Sales Training Case Study
Does Sales Training Really Pay Off?
A firm we’ll call Company A (you would recognize its real name) is a privately held, $1.6 billion distributor with 3,500 locations in the United States and Canada. It has 18,500 employees, of whom more than 1,200 are outside salespeople or sales managers. Company A has been in business for 45 years and has increased sales and profits every year of its existence.
Historically, most of A’s growth came through acquisitions. In recent years internal growth has been very modest-about 1.4% annually, which is directly in line with industry norms in its mature market. Competitors sell the same products A does, and A found it very difficult to differentiate itself from the pack-to give customers a compelling reason to buy from A rather than from the competition. In other words, Company A was very typical of large distributors in any industry.
In 2005, Company A set a new course and established new goals. It vowed to increase its growth rate internally or “organically” rather than through more acquisitions; that is to say, the company decided that the best way to grow was to improve sales productivity. The goal established was to double the current growth rate-to achieve a rate twice as high as the industry standard.
Company A could not meet that goal by adding new product lines, since the same products were available to its competitors. The only way to do it was not to sell different things but to sell differently, period. Company A chose to train and certify its salespeople in the Action Selling Sales Training Program. But instead of just saying, “Here’s a new training program,” the firm approached the initiative strategically. Company A identified the Business Objectives it wanted to achieve, the Skills Objectives that would be required to meet those goals, and the Learning Objectives that would ensure the skills were not just learned but also used on the job.
The Action Selling training paid for itself, in the form of increased net profit, in 26 days. Within 90 days of the initial workshop, Company A saw a 346% return on its investment, again in the form of increased net profit. That’s $3.46 for every dollar spent on the program. Conservative projections showed that at the one-year mark, the ROI would be a staggering 1,383%–a return of 14:1! Who wouldn’t jump on an investment opportunity like that, especially knowing that the returns will continue to compound in years to come?
Those results sound astonishing, but they actually are not unusual for companies that adopt the Action Selling system. The remarkable thing is that Company A took the trouble to measure the program’s impact on its bottom line-and to do so in a way that left no doubt that revenue and profit increases came solely from the sales training. Factors such as new advertising campaigns, seasonal variations, or upswings in the general market had nothing to do with it. Company A knows exactly what it got in return for its training investment.
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This article explains how the firm knows exactly what it got in return for its training investment. More importantly, it explains why a sales training program was able to produce such a spectacular payoff on an asset that was right in front of Company A’s nose and is probably right in front of yours: the untapped potential of your sales force.
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