“To train or not to train?” – that is the question
Many businesses spend thousands of dollars on marketing and advertising to generate inquiries and yet spend nothing on training their salespeople to convert these same inquiries into sales.
A common misconception is that if the salesperson has great product knowledge they can make the sale. These types of salespeople rely on what we term “show and tell” selling which leads to price focused buyers rather than needs based selling.
Many sales are lost as a result of poor or even non-existent sales processes. The analogy I often use is when baking a cake you follow a recipe and if you do you get the same result each time. When you decide to change the recipe and say use less baking powder you may still get something that is edible but not the best result.
Well it is the same with many salespeople who have never had any formal sales training – they may have a recipe/process they are following but some of the key ingredients may be missing, resulting in missed sales which invariably leads to increased cost of sales not to mention lost sales revenue.
When you consider the cost of making a sales call can be from $90 to $500 depending on type of call and then take into account the lost opportunity costs it often comes down to leaving sales to chance.
I meet many businesses who would gain immediate sales from sales systems but will delay sometimes up to 12 months before starting.
The great thing about sales training is that it is entirely measurable and the return on investment can be seen almost immediately.
The cost of missed sales can be huge even for small businesses. An example might be a business where an average client may spend $200 per month over 12 months – this adds up to $2400 p.a. If the average client stays loyal to this business for 5 years then the average lifetime value is $12,000.
Now if our untrained salesperson is fumbling one sale per week over 46 weeks this amounts to $552,000 in lost business and over 5 years this could come to $2,760,000 and remember this is per salesperson.
From Jim Koch of the Boston Beer Company, who once was asked by a wholesaler why he invested so much in training his people, when ultimately they might leave.
His reply was “what if I didn’t train them, and they stayed?”
Review your sales processes – do you have systems for:
• Asking for referrals
• Managing new leads
• Identifying potential prospects
• Making appointments using the telephone
• Conducting sales interviews
• Quantifying your prospect’s problem in dollar terms