Sales training programs encompass a variety of necessary components; things like company policies, sales paperwork, CRM/sales force automation orientation, sales processes, company services, sales skill training and product features and benefits.

But when I ask Sales executives and Sales trainers how their current sales training program is aligned with their sales performance issues I get the look of No speak English.

Lets first categorize Sales performance issues. There are (4) distinct sales performance silos that will effect the overall outcome of any sales team, year in and year out. They are:

% of Sales reps to Quota
Average New-hire Ramp-to-Quota in months
Sales Employee Turnover rate
Time spent versus Result achieved

This is a good place to start in determining what sales skill training to implement to achieve a measurable return on investment. But heres what will set you apart when you walk the request up to the front office. Start out with the NUMBERS. Thats right. Take a diagnostic view of your current sales performance silos, one by one.

Lets look at a real sales performance issue example of Average New-hire Ramp-to-Quota. I recently conducted a Sales Performance Improvement Blueprint web-cast for this sales organization. The company was hiring 155 sales reps per year. The ultimate objective of any new-hire sales training program is to ramp the new sales rep to Quota. Simply, give them everything they need to effectively reach their monthly sales goal.

So how was this company doing? They were obtaining this ultimate sales training program objective in 7 months. So how does one determine if that training outcome is a Sales Performance Issue? Lets take a look.

Step 1: Run the Numbers for any realistic ROI opportunity

Each new-hire rep had an ultimate quota of $3500
Sales Cycle was 17 days
Average customer term agreement of 36 months
Average 'Sub-Quota' revenue per month during ramp of $1300 (This number reflects the average monthly revenue a new-hire achieves before they achieve quota attainment)

Step 2: Run the Numbers hypothetically for a Specific improvement

In this case, I showed the sales management team what return on investment they would get by helping just 1 sales rep achieve full sales quota in 6 months versus 7 months. Based on their numbers my diagnostic X2 Evaluator system showed them a ROI of $79,200 just by trimming off 30 days. If they did that for all 155 of their annual new-hires, they could realize $12,276,000. And that got their attention. So, is it now a worthy sales performance issue to attach pin-point sales training to? Not quite yet.

Step 3: Run the Numbers for a Reality Check

The most successful businesses and certainly, sales departments have identified their Key Performance Indicators (KPI); individual gateways that directly effect the outcome of a particular process. Then they measure the competency ratios in line with them.

A good KPI example in the sales process might be how many times you advance the first sales appointment to the next phase, whether thats a demonstration, a site visit, a survey or a proposal. Another KPI is how many times you gain a new customer once the first gateway is passed. And when you do gain a new customer, whats the average revenue you achieve? And how long does it take to gain a new customer on average; i.e. sales cycle?

How about how long it takes you to gain 1 new sales appointment, defined by sales prospect conversation? And as a by-product of all this, how many new appointments are needed each week?

We ran these numbers in the X2 Evaluator system to see if and where there were some leaks in the KPI ship. And heres what we discovered; not a leak, but a big ole fire hose.

Two KPI issues were apparent. First, why does the ramp-to-quota for a new-hire take 7 months when the average sales cycle is 17 days? Second, they were only setting 3 new appointments per week when they needed to set 6, based on their other KPIs. So their sales appointment activity barometer was only running at 50%. And that will dictate a longer ramp-to-quota.

Dig a bit deeper in the X2 Evaluator system and out popped a 6% conversation-to-appointment ratio; they had to conduct 15 prospect conversations to get 1 new appointment.

OK, back to the Reality Check. Is it realistic to focus on reducing the new-hire ramp-to-quota from 7 months to 6 months for a sales training ROI of $12,276,000 or $79,200 per rep?

You bet it is. These folks needed to address the front-end of their sales process; setting targeted sales appointments. To do that, they needed (1) establish an activity standard to reach quota by month six and (2) develop a sales prospecting methodology and supporting X2 Evaluator system to spend less time in achieving it.

Then they needed to plug their sales prospecting system into their current sales training program and work to a weekly sales appointment activity goal to assure a monthly revenue result by month 6.

Step 4: Set the Goal and Train to It

A sales training ROI goal of $12,276,000 or $79,200 per rep is for sure a worthy one. And the diagnostic system showed us they would meet this goal just by setting 3 additional sales appointment per week per rep; 6 appointments versus 3.

Actually, I lied. The X2 Evaluator system showed an even brighter picture if the sales appointment activity standard of 6 new appointments per week was met. If they could support their new-hires with a sales prospecting system that could help them achieve 6 new sales appointments per week, they would actually cut their new-hire Ramp-to-Quota by 4 months; from the current 7 months down to 3 months.

And that sales training ROI would be $316,800 per rep or a whopping $49,104,000.

One of the reasons why sales training fails is a failure to define a useful objective. In this case, our diagnostic method has defined a single useful objective for them to train to. And this same diagnostic method can be utilized if you have a Sales Performance Issue of an unacceptable percentage of Sales reps reaching Quota each month.

In Part 2, we will take a look at (2) other sales performance issues, Sales Employee Turnover rate and Time spent versus Result achieved with this same sales management team and see what our diagnostic method to sales performance improvement and ROI turns up.

Jeff Hardesty

Jeff Hardesty is President of JDH Group, Inc. and Developer of the X2 Sales System?.

Jeff?s first career encompassed 14-years was as a professional Pilot, where he accumulated over 7500 incident free hours of logged flight time. As the industry evolved to hold more rated Pilots than there were seats available, Jeff decided to change directions to gain more career control.

That led him into the profession of sales. Starting from the Ground floor as an outside sales rep at Lanier, Jeff rose to the top 8% in World-wide ranking, competing with 4500 other reps. He was awarded consecutive President?s Club Trip?s and was one of ten qualified national Lanier reps to win the prestigious Silver Bullet Award for outstanding major account sales.

A move into the newly emerging competitive telecommunications industry enabled Jeff to take his successful processes and best practices into a Sales leadership role. As General Manger of Sales for CGB, Inc., a start-up competing directly against the traditional Local Exchange Carrier, Jeff?s sales models and support tools helped increased revenues 509% in 3 years.

As a Vice President of Sales for a series of ?Start-up? and ?Turn-a-round? initiatives, Jeff?s diagnostic and performance-driven approach to successful sales focused on the individual sales employee and teaching them how to effectively run their own business.

His sales performance model resulted in an average of 172% sales unit growth over the first year of implementation for 3 consecutive companies.

In 2004, after 2 years of development, Jeff rolled out the X2 Sales System?, a blended sales performance system focused on identifying key sales competencies and performance metrics while training to an effective conversion rate for ?Top-Down? business appointments.

Jeff has been featured in numerous National publications such as Business First, Dartnell?s SELL!NG , Chief Learning Officer and Training Magazine with reference to Blended Learning Systems and improving sales teams Key Performance Indicators.

He travels the country conducting live X2 Appointment setting ?Boot Camps? and Train-the-trainer sessions helping sales organizations get more reps to Quota in less time, shorten new-hire ?Ramp-to-Quota?, accelerate new product roll-outs and eliminate Turnover costs due to low sales activity.