Soapbox: Selling Innovation
September 10, 2008
When it comes to mold-breaking innovation, the sales training industry has held less than a leadership position. But that now is starting to change as programs take on more blended learning characteristics with a strong emphasis on coaching and just-in-time learning reinforcement.
By Dave Stein
Some 90 percent of all sales training programs result in only a 90- to 120-day increase in sales productivity, according to ESR research. Furthermore, this is a temporary productivity blip, the research shows, with fewer than 20 percent of companies demonstrating a sustainable productivity gain that lasts a year or more.
These statistics come as no surprise if you've looked at the results of recent research in the area of sales effectiveness. No matter how you look at the data, one thing is clear: Salespeople are not getting the job done. There are several contributing factors, but ineffective sales training is at or near the top of the list.
Statistics such as these suggest that when it comes to mold-breaking innovation, the sales training industry has held less than a leadership position. There are a variety of reasons for this:
First, it's necessary to understand a few important characteristics of the sales training industry. The industry is fragmented. AchieveGlobal is at approximately $100 million in annual revenues (even though it isn't a pure-play sales training company). Wilson comes in at roughly $60 million. When you study at the top 25, as we do, it doesn't take long before you're looking at firms with revenues in the single-digit millions of dollars. In fact, there are hundreds of one- and two-person shops out there. Many work only with other small companies, but some do business with one or more of the Fortune 500.
Why is this industry so fragmented? The main reason is that people with just a few years of sales experience and just one client can hang up a shingle—and they do. Although there has been innovation from some of the better one- and two-person training firms, it hasn't had a lot of impact on the industry simply because those firms deal with small numbers of companies. New approaches don't travel that far that quickly.
Innovation has been slow to come to some of the larger training companies, as well. There are two major reasons for that. First, some of the companies that have been around for many years are still being run by the founders, some of whom are reluctant to invest in content, educational design, technology support, and high-quality facilitators. The reason? Investments such as those impact their personal income, and as a result, innovation suffers.
Another reason for lack of innovation: Filling classroom seats is a highly profitable business for sales training companies. They make significantly more margin from training classes than consulting. In fact, many training companies only do classroom training and are not interested in pre-learning assessment, methodology, sales process development, customization, program design, technology enablement, coaching, and other post-program support that is vital to long-term, sustainable sales performance improvement. As a rule of thumb, a training day generates between 600 and 800 percent more margin than a consulting day. Once a vendor has developed a program that works and is driving significant revenue from it, there is little incentive to change it.
Special Requirements
Nevertheless, there are big changes ahead to the way salespeople are being trained. What has been driving this are the special requirements for salespeople as opposed to other employees within many companies.
• Most companies have heterogeneous sales teams with salespeople who are experienced and inexperienced, skilled and not so skilled, with right-brained tendencies (selling as an art) and their left-brained counterparts (selling as a science). Employing a one-size-fits-all approach to training results in little learning and considerable resentment on the part of a fairly large percentage of classroom attendees.
• Pulling salespeople out of the field is costly in terms of expense and potential lost opportunity.
• Many salespeople need just-in-time coaching and training reinforcement out in the field, for example, right before they make a critical sales call or must effectively position their product or service against a competitor's in a customer presentation.
Companies that only offer event-based, out-of-the-box training rarely deliver the kind of long-term sustainable results that those that take the holistic, more strategic approach do. Julie Thomas, CEO of ValueSelling Associates, points out that public sales training seminars only reinforce the training-as-an-event mentality, not a process mentality.
Innovation After All
Although the forces mentioned above have limited innovation, some sales training companies have made significant strides. Here are a few examples:
• The people at Think, Inc! are proving that what formerly was considered a stand-alone skill such as negotiation should be integrated with the client's selling methodology. They work alongside some full-service sales training vendors to deliver an integrated training offering.
• Revenue Storm's coaching program for participants is co-facilitated by both a senior consultant from Revenue Storm alongside their own manager who is armed with a personal development coaching strategy for each of his or her reports. Their manager's individualized coaching strategy is built on the results of a fully validated psychometric test. Each participant also is certified after board review.
• Several firms, such as Sandler, Miller Heiman, and The TAS Group, produce a series of downloadable lessons, supporting learning and extending the post-training program performance bump to quarters and years, rather than weeks and months.
• Sales training companies such as Richardson are employing a Web 2.0 community approach to support post-program discussion and collaboration around critical performance issues for salespeople.
• Sales effectiveness improvement leaders such as Performance Methods, Inc., perform extensive discovery to solicit best practices within their organizations. These are incorporated into methodology redesign, the sales training curriculum, and post-program coaching and reinforcement.
The requirements of the job of selling require persuasion and relationship building. As such, look for traditional classroom sales training to take on more blended learning characteristics with a strong emphasis on coaching and just-in-time learning reinforcement.
Dave Stein is CEO and founder of West Tisbury, MA-based ES Research Group, Inc. For more information, visit www.ESResearch.com.
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