t get that ROE, you will never realize that coveted ROI.
#4: Get Buy-In—From Leaders and Employees
You need to stack the implementation deck in favor of ROE by enlisting the support of the sales manager. Sales managers need to make sure that sales reps have an immediate opportunity to apply what they learned. Reps need to know that managers will use coaching and feedback to hold them accountable.
You need to remove any noise from the system. By noise, I mean anything that blocks or provides a disincentive for sales reps to apply what they learned. A common example is compensation. Another example is a competing priority that prevents sales people from applying what they learned. You’ve probably heard the following quote from Deming, “Put a good person in a bad system and the bad system wins, no contest.” This is what he was talking about.
#5: Establish a Baseline
You need to take a baseline measurement before you rollout training. This gives you a way to compare metrics before and after the training to see if you realized any ROI. If you didn’t get the results you hoped for, check to see at what level sales people are applying what they learned. Remember, if you don’t get an ROE, you won’t have an ROI.