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How to measure ROI of Sales Training and Development? (beside Sales Revenue)

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Nhat Nguyen's picture
1332425297
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  • Linh Nguyen's picture
    Linh Nguyen
    1335264608

    Sales revenue is one obvious and final result we can use to evaluate the effectiveness of the training. In Dale Carnegie, we measure ROI of sales training and development based on the KPI required from each step of our internally endorsed consulting process. Some can be listed as below FYR:
    - Effectiveness of time used on developing sales pipeline
    - % of existing clients versus new clients
    - % of increasing loyal clients (with clear defined standard of “loyal”)
    - Better ratio between calls/appointments/deals, result in time and cost saving
    - Numbers of referrals
    - …
    The above criteria will definitely help lead to sales revenue at the end, while sustaining the business

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  • Pascal Ho Ba Dam's picture

    I would like to clarify the question: are you looking for Return on Investment or are you looking at measuring the effectiveness of the training?
    1- ROI cannot be measured by sales revenue. It can only be calculated by profit made. Say you invest 1000$ on training (including 1 week the staff was absent for training) and the sales person get sales from 10,000$ (before training) to 19,000$ (after training) and the profit is 10%, your additional profit is 9,000$ (additional revenue)x10%=900$ to compare to 1,000$= revenue are up 9000$ but you make -100$ (-10%) ROI
    2- Is the training effective? This is an HR question and the only way to measure is to check the closing ratio -if the training was on sales and development-. This ratio should be increasing. Say before training your employee would sign 3 deals out of 10 new persons: closing ratio 30%. After the sales training, he can convince more people due to new technique, but also after the development training he can spot a good and a bad prospect, then your staff may find 10 "better" new persons and sign 6 new clients: his closing ratio is now 60%.

    NB. In period where prices are going down, revenue and profits also go down per client, so if your staff sign 20% more clients but the revenues/profit of the whole market go down by 30% (think real estate), just measuring -10% decrease in revenue will hide the fact that your staff signs +20% more clients.

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  • Pascal Ho Ba Dam's picture

    Tôi muốn làm rõ câu hỏi: Bạn đang đang muốn tính ROI hay là bạn muốn đo lường hiệu quả đào tạo?

    1 - ROI không thể được đo bằng doanh thu bán hàng. Nó chỉ có thể được tính bằng lợi nhuận mang lại. Giả sử bạn đầu tư 1000 $ đào tạo (bao gồm cả 1 tuần các nhân viên vắng mặt để đào tạo) và người bán hàng có được doanh số bán hàng tăng từ 10.000 $ (trước khi đào tạo) đến 19.000 $ (sau khi đào tạo) và lợi nhuận là 10%. Lợi nhuận bổ sung của bạn là 9000 (doanh thu bổ sung) x10% = 900 $. Nếu so sánh với doanh thu, có vẻ bạn đã tăng thêm 9000$ nhưng, thực ra bạn thu được -100 $ (-10%) ROI

    2 – Hiệu quả đào tạo như thế nào? Đây là một câu hỏi thuộc nhân sự và cách duy nhất để đo lường là việc kiểm tra tỷ lệ bán hàng thành công, nếu bạn đang đào tạo về bán hàng và phát triển kinh doanh. Nếu đào tạo có hiệu quả nghĩa là tỉ lệ này ngày càng tăng. Nói cách khác, trước khi đào tạo nhân viên của bạn sẽ ký 3 giao dịch trên 10 người mới: tỷ lệ thành công 30%. Sau khi đào tạo bán hàng, ông có thể thuyết phục nhiều người hơn do kỹ thuật mới, cũng có thể sau khi được đào tạo phát triển, ông có thể nhận ra khách hàng tiềm năng tốt và xấu, sau đó nhân viên của bạn có thể tìm thấy 10 người mới "tốt hơn" và dễ có được thành công với tỉ lệ là 60%.

    NB. Trong giai đoạn giá giảm, doanh thu và lợi nhuận đi xuống trên mỗi khách hàng, vì vậy nếu nhân viên của bạn ký được hợp đồng mới nhiều hơn 20% nhưng doanh thu / lợi nhuận của toàn thị trường đi xuống 30% (ví dụ bất động sản), nếu bạn chỉ đo -10 % giảm doanh thu sẽ giấu đi một thực tế rằng nhân viên của bạn tăng lượng khách hàng lên +20%.

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  • Nhat Nguyen's picture
    Nhat Nguyen
    1338086352

    Thank you for your answers. The question is quite clear that it is about ROI. Many companies sending staff attends training courses however they can not measure ROI of those training courses. I invest 100 usd in training how much return I get back after 1 year for example. Can you help me the formula so that I can persuade my boss to invest in training? Have a nice weekend.

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  • Hien Nguyen's picture
    Hien Nguyen
    1335343526

    many good ideas are mentioned, you should make a set of KPI which includes most of these ideas and more. Good luck!

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