1. McGraw-Hill/Irwin Copyright 2006 by The McGraw-Hill Companies, Inc.

2. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 10 Sales Training: Objectives, Techniques, and Evaluation

3. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-3 Learning Objectives Identify the key issues in sales training. Understand the objectives of sales training. Discuss the development of sales training programs. Understand the training of new sales recruits and experienced salespeople. Define the topics covered in a sales training program. Understand the various methods for conducting sales training. Discuss how to measure the costs and benefits of sales training.

4. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-4

5. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-5 Sales Training Issues Who should be trained? What should be the primary emphasis in the training program? How should the training process be structured? –on-the-job training and experience? –formal and more consistent centralized program? –web-based? –instructor-based?

6. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-6 Sales Training Objectives Increase productivity Improve morale Lower turnover Improve customer relations Improve selling skills

7. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-7 Obstacles to Introducing Training Top management not dedicated to sales training Lack of buy-in from frontline sales managers and salespeople Salespeople’s lack of understanding of what training is supposed to accomplish Salespeople’s lack of understanding regarding application of training to everyday tasks

8. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-8 Well-Designed Training Program Analyzes sales force needs Sets specific, realistic, and measurable training objectives Allows for adequate development and timely, effective implementation Subjects itself to evaluation and review –What do we want to measure? –When do we want to measure? –How do we do it? What measuring tools are available? Modifies to achieve greater effectiveness

9. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-9

10. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-10 Recent Shifts in Training New Sales Recruits Companies with less than $5 million in annual sales are spending more on sales training per new hire - $5,500 worth of training per salesperson. Training in smaller companies has increased from 3.3 months to 4.4 months. Smaller companies are placing more emphasis on training than several years ago. Companies are spending time and money on training experienced salespeople Companies with more than $5 million in annual sales, are spending less money on training Source: Christen P. Heide, Dartnell’s 30th Sales Force Compensation Survey: (Chicago: Dartnell Corp., 1999)

11. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-11

12. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-12 Recent Shifts in Training Experienced Sales Personnel Experienced sales reps are given, on average, 32.5 hours of ongoing training per year at a cost of $4,032 per rep Continuing increasing amounts of training reflects a commitment to provide ongoing learning opportunities for senior salespeople Companies are spending an increasing amount of time on product training and less on training in selling skills Source: Christen P. Heide, Dartnell’s 30th Sales Force Compensation Survey: (Chicago: Dartnell Corp., 1999)

13. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-13

14. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-14 Sales Training Topics Product or service knowledge Market/Industry orientation Company orientation Selling skills Time and territory management Legal and ethical issues Technology Specialized topics

15. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-15 Product Knowledge Enables a salesperson to provide prospects and customers with the critical information for rational decision-making Involves –Knowing how the product is made –How the product is commonly used, and –How it should not be used. Customers often want to know how competitive products compare on –price –construction –performance –compatibility with each other Companies that produce technical products spend a greater amount of time on product knowledge

16. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-16 Market/Industry Orientation Topics How a particular industry fits into the overall economy Knowledge of the industry and the economy Economic fluctuations that affect buying behavior and require adaptive selling techniques Customers' buying policies, patterns and preferences in light of competition Customers' customers and what satisfies them Needs of both wholesalers and retailers

17. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-17 Company Orientation Topics Company polices that affect their selling activities How to handle customer requests for price adjustments, product modifications, faster delivery and different credit terms Sales manuals that cover product line information and company polices A well-prepared sales manual gives a sales representative quick answers to a customer's questions

18. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-18 Time and Territory Management Sales trainees need to learn to manage time and territories 80/20 rule applies: –20% of the customers account for –80% of the business and –Require a direct proportion of time and attention

19. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-19 Legal/Ethical Issues Federal law dictates corporate action or avoidance of action in areas of marketing, sales and pricing Sales personnel need to understand the federal, state and local laws that constrain their selling activities Statements made by salespeople carry both legal and ethical implications Lapses in ethical conduct often lead to legal problems

20. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-20 Technology Notebook computers –Presentations –connecting to company intranet or extranet –delivering documentation quickly and accurately Home offices eliminate the need to go to another office Salesperson can be almost totally self-sufficient with –high-speed network connection –computer –printer –cell phone Effective computer use affords sales personnel more face-to-face customer contact time

21. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-21 Specialized Training Topics Overcoming price objections Holding the line on price Working the trade show Problem solving

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24. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-24 Keys for Effective OJT 1.Teaming - Bringing together people with different skills to address issues. 2.Meetings - Setting aside times when employees at different levels and positions can get together and share thoughts on various topics. 3.Customer interaction - Including customer feedback as part of the learning process. 4.Mentoring - Providing an informal mechanism for new salespeople to interact and learn from more experienced ones. 5.Peer-to-peer communication - Creating opportunities for salespeople to interact together for mutual learning. Source: The Education Development Center (www.edc.org)

25. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-25 Classroom Training Trainee receives standard briefings in –product knowledge –company polices –customer and market characteristics –selling skills Formal training sessions avoid wasting executive time Classroom sessions permit use of audiovisual materials and technical resources Interaction between sales trainees builds camaraderie

26. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-26 Measuring the Costs and Benefits Sales training consumes substantial time, budget and support resources Relationship between sales training and revenue is difficult to measure

27. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-27 Broad Benefits Improved morale Lower turnover Higher customer satisfaction Management’s commitment to quality and continuous improvement Measuring changes in skills, reactions and learning assists both new and experienced sales personnel

28. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-28

29. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-29

30. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-30 Key Terms sales training analysis on-the-job training (OJT) role-playing electronic training methods sales training costs

31. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 10-31 Mark W. Johnston Rollins College Greg W. Marshall Rollins College