If you’re thinking about spending money on sales training, I’d like to ask you to stop.
Now this might seem a little strange coming from someone who is in the sales effectiveness business. But one of the challenges for the industry I’m in is providing value to our customers that goes beyond the single sales training event. Consider this statistic. When sales people are trained in the traditional way in an instructor led workshop, within 30 days, 87% stop using what they learned. So, for every dollar spent, only $0.13 value is received by the customer! We call this the ‘Area of Missed Opportunity’. Click on the image above to see this represented graphically.[If this seems like a little self-promotional, then I apologize, but I couldn’t figure out any other way to share this with you without using our own experience.]
Now, at The TAS Group, we work with a lot of sales people all around the world, and this problem – of poor sustained value – has taken up a lot of my time, and that of others in the company since we took over the business in late 2006. Since then we’ve added one new TAS-maniac every 7 minutes, equating to hundreds of thousands of sales professionals. That’s a lot of potentially wasted dollars, but based on the analysis we’ve been doing, we think we have figured out how to provide sustained value, and I’d like to share this with you.
Sales leaders and sales professionals (not to imply that sales leaders are not professional) understand that there are best practices that apply to sales, and when these are followed, good things generally happen. From my perspective that is true irrespective whether the best practices are our methodologies or those from our competitors. If you apply a proven methodology from a reputable vendor, and apply it well and consistently, your revenue performance will increase. This is a fact well documented by independent third parties. The challenge, however, has been: how to make it stick, make it easy for the sales person to use, and the sales leader to manage. In our book that means understanding how people want to learn, how to answer the ‘what’s in it for me?’ question, and how to support the required activity with technology for sustained usage.
A recent study of 5,500 people, conducted by Ernst & Young, gives a good insight as to how people prefer to learn, and confirms for us what we have learned over the last few years. ‘On the job’ learning is by far the preferred learning mechanism, and as you move from Baby Boomer through Gen X and Gen Y, you can see in the chart here the antipathy towards classroom training increases.
Through our analysis, what we have found is that the optimum learning mix is 10/20/70; a combination of 10% formal instructor led training, 20% structured coaching, and 70% ‘on-the-job’ learning. In many ways there should not be any surprises here – this is the basis of performance based learning paradigms long espoused by some of the leading thinkers in this area.
If you’ve been following what we do at The TAS Group, you will know that we invest a lot in technology, to reduce the dependence on classroom based training by separating knowledge transfer from knowledge application. We don’t think that it is always appropriate or necessary to transfer knowledge in a classroom environment, and that by using appropriate sales 2.0 tools, sales people can learn new sales concepts virtually, at their own pace, and contextualized to their situation. The technology exists to support that.
Also, when intelligent sales 2.0 tools are used, the need for coaching can be automatically and intelligently discovered, and the tools are available to support the sales manager in uncovering where coaching is needed and in automating some of that coaching for her. That’s where we think 20% of learning should happen.
But it is in the 70% area that things have really fallen down in the past – and this is where we are really excited about the progress we have made and the success (i.e. more sales!) being experienced by those companies we’ve witnessed adopt the right approach. People like to learn as they do. It’s as simple as that. And when you make it easy for them to go about their job, while learning almost subconciously, truly great things happen! We’ve seen consistent usage and adoption rates at the 90%+ level, and that’s a long way from the industry average of 13%.
So here is the key message. Traditional sales training is expensive, not just in terms of fees paid to sales training providers, but also in terms of travel expenses and time, selling days out of the field, and perhaps most disappointingly on the sustained value received. In today’s straitened economy you need to be sure every dollar you spend delivers maximum return – and the most effective way to grow through this difficult time is to have a productive and optimally effective sales team. You cannot save your way to prosperity! If you are planning on investing in your sales team – and that is one the most important things you can do right now – dig for answers to the questions posed here -and consider for yourself how you will map the 10/20/70 optimum model to your sales effectiveness initiative.