Give me data, or give me death…
A fitting end to training’s “event” paradigm!

by Don Brown

In 1987 Larry Wilson wrote in Changing the Game that “our economy, and therefore our customers, are going through change like we’ve never seen before”¹ and that the “game” of selling needed to change to accommodate shifts in decision making…sales cycles…random events…custom solutions and…the demise of the product solution”.  Over twenty years later, the world of selling is even more “complicated, competitive and complex”¹ to use Mr. Wilson’s words.

Two years ago, now well into the information age, the Harvard Business Review reported that with an “acceleration of trends established over several years, across industries, the selling context is evolving…buyers are behaving differently, and the work required of the sales force…is becoming more difficult”².   Their research indicates that the challenges of increased product-line breadth and complexity, and market participation has led to an average sales person ramp-up period of more than seven months.  Couple this with the fact that we are now living through what some would say is the most pervasive economic decline in living memory and it is obvious that the “game” is changing again!

So, what’s an organization to do? How should it respond?  Consensus seems to be that success hinges on the competencies of the sales professional, but studies show that as little as only one fourth of all salespeople are found to be proficient in core selling skills.  The response to this overwhelmingly has been sales training and coaching, and sales organizations have backed up their efforts with heavy resources – anywhere from four billion to seven billion dollars per year are now dedicated to sales training alone.

The Horns of the Dilemma
While training and development has achieved hard-fought acceptance as a logical, viable solution to many of the challenges faced by sales organizations, not all data supports a favorable conclusion around the utility of sales training – and the kicker is; there is not that much data available to connect training to end-result variables. An article from the Journal of Applied Psychology reviewed forty years of the published training and development literature, from 1960 to 2000. Encompassing journals, books, papers, presentations, dissertations, and theses – the authors reviewed only material related to “the evaluation of an organizational training program or those that measured some aspect of the effectiveness of organizational training”³. In this meta-analysis they found that within those four decades; “78% of all organizations surveyed used only reaction measures, compared with 32%, 19% and 7% for learning, behavioral and results”³. Over a period of 40 years only seven percent of evaluations conducted in relation to training and development had the courage to measure against end-result data! Add to this the following from Glen Coulthard⁴ “a thorough search of the human resources management literature for the time period 1987 to 1997 uncovered a total of only 16 case studies of companies for which the ROI from employee training programs was measured”⁴, and according to Frances Lilly, “a thorough ROI analysis is typically conducted for only 10-20% of all training programs”⁴. We just usually don’t know for certain what our training dollars are bringing back to the enterprise.

One Courageous Company
After 30-plus years in the training and development field, I happen to believe that sales training does in fact equip today’s sales force to compete more effectively, but my hunch has always been that sales training alone is not the answer. All too often our clients decry the “flavor of the month” nature of their organizations’ development initiatives, yet they tell us they don’t want just another training “event” – and then they ask what we can do for their practitioners in “a day or less”. This, however, was not the case a couple of years ago with one client that was eager to find out just how much of a difference we could make. We negotiated the possibilities as part of a Masters Thesis research, and what follows is a look at what we did and what our results were. I believe what you’ll find is that there is now a data imperative when it comes to training and development – pick the needles you want to move first.  I believe you’ll also find that we can connect these efforts to business results - sometimes astonishing results - if we put to rest the traditional paradigm of training as simply an “event” that takes place and is then checked off a list.

Research Purpose, Setting and Subjects
The foundational purpose of the study was to investigate any hard link between the use of sales training and follow-on behavioral coaching, and the bottom line end-result variables of revenue, gross profit and “line count” (the average number of line items per invoice – a significant cost measure). The specific sales training and behavioral coaching technology used in this research were Situational Selling^®, developed by Dr. Paul Hersey, and the behavioral coaching process of Dr. Marshall Goldsmith

The research took place within the setting of a leading North American distributor of industrial products and services. Their industry consists of the provision of the variety of supplies necessary to the operation of a manufacturing entity of any kind. Bearings, belts, fasteners and fluids are just a few of the tens of thousands of parts represented by a distributor. They usually provide these products along with the offering of engineering, design and systems integration services. Customers of the organization run the gamut from smaller job shops and walk-in customers, to the largest national accounts, from automotive manufacturing to food processing and durable goods.

Organizations in the business go to market in one of three ways; an outbound sales organization, an inside sales function consisting of Customer Sales and Service Representatives (CSSRs), and electronically via the worldwide web.  It is this second group, CSSRs as inside salespeople, that made up the subject pool for this study. Inside sales in general display well documented norms that help illustrate this sales environment:

• An average sales cycle of less than 90 days
• An average sale where 85% of deals fall at less than $25,000, with 50% closing at less than $5,000.
• 20% of deals closing with one or two calls, and 80% closing successfully with less than ten calls.

Participants in this research were drawn from two sales regions, one from the eastern U.S. and one from the west. One hundred seventy six CSSRs were involved, and organized into four groups. Group One was a control group that did not take part in any related activity.  Group Two consisted of CSSRs that participated in a one-day Situational Selling^® training program.  Members of Group Two were asked to attend the training by their managers.  Group Three consisted of members of Group Two (the Situational Selling^® participants) that volunteered after the training to take part in follow-on behavioral coaching with the instructor.  Group Four consisted of members of Group Three that continued in the behavioral coaching for four or more sessions.

1. Group one was a control group of sales reps that received no intervention (Control)
   
   
2. Group two received Situational Selling^® training. (Trained)
   
   
3. Group three received Situational Selling^® training, and volunteered for behavior coaching. (Volunteered)
   
   
4. Group four received Situational Selling^® training, and engaged in four or more follow-up coaching sessions. (Coached)
   

Participant Groupings

The same instructor facilitated all sales training sessions, and at the close of the workshop overviewed the follow-on behavioral coaching. This coaching was made available to all workshop participants on a voluntary basis. The same instructor also provided the follow-on coaching. Workshop participants were contacted via email to ask if they would like to participate in the follow-on behavioral coaching. Some Group 3 members’ involvement in the behavioral coaching process lasted only three to six weeks.  Those that persevered and made it into Group 4 saw their involvement lasting anywhere from two months to eight months.

Data Collection
The marketing department of the study’s subject organization regularly, historically and specifically keeps individual performance data on all of its over 4,000 Customer Sales and Service Representatives.  This data is kept in connection with employee numbers and is used for tracking, projecting, assessing, planning and implementing sales and marketing efforts across the organization. Data categories considered integral to the management of CSSRs (by their managers) are; Average Line Items per Invoice, Average Line Item Value, Average Gross Profit, and Average Revenue. These are their metrics – no attempt was made to contrive data. By knowing how much a CSSR sells, at what gross profit, spread over how many line items per invoice and at what dollar value per line item, the CSSR’s manager can best interpret and evaluate the CSSR’s output or “production”.

Data Analysis
For each of 176 CSSRs we had 12 months of data. Our objective in data analysis was to determine if the training and behavioral coaching that took place in the middle of the twelve-month period had any impact on their output. The primary focus of the data analysis and subsequent interpretation was to look at the data from each group for the six months prior to the training and coaching and compare them to the six months after the training and coaching to determine any growth or slippage attributable to our collective efforts.

The first analytic posed was; did individuals within each group sell more or less after the training and coaching, on average, than they did before the training and coaching? Any change (up or down) was then compared, Groups 2, 3 and 4 - each against the Group 1 Control - to find out if those that were involved at each level of intervention sold significantly more or less than the control group. This same process was undertaken with data reflecting the Gross Profit, Line Count and Line Item Value, to ensure that any associated revenue gains were not achieved at the expense of the profit.

A final note should be considered in reference to the analysis of data for this research, and that lies in the difference between statistical significance and substantive significance and association. For this study both statistical and substantive significance were considered, pointedly asking “were the results those that any involved manager or executive would find not only substantively significant, but perhaps even exemplary in business terms – separate and apart from statistical correlation?”

Findings and Observations
After undertaking a comparative (or simply, face value) analysis
of the results of this research we found:

Comparative Analysis

As shown, the Control group experienced a revenue drop of 3.7% when comparing their sales “post” versus “pre”. These CSSRs, within not only the same organization but out of the same Service Centers, had no contact with our training or coaching and ended up selling 3.7% less in the six month period after their peers participated than in the six months leading up to the events. At the same time, the CSSRs that only participated in one day of Situational Selling^® training (no follow-up) saw their sales rise 1.1% when comparing “after” to “before”.

For Group 3, individuals that participated in Situational Selling^® training – and then just volunteered for the follow-up coaching, but didn’t stay with the process – a revenue jump of 10.2% was recorded in comparing the “post” to “pre” timeframes.

Within the final group, Group 4, individuals took part in the Situational Selling^® training, volunteered for the follow-up coaching, and engaged in at least four (and in fact, an average of eight) 30-minute coaching conversations – and achieved a 19.8% leap in average revenue when comparing the 180 days after the training and coaching interventions to the 180 days prior to the process.

The impact of this substantive significance can best be understood by including the actual dollars and cents involved.  The CSSRs that participated in our research within groups 2, 3 and 4 achieved total revenues of $4,734,242 for the twelve months for which we received data. Given this throughput, if we contrast a revenue drop of 3.7% ($175,166.95) with a revenue gain of even Group 2’s more modest growth of 1.1% ($52,076.66) a case can be made for a six-month delta of some $227,243.61 in additional revenues for the enterprise.

I would add that Gross Profit and Line Count data were reviewed to ensure that revenue gains were not achieved at the expense of profit (e.g. lowering prices to spur sales). At each higher level of participation in the training and follow-up, Gross Profit went up – from 19.95% for the Group 1 control, all the way to 29.27% for Group 4 members.  Not only did CSSRs that participated in the training and follow-up sell more (in a direct ratio to their amount of involvement), but they did so at higher and higher levels of Gross Profit – they made more money (up to 10 cents on the dollar more) off of each dollar they brought in!

A final note in terms of both statistical and substantive analysis of the research data – statistical significance was found (through the Dunnet-C Post Hoc testing) involving the Group 4 Coached individuals in comparison to the Control. Added to this directional data is the substantive analysis that shows an actual net return of $1,180.00 per-participant at the lowest level of results, all the way up to $4,120.00 per-participant for Group 4 members – significant in anyone’s eyes.

What do I conclude?

• There is a demonstrable connection between sales training and bottom-line business results – sales training can grow revenue
• It is possible to measure the impact of sales training dollars being spent – and usually through existing organizational metrics
• We can maximize the impact of training dollars – through behavioral coaching. “Coaching is not training. However, coaching is the missing element in most training that makes it effective”⁷.
• We can change the paradigm of training as an event – and we have good reason to do so
• As Peter Drucker put so eloquently in The Daily Drucker, “…it is not whether the answer is right…but whether it works”⁸. Training in concert with behavioral coaching isn’t necessarily right or wrong – but it works.
  

References
¹Wilson, Larry; Wilson, Hersch. (1987). Changing the Game: The New Way to Sell. NewYork: Simon and Schuster.
²Trailer, Barry; Dickie, Jim. (2006). Understanding What Your Sales Manager Is Up Against. Harvard Business Review.
³Arthur, Winfred Jr., Edens, Pamela, Bell, Suzzane, & Bennett, Winston. (2002). Effectiveness of Training in Organizations: A Meta-Analysis of Design andEvaluation Features.
⁴Coulthard, Glen J. (2007). Evaluating the Impact of Training on the Bottom-Line. Retrieved May 31, 2008 from http://www.coulthard.com/articles/trainingroi.html.
⁵Lilly, Frances. (2001). Four Steps to Computing Training ROI.
⁶Sue-Chan, Christina; Latham, Gary P. (April 2004). The Relative Effectiveness of External, Peer, and Self-Coaches. Applied Psychology, 53, 260.
⁷Mountainside Group. Sales Career Coaching.  Retrieved November 8, 2006, from http://www.mountainsidegroup.com/coaching.htm.
⁸Drucker, Peter. (2004). The Daily Drucker. New York:Harper Collins.