Types of Sales Training Costs

How to Plan and Budget for Sales Training

According to a report from Bersin by Deloitte, year-over-year change in training spending has not only recovered since the downturn, it more than doubled between 2006 and 2013 (up 7% and 15%, respectively).

With that level of investment, the process of setting next year’s sales training budget presents an opportunity to revisit all of the different types of sales training costs that may affect your spend. Rather than simply tracking last year’s budget, take a strategic approach to the planning process.

In this video, Richardson Sales Performance CEO, John Elsey, discusses the true cost of sales training.

To learn more about the cost of sales training, download the complimentary brief,  The Economics of Sales Training

In the remainder of this article, we explore 10 important things to consider in the budgeting and planning of your sales training investment.

1. Corporate Goals

Start by thinking about the big picture: What is your business trying to accomplish? How has that changed in the last year? A SWOT analysis can help you start to narrow your focus on what you need to do differently.

Based on organisational goals, what sales training is necessary to support these objectives? Your training should help you build on strengths, capitalise on opportunities, and mitigate threats. For example, a common threat is ongoing changes to the buyer’s behaviour. New products and solutions require sales reps to understand not just features, but also how to position the product with buyers.

2. Individual Goals

Take your focus down from the organisational to the individual level. What do your sales leaders, sales managers, and sales reps need to do differently to achieve your objectives and goals? How significant of a change is that? The degree of change will dictate the intensity and direction of your developmental efforts.

Before you know what training to tackle, you need to know their capabilities. Assess your sales reps’ strengths and weaknesses against your selling needs, then look for training opportunities to build selling skills and bridge knowledge gaps.

3. Scope of Training

Consider all of the areas that you will address through training. It could be some aspect of customer dialogue skills, opportunity or account management, presentation skills, and negotiation skills to name a few. Typically, the broader the scope, the more you will need to budget.

Separate the foundational skills from the incremental skills. Develop a training programme that follows a curriculum model in which each skill builds on the last. Some may choose to implement and measure one programme before committing to several.

4. Number of Participants

Consider the number of people you’ll train, noting the level and breadth across the sales organisation. In addition to sales reps, consider training for sales managers and leaders to help drive the change. While training more people demands more costs, remember that improved selling skills need to be company-wide in order to generate measurable results.

Moreover, training individual groups and not others sends an uneven message about leadership’s commitment to training initiatives.

5. Assessment Costs

To get where you’re going, you need to know where you are. Assess your team’s current capabilities before, during, and after the training to ensure that it has had the desired effect. Including this critical component carries additional costs.

Leaders will need to implement digital tools to take baseline and follow-up measurements. These costs arise from licencing and implementation.

6. ROI Measurement

Just as you need to assess individuals, look for organisational benchmarks to monitor before and after the training. It could include the number of sales calls, meetings held, sales funnel status, length of sale, the size of the sale, win/loss, and others.

ROI measurement is different than assessment. ROI measurement seeks to understand how new selling behaviours are impacting revenue, while assessment measures how well those skills are understood.

7. Design Costs

Every training programme is different. Leaders have specific needs because they’re selling specific products. As the value proposition of these products becomes more nuanced, the selling skills behind them must address these details.

Design costs stem from the involved process of understanding the selling organisation’s needs. Interviews with leaders and the task of folding those needs into the training requires extensive work.

8. Travel Costs

Companies will need to consider how training will impact their T&E expense. In-person training facilitators require travel and lodging to conduct on-site training.

Leaders must consider travel costs in the context of the training. For example, some material demands role-playing exercises that cannot be simulated with digital learning tools. In such a scenario, travel costs are a necessary component of the training budget.

9. Facilitator Costs

The strength of a training programme stems from the strength of the facilitator. Leaders need facilitators that can connect with learners and encourage participation that gets them out of their chairs and into the material.

Extensive material lasting several days, as well as a large group of participants, will require more facilitators or more time from a single facilitator. When evaluating costs, consider the value that a facilitator brings.

10. Systems Costs

LMS systems, licencing, and implementation present significant costs. The value of these products is that they can be scaled to any size group and can be implemented fast.

Leaders will need to also factor costs associated with expanding the available content in the future, as needed.

Earning Buy-In For Your Sales Training Budget

Budgeting is about trade-offs. You likely have numerous strategies and goals, but you must prioritise them and address the most important ones. If you can’t do everything, what will have the greatest impact toward aligning your training strategy with your organisation’s goals?

Be prepared to outline why the approach and investment make sense given the potential benefit. “If we continue to do ABC, the results will be predictably like last year’s. But, if we do XYZ, the outcome will more closely align our selling activities to support the goals of the business.”

Be transparent and realistic so that your credibility isn’t questioned, and don’t overlook the need to “sell” the new sales training approach to the sales reps who will go through it, as well as your superiors who need to approve it.