Training
Topic 21
I. Why Train Salespeople?
II. Assessing Training Needs
III. How Much To Spend on Training?
IV. Developing Training Programs
V. Evaluating The Cost-Effectiveness of Sales Training
VI. Salesperson Development
I. Why Train Salespeople?
Sales executives and purchasing agents agree that inadequate training of salespeople is a very common problem. Qualities such as product knowledge, thoroughness and follow-up, market knowledge, knowledge of buyer's qualities and preparation for sales calls all can be improved through training.
Sales person success is a mix of innate abilities and training. Innate abilities put an upper cap on a particular skill. Training can help individuals improve up to the limits of their innate ability. Selling characteristics that can be developed such as selling skills, motivation and role perceptions are more closely related to sales performance than enduring traits like appearance, aptitude and personality.
Firms that forgo significant and ongoing training have higher hiring costs (they must hire successful, experienced salespeople from competitors) or suffer from greater turnover and lower sales from less skilled sales forces. The degree, frequency and type of sales training needed is a policy decision that must integrate with other sales and marketing policy decisions.
Usually all salespeople do not need the same kind of training. Formal training programs for new hires differ from continuing education. Even training for new hires differs if hires have prior selling experience or selling experience within the industry. Ongoing training is needed for experienced salespeople because the competition, products, customers, business environment and marketing programs change over time.
Training program effectiveness should be evaluated to determine if the costs (both time and money) are worth the benefits. Average training costs for a new hire in business sales is $100,000.
Benefits accruing from sales training include:
A. Increasing Profits - Training can make salespeople more effective increasing sales and lowering costs. Profits are the ultimate goal of any training program. But many do not directly assess the impact sales training has on profits.
B. Reduced Turnover - Turnover is highest among people new to sales. People going into the field without adequate training typically find it difficult to see buyers, answer questions, or book orders.
This can cause frustration and failure.
Turnover is not always a bad thing. Low productivity people should be removed and more profitable people found. However, recruiting and initial training are very expensive as is leaving territories open or poorly served. Good initial training can cut recruiting, open territory and poor service costs.
C. Improved Customer Relations - Dealing with untrained salespeople wastes customer's time and makes a poor impression for your firm. Customers prefer to work with trained salespeople with a thorough knowledge of the industry, their firm's business, and their own product line. These salespeople become problem solvers and can help your customers make money.
D. Better Morale - Because sales training helps increase product knowledge and improves selling skills, it builds income, motivation and self-confidence among the sales force. Salespeople are better able to withstand disappointments and meet the challenges of a sales career. Trained salespeople start producing orders faster and increased earnings boost morale.

E. Control - Training improves the firm's control over salespeople's treatment of customers. This is especially important when experienced salespeople are hired or when the firm changes its marketing strategy.
II. Assessing Training Needs
To build a profitable training program, you first need to determine the goals of the training program. Examples include time management, territory management, order size, targeted customer segments, after-sales servicing opportunities, prospecting, consultive selling and selling adaptability.
A training needs analysis includes a review of the firm's strategic objectives with management observation and questioning of salespeople and a review of company records. This analysis is used to identify shortcomings in sales person skills and the identification of training programs to improve these skills.
A. Management Objectives - The marketing strategy frequently stresses certain products, customers or customer relationships. Strategy changes often mean retraining salespeople. Training may be needed as a result of changes in strategy, market environment and competitive environment. New product introductions or major changes to selling strategy mandate retraining. Systematic reaction to major competitor changes is also a key retraining need.
B. Sales Force Observation and Survey - Observation of salespeople is an excellent way to identify areas needing improvement. It is frequently helpful to examine successful and unsuccessful sales calls or successful and unsuccessful salespeople. Often, the sales force is surveyed to identify areas they want additional training in.
C. Customer Information - Sending customers anonymous questionnaires can also be very helpful. Questions such as "What do you expect from a salesperson in this industry?" "How do salespeople disappoint you?" "Which company in this industry does the best job?" "In what ways are its salespeople better." Focus groups are also frequently used.
D. Company Records - Firms with good computer records make this a gold mine, especially if call reports are utilized. Useful information includes sales, number of customers, new customers, lost customers, order size, number of calls per day and turnover. Trends in this data are quite useful (explain).
Reviewing records can also identify which salespeople need different types of training. Getting good records is not cost free, the loss of face-to-face selling time can be critical.
E. Need Clear Objectives & Budget - Put goals in writing. Have clear objectives. Have measurable standards.
III. How Much To Spend on Training?
As always, you should spend to the point where the marginal revenue gained from training equals the marginal cost. Regretfully, cost is easy to assess and incremental revenue has many fathers. Most firms spend far more per person training new salespeople than retraining veteran salespeople.
A.
Training New Salespeople is both costly and time consuming. Big firms will often spend 5 months to a year training new field sales people. Part of this time is spent in the field, but a significant portion is spent in the classroom or shadowing experienced salespeople.
B. Retraining Veteran Salespeople - products, competition, marketing strategy all change.
Territories shift, new customers are identified and other changes are always taking place.

A common time to retrain veteran salespeople is during regular sales meetings. A large proportion of sales meetings is spent on training. Many firms do not have regular retraining programs except to inform salespeople of changing product lines, marketing strategy, or company policy. This may be short sighted. Salespeople often benefit from refresher courses on time management, prospecting, closing sales, territory management and other topics.
IV. Developing Training Programs
After determining training needs and who should attend training a number of decisions still need to be made. These include: 1) what specific topics should be covered, 2) where the training should take place, 3) who should do the training, 4) what training methods should be used.
A. What Topics To Cover - Common topics are product knowledge, selling techniques, marketindustry orientation, company policy and history and other topics.
Product Knowledge - More time is spent on product knowledge (40%) than all other topics. To sell, salespeople need to understand the products, how it is used (or should not be used), technical specifications, and how well the products stacks up against the competition. This training is really mandatory when new products are introduced. To sell effectively, product knowledge is essential.
Selling Techniques - 30% of selling time on average. This training is especially critical for new recruits. Topics include effective listening, closing and gaining commitment and how to cold call.
Improving teamwork is very important for many firms.
Market-Industry Orientation - Background on the market for the firm's goods and services. This information helps salespeople identify prospects that need the firm's products. Recruits are given facts about the size and location of present customers, their buying patterns, needs and technical processes.
Salespeople who understand their customers are better able to present how the firm's products can meet their needs and help them make money. Salespeople also need to know about changing practices in the industry (both customer and competitors).
Company Orientation - Salespeople represent the company to the business world. For this reason, salespeople need to understand the companies history, organization and policies. They also need to understand both long-run objectives as well as current operating procedures. Training on firm policy concerning returns and warranties, credit arrangement, production methods, sequencing of orders, price guarantees, discounts and latitude on pricing are critical.
Other Topics - Firms will sometimes give training on computer skills, legal developments and other issues. Training for sales force automation (SFA) changes is also common.
B. Where to Train - Most large firms use both the central office and the sales office for training.
Both centralized and decentralized training have their strengths and weaknesses.
Centralized Training - Advantages include the ability to use specialized instructors, materials and equipment. Exposure to top management and specialists can is easier and can boost morale. Centralized training provides more consistency in training and more professional instruction. The type of training available is far broader in a centralized location. The disadvantages include increased travel, time and equipment costs.
Decentralized Training - Training is closer to customers and directly involves field sales managers. It is more likely to have a lasting impact because of close management observation and coaching. Useful ideas are discussed in the context of local selling conditions, making them more valuable to the salesperson. Recruits get to observe top salespeople selling to the customers the recruit will be dealing with. Travel and instructional expenses will also be reduced.
Problems include the lack of consistency in the content and quality of training. Managers may not spend the time needed to train recruits because they are busy supervising the existing salesforce.
Sales managers paid by getting a percentage of their salespeople's commissions may be more concerned about current income than training recruits. Some of these disadvantages may be overcome by the use of training videos or computer simulations out of the home office.

C. Who Should Train - there are three types of trainers that are commonly used: regular line executives, staff personnel and outside specialists. Some firms use two or even all three.
Staff Specialists - are most commonly used when centralized sales training is employed. If decentralized, staff specialists usually prepare program materials and (or videos) and the actual instruction is carried out by line managers. Staff trainers usually have skills in both selling and instruction.
Line Trainers - line executives have great credibility because they usually have successful sales backgrounds. They know how to sell and the skills necessary to sell well. The ideas line executives have are more likely to be put into practice by salespeople.
Despite their selling skills, they may lack teaching skills, especially in a classroom setting. Also, line executives have many other responsibilities and may not have the time necessary to do a good job with training.
Outside Specialists - are outside consultants. They can be entirely responsible for training, or only train in certain areas. They are especially useful for smaller firms unable to afford a full-time trainer.
They can be used for special assignments such as correcting training/skills problems in particular markets or with particular products. They can bring variety and inspiration to training problems.
Shortcomings of outside specialists is their lack of familiarity with the firm's products, strategy and competitive situation. This may make their presentations far less useful.
D. Training Methods - On the job, in house classroom training, external seminars and computer/video methods are the most commonly used.
On-the Job Training - most common for new recruits, especially for smaller firms. Every time a salesperson calls on a customer, they learn. The problem is, this learning can be too slow and lose too many sales. Commonly used techniques to improve on the job training include paring a new salesperson with a successful veteran. The immediate supervisor may travel with the new recruit and observe sales calls (coaching).
Drawbacks to OJT are the unevenness of training. Some supervisors and veteran salespeople are better trainers than others. New salespeople must also learn how to establish and grow accounts and not just maintain existing accounts.
In-House Classroom Training - is most commonly used by larger firms. Commonly used when training rookies. Economies of scale can be realized if large numbers need training. Classroom training often includes videos and role-playing. Classroom training can require expensive equipment and high travel costs.
External Seminars - are developed by noncompany groups for profit or as industry aids. They are often run by trade associations.
Other Methods – internet and video are commonly being used to achieve the advantages of centralized training without the travel and time expense. Remote learning of all types (audio tapes or
CDs, podcasts, youtube, web based instruction) is becoming increasingly common. Many training tasks can be accomplished through remote learning. Startup costs are often very high and training method is not equally good for all things. This is an example of a large fixed cost expenditure vs. smaller but frequent face-to-face training costs.
Beware of putting training materials where competitors can access them.
V. Evaluating The Cost-Effectiveness of Sales Training
Training costs can be substantial and are easily measured (including time costs and the opportunity cost of lost sales calls). Tying together sales training and sales performance is important.
All training programs should contain a written critique by participants for content, methods and trainers at the end of the program. Knowledge testing and field evaluations of behavior can also be done, but are more costly. Field sales performance, especially short-run (3 to 9 months) is also valuable.

Nothing works better in convincing salespeople and management of the effectiveness of training programs than performance measures.
Intermediate measures of sales such as number of sales calls, average revenue per sales call, cost per call, average length of the sales cycle and the call to close ratio are also used.
Profit or sales increases are less used measures. The reason is that other factors can always account for revenue increases. Success has many fathers, defeat is an orphan.
A big mistake is to failing to follow up on training. No one can be trained once a year at the annual sales meeting and expect maximum effectiveness. Training efforts are most successful when groups are kept small and scheduled at regular intervals during the year.
Training must also be reinforced by field sales managers. Managers should also go through training and be "trained to train." This way salespeople know everyone is speaking the same language and are directed towards the same goals.
In sum, always directly assess the impact of training. It is the only way you will discover over time what worked and what did not work.
VI. Salesperson Development
Salesperson development is helping people develop goals, skills and habits beyond those necessary for the present job (aka "career planning"). This often involves retraining salespeople to expand their responsibilities.
People are stimulated by new challenges and the chance to have an important impact on the performance of the organization. Research has indicated that salespeople who have no new responsibilities beyond their present territory are less motivated and less committed to the organization than salespeople who have these prospects. The traditional way to accomplish this was to train for promotion opportunities. This has become much more difficult with flatter organizations. Some suggested ways to accomplish this include:
1] Inform salespeople about their prospects for promotion. Do not set unrealistic expectations.
Also, peoples desires change over time.
2] Give people opportunities to develop new skills within the context of their present job.
3] Be creative in letting veteran salespeople know that they are successful and important to the company even if they are not in management. Recognize achievement both with social and economic rewards.
4] Be alert for salespeople with the skills and desire to manage or have advanced sales positions.
Be sure to check over time.
5] Design a program for developing salespeople for their next position. Reward managers who identify people who can be successfully promoted. Without this, sales managers tend to hang on to their best performers without developing them for the next position.