Posted by Mike Carroll ● Thu, Aug 26, 2010 @ 12:08 PM

How Much Should We Budget for Sales Training?

If you’re on a calendar year your VP of Sales is probably in the initial research phase of preparing their budget for next year.  How much will they put in for sales training?  How much should they?  What kind of training should you invest in?  Is there anything you can do to make sure you maximize the impact of your training investment?

1.  How much should we budget for sales training?

A good rule of thumb for a high-performing sales organization is to invest somewhere between 3-6% of your sales payroll on additional sales training and development.  So for a 10-person sales team where each sales person is making $100k, that would be $3,000-$6,000 per person, or $30-$60k for the department.  If your sales team is already operating at a high level, you may be able to scale that back.  If you have neglected investing in sales training and development, you may need to increase this budget until your sales team consistently performs at a high level.

2.  What kind of training should we invest in?

When you stop and actually look at how companies spend their training dollars (as we do in our sales force development consulting practice) a few trends emerge immediately. 

  • It seems most companies still use a “Feature/Benefit” sales model because what is often categorized as sales training is really just product training (if we drill in all those features, something will stick).  Very little if any money is invested on developing sales people and giving them the skills to ask better questions and have intelligent conversations.  Even less attention is given to sales managers who need to develop the tools and skills they need to become better coaches. 
  • There is often a bias toward “quick fix” seminars and one-day training sessions.  High-impact one-day training doesn’t work! It's like trying to take a sip of water from a fire hose, most of it runs off and dries up in a short time – and you get water up your nose!

The most effective training programs are delivered in a “blended learning” environment that combines live workshops that emphasize role play along with individual study that allows each sales person to focus on their particular weaknesses.  No matter how the training is delivered, reinforcement and follow up coaching by the sales manager is critical.  This type of reinforcement training provides opportunity for clarity and real world application. And that is when true change happens.

3.  Is there anything we can do to make sure we maximize the impact of our training investment?

The best investment you can make is to evaluate your sales team.  A good evaluation should provide insights into the “unanswerable questions” you’ve had about your sales organization:

  • Who on the team is trainable?
  • Do we have the right people in the right roles?
  • How much training will they need and is it worth it?
  • What impact will training have on improving my sales pipeline? How about our closing percentages?  What about increasing margins?
  • What type of return-on-training-investment should I expect for my current sales team?
  • Are my sales managers doing everything they can to grow the business?
  • What should my sales managers start doing?  What should they stop doing?
  • Who on my sales team can we save and will it be worth it?

Investing in a sales training program without being able to answer these questions would be like publishing your financials without getting an outside audit.  Ask these questions when your Sales VP turns in their first draft budget you’ll have a very productive conversation.

Topics: Listening Skills, Sales Training, sales force development

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