Investing in sales training pays off

Folio: The Magazine for Magazine Management, Nov 1, 1990 by Hershel Sarbin

Investing in sales training pays off

In all my seminars on growth and profitability, I emphasize the role that training, particularly sales training, played in helping Ziff-Davis achieve dominant positions in so many special interest markets.

On every occasion, at least one of the seminar participants points out (and others nod in agreement) that Ziff-Davis could afford sales training, whereas "My company cannot afford the luxury of spending money on that sort of thing."

The facts are that Ziff-Davis started doing sales training when we were very small--and one of the things that allowed us to grow was that our training program built depth in our staffs in a way that permitted us to move talent around when we wanted to expand. Today, in its computer magazine operations, the Ziff organization emphasizes training just as it did in the sixties, seventies and eighties.

In these times when share of market is the name of the game and ad dollars are hard to come by, every publisher who sees advertising revenue as a key source of profitability should be instituting sales training programs as an integral part of management development programs.

Knowing what works

The question remains: How do you design and deliver cost-effective training, and how do you measure the results? Here are some basic ways to examine these questions:

1. Determine whether the people in the training program learned what you intended. When dealing with telemarketing, it's a simple matter to monitor telephone solicitations. For the most part, however, you have to rely on instructor observations or management observations that show how training produced its desired output: learning.

2. Assuming you can document that the training has been successfully absorbed, the question to ask is whether the acquired skills and knowledge have been transferred to the work place--i.e., did the trainee use the new skills on the job? (The line manager is the one who must assure that the new skills are being applied.)

3. One interesting way to examine training results--increased productivity--is to look at the average revenue from an untrained sales representative versus a trained sales rep. If, over time, the trained people are producing 50 percent more in sales than untrained staff, you know something is happening.

The problem for most of us is that we do not have sales forces large enough to make such comparisons. But I guarantee you that, if you have a good training program, tracking your small sales staff through the use of call reports and one-on-one reviews by a manager with the salesperson on a weekly basis will reveal that the number of calls is increasing from week to week and the ratio of closes to calls improving.

4. Measure post-training "on-the-job" performance by conducting a post-training survey to get input from the trainee's perspective: Ask whether training improved performance on the job, or in a specific job function; whether the person learned that function or system in training or on the job; and whether the person could do it effectively before the training.

Another battery of questions goes like this: Because of attending this program--

* Do you feel better about your job with the company?

* Are you impatient to get ahead?

* Do you feel worse about your job and the company?

5. Rate the value of a training program not just by examining how much revenues have increased, but also by analyzing how savings and changes in costs have occurred. You can use historical accounting and other department records to document actual changes in performance that can be traced to participation in a training program.

The $ value of sales training

Through the training process you are able to retain key people over a longer period of time. This was certainly the case at Ziff-Davis, and it translated to a dollar value.

For example, it really is possible to say that if turnover is reduced by one $25,000 employee in each of four locations and four magazines, that is $100,000 in value. Costs of recruiting and training new people who replace those who quit or are fired are, at minimum, equal to the direct salaries of the people who leave.

Recruitment usually costs one-third of the first year's salary for the job involved. Training new people certainly costs about 10 percent of the first year's salary, and "learning curve" costs, which account for the fact that people take some time on the job before they become fully productive, amount to 50 percent of the first year's salary.

Another good way to look at the value of training is to see what it costs an organization to keep someone on the payroll. A good estimate of the full cost of a person's time is roughly three times his or her direct salary.

It was certainly very clear to us at Ziff, and it clear to all my clients who become committed to sales training, that the savings derived from preventing turnover are enormous. If you have enough people on you sales force to try the following test, you will get more concrete evidence of the value of training. Take two groups in your company--all of them experienced. An experienced salesperson can be taught a new way to manage his or her territory and to prospect for new, high potential accounts.