Dedicated HR professionals are committed to helping employees grow and develop professionally.  It’s an important role that’s necessary to make a company run efficiently.  Yet a recent post on CFO.com suggests that helping the company optimize its business results is not of especially strong interest in the HR profession.  According to 2013 State of Talent Manger Report more than 40% of respondents in HR saw their role as something they did not do to help their company maximize profit.   Great HR professionals understand that unless the organization runs effectively – and profitably – talent management budgets will shrink.  The goal must be that they are equally important, and that the right employee development plans improve the company’s overall performance with a solid ROI. The two “reasons” are symbiotic, and strategically aligned in top performing companies

 “I want to help people grow and develop” was the #1 answer for the primary reason respondents where in the HR field, but #2 was “I want to help my company maximize its profitability.”  How can you achieve both goals? Executive Conversation’s build It tool structures a business case which directly links the value of development with performance within your organization. Hit both targets by improving the sales development process within your company and achieving performance at the same time.

A client sales leader recently expressed frustration at the excuses she hears why her team doesn’t call higher: “takes too much time,” “executives don’t want to talk to us,” “we get referred down.”

She then shared her real suspicion:  They’re intimidated.  They’re not sure what message to deliver.  They lack confidence having the right conversation with the right person.

The necessity for engaging higher within accounts has never been greater.  Approval for even modest investments now often rests at executive levels, and deals are much more likely to stall - or worse - when you’re unable to confidently engage customer executives.

Preparations Breeds Confidence

Preparation is the best way to build confidence for any sales call. When selling to executives, remember, it’s all about them, their business and their business performance. 

Here are 3 ways for applying business acumen to help you feel as confident having business conversations with CXOs as any other decision-maker:

1.  Know the executive’s prioritized business initiatives.
Initiate executive conversations around the customer’s stated business initiatives.  This demonstrates you’ve taken the time to understand their business.  Your objective is to validate that the initiatives you’ve identified are priorities relevant to the target executive’s direct area of responsibility.

Asking executives to ‘tell you about their initiatives’ is the fastest way to end the conversation.  Executives aren’t interested in being interviewed.  Prepare using Management Presentations, Earning Calls and other available resources to expedite gaining customer insights. 

2.  Participate in quantifying the value of your solutions.
Too many salespeople mistakenly believe that computing a project’s projected ROI is something the customer alone must own. This type of hands-off  ‘let the customer compute ROI’ is a flawed approach.

You’ve sold your solutions many more times than the executive has bought it, leverage that experience.  Prepare by getting comfortable talking about the positive financial impact you can deliver. That’s what executives want to know.

3.  Role play your executive conversation
If you’re not comfortable with role playing, get over it. It’s the best way to simulate the scenarios that can derail any well-rehearsed executive conversation and foresee how to effectively respond when the dialogue digresses.

When you role play to prepare for executive engagements, you develop the ability to deviate from your plan, yet still have a successful business conversation.

Business acumen and financial acumen are essential skills for today’s sellers.  When you understand what success looks like from your customer’s perspective, deals flow that much easier.  

All of our sales training is delivered by our seasoned team of Consulting Executives, experienced executives with careers making investment decisions.  Contact us to learn more about how their shared insight into the mindset of the executive suite can give your team the confidence and credibility to speak business.

For additional guidance, view our webinar: Reaching Hard to Reach Executives.

Let us know what you think.

As a Learning and Development leader, you’re expected to assess projected return on sales training before you invest in program.  Are you struggling to build your case?

Let’s start with the basics:  A $1,200 training program costs 50% more than an $800 program, right?

You may be surprised how rarely this is the case.  Don’t worry we will explain why.

This post shares a model for measuring your return on sales training.  Organizations compute ROI many ways, however most analyses share the common formula:  ROI = Cumulative Returns ÷ Cost to Implement

The Value Equation

When recently presenting an Eye for Impact report, this is Executive Conversation’s training ROI measure that is provided to clients, it triggered an eye opening conversation relevant to anyone involved with training, sales, and L&D. 

Let’s paraphrase a client.  This client is responsible for the Learning and Development in a successful software company.  She organizes dozens of programs for multiple teams.  Their goal is to build longer term relationships with their customers and to close deals more quickly.  This person needs training for their direct sales team and has a strict budget to manage. In L&D you must be able to articulate and measure the Return on training before you can make the investment…

• The client agreed that training investments are undertaken to deliver financial impact. 
• The client was surprised to see that the results delivered by a training program are the single largest determinant of its ROI. 
• The client shared that their training decisions pivot primarily on cost per person without considering potential returns. 

This last bullet point really stands out on why you can make better choices in your L&D investments by properly measuring your return on training.  Let’s continue to use sales training as an example to illustrate how the returns generated from training play such a dominant role to measure ROI.  Return from sales training can occur five ways:

Cumulative Returns

1. Making a sale that would not have been realized without the training
2. Closing a sale more quickly, thereby decreasing cost of sales
3. Increasing the size of a sale, thereby increasing revenues
4. Increasing margin on a sale, thereby increasing profitability
5. Deciding a better business decision is to walk away from a sale

Of course, some of the foregoing are easily quantified (improving margins), while others are almost impossible (walking away from a sale).  Our L&D client from the software company can map out that training will indeed help her team to build longer term relationships and close sales more quickly with their customers, all while making better business decisions to increase revenue.

The key takeaways to remember are to:

• identify what returns are relevant to your learning initiative
• implement a means to track those returns before training begins

Cost to Implement

As you may suspect, measuring costs is more straightforward than returns. 

What may be surprising, however, is that the cost per participant not only makes up a minor part of the total training cost; it also represents an insignificant part of the total return on training equation.

This is best explained with a scenario:

People Cost Assumptions

• Annual cost of a sales professional:  $250,000
  (Fully loaded, includes compensation, benefits & support)
   
• Number of work days in a year:  225
  (Approximately $1,100 per day)
   
• Daily instructor cost (day rate + T&E):  $3,500
• Number of participants in workshop:  20

Applying these assumptions results in over $5,000 of costs per person before the actual cost per participant:

• 2-days spent in training           2,200
• 1 day of travel time                  1,100
• Est. travel and lodging             1,600
• Pro-rata instructor cost            350
  Total                             $5,250*

* It’s easy to identify the costs shown, should this number appear high, calculate reasonable numbers for your organization. 

The result?

• When the full cost of training is recognized, this example $1,200 workshop’s total cost is $6,450 (5,250+1,200), and the $800 workshop ends up costing $6,050 (5,250+800). 
• The real cost difference between these $1,200 and $800 workshops turns out to be 6.6%, not 50%.

Conclusions

• The returns generated from training greatly outweigh the cost per participant in capturing return on training.
• Learning and Development professionals, as well as Sales Leaders, should expect vendor value propositions that enable them to make training decisions incorporating anticipated returns.

To help you build the case for your next learning initiative, and align it with your leadership’s business priorities, take advantage of our complimentary online Build-it tool.

What’s been your experience measuring return on training?

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