The burden of the global pandemic has prompted businesses to question every line in the budget. As leaders begin to plan for the year ahead, they are reexamining the necessity and value of all expenditures. As a result, every person involved in budgeting must be prepared to properly advocate for the spending they deem important. Even the most widely held assumptions about value will be tested.
This new reality presents challenges for sales managers and learning leaders because an investment in virtual sales training requires one to assign financial value to something that is intangible. Despite this challenge, new research is strengthening arguments that support these kinds of investments. As recently as H2 of 2020, Bain & Company examined the most effective drivers of value for businesses. Their analysis, focused on 3,714 publicly traded companies, determined that improving operational performance has 35 times the impact on total shareholder return than the predictability of earnings per share. Simply, the capabilities of those within the business are far more important to success than the ability to deliver consistent earnings growth.
This finding runs counter to the long-held notion that predictable returns have an importance that towers over everything else. Moreover, the finding makes intuitive sense because the skills found within a business are the starting point in a chain of events necessary to arrive at a profitable outcome. The sales manager’s job is to articulate this chain. They must link the investment in training to more effective selling behaviors. Then they must link those behaviors with improvements in selling metrics like win rate, deal size, time to productivity, and profitability.
Here we examine three ways in which sales leaders and learning leaders can secure the necessary budget resources by advocating for the value of online, instructor-led sales training that equips professionals with virtual selling skills.
Articulate the Intensified Demands of the Future
Often, the budgeting process begins with a look into the past. Leaders review expenditures across departments and divisions by using figures from the previous year as a benchmark. Future spending is determined by merely increasing or decreasing these historical numbers. The unprecedented circumstances of today have brought this approach into question. Today, zero-based budgeting is emerging as a preferred method. Zero-based budgeting is the practice of starting from zero and reexamining every line item in a budget rather than simply using figures from the previous year as a guide. Recent reporting from The Wall Street Journal illustrates how more businesses are using this process to “navigate the effects of the coronavirus pandemic.”
This development underscores a key characteristic of the pandemic: leaders must base decisions less on the past and more on a future that will not resemble what came before. Moreover, what lies ahead will present more challenges than previously seen. Sales leaders can use this fact as a basis for their argument that succeeding in such a future will require sharper, far-reaching skills. The skills that were sufficient in the past cannot be depended on in a market characterized by intensified competition and eroding opportunities. Research from McKinsey found that “most companies that had launched successful reskilling programs said they were better able to address skill gaps,” leading to the conclusion that “simply getting started on reskilling programs makes organizations better prepared for potential future role disruption.”
The takeaway from these findings is that many organizations are experiencing a degree of change significant enough to alter their business model. As a result, even the sales professionals with strong historical performance will need to redevelop skills to properly position a revised value proposition. Additionally, sales professionals will need to do so over a virtual medium as remote engagements progress from something that is a necessity to something that is normalized.
Just as zero-based budgeting aims to eliminate assumptions rooted in the past, a skills training initiative also brings a refreshed perspective to the understanding of what capabilities will matter in the future, regardless of what happened in the past. The intensity of changes today represents a rare opportunity for sales managers to reset the long-held notions of those who were hesitant to embark on a skill development program.
Advocate for the Value of Just-in-Time Learning
As the demands of the marketplace change, sales professionals not only need new skills — they need them fast. The reason: customers are continuing to triangulate their position on a shifting landscape. Sales professionals must be able to track these changes. Doing so means leveraging the right skills at the right time. The problem is that the most pertinent skills, like effective selling over a virtual medium, are also the ones most likely to be absent from the sales professional’s repertoire because these skills were not critical for success prior to COVID-19.
Therefore, sales professionals who seek budget resources for virtual selling skills should articulate the speed afforded by online learning. With an online approach, sales professionals have an opportunity to apply what they have learned to in-pursuit sales opportunities. This characteristic is in contrast to traditional classroom learning in which concepts are not applied until after the sessions are complete. On-the-job application means sales professionals can return to the next training session with an understanding of how the concepts work in real selling scenarios. At Richardson Sales Performance, we have leveraged this benefit in our methodology by incorporating “on-the-job assignments” in which learners are tasked with applying the concepts to real customer engagements, then reporting on results in the following virtual instructor-led training session.
This speed to market matters in a competitive environment in which top-performing sales professionals spend “four more hours per week than other reps communicating with customers,” according to a study from Bain. Finding these extra four hours is easier when learners can immediately transition from the classroom to the field without delay.
Using online instructor-led training also improves the learner’s recall through a mode of learning called “distributed practice.” Our approach of instructing, which consists of four sessions each lasting four-hours, is critical for driving retention, according to research in the Association for Psychological Science. The study found that learners more easily retain concepts when they have a greater number of intervals between sessions. These intervals allow time for the participants to fully absorb the concepts and material.
Illustrate the Efficiency of a Flexible Cost Structure
Annual global business travel spending totals approximately $1.5 trillion, according to the Global Business Travel Association, and historically represents more than half of total airline revenues.
This considerable expense suggests that selling organizations have operated under the idea that travel is a burdensome but inescapable cost. Today, forward-thinking business leaders are changing their thinking.
These leaders are realizing that new technology leveraged the right way can bridge the divide that separates sales professionals and instructors without sacrificing quality. This approach comes at a time when it is needed most. Organizations are increasingly distributed across the globe, professionals are pressed for time, and limited by logistical challenges. Put simply, leaders are discovering that ROI justification is easier when the substantial cost of travel and related non-selling activities can be removed from the equation. A training program yields financial benefits earlier when the required financial outlay drops.
The avoidance of travel expense is only part of the appeal. Offering virtual selling skills via online instruction offers an immediacy not possible when attempting to bring geographically distributed teams together in a single location. Leaders can start earlier and therefore see benefits earlier. This cost is also flexible because the training initiative can be scaled up as needed without logistical concerns. Organizations can get started without a massive, front-loaded capital outlay. This feature allows an investment in training to occur in a staggered or incremental fashion.
Achieving 2021 goals means starting sales training now because learning, adopting, maintaining, and measuring new selling skills requires a considerable timeline. Moreover, the sales cycle of today is increasing. As more sales professionals position digitally transformative solutions, the time needed to position these dynamic, intangible products and services increases. The sphere of stakeholders is growing. This fact, coupled with the growing influence of procurement professionals, means that the sales professional has a longer and more circuitous route to the sale. Reaching the end of this path within 2021 means advocating for training resources today.
Sales leaders must be prepared to deliver a compelling, persuasive, and well-reasoned position on the value of allocating budget resources to sales training initiatives. As 2021 budgets take shape, sales leaders can expect more resistance in these discussions. Each person involved in the budgeting process will advocate equally hard for the capital demanded by their projects.
Earmarking dollars for training means properly highlighting the intensified challenges that await in an economy beset by the pandemic. Leaders must also illustrate the benefits associated with learning that matches the pace of change in the marketplace.
Finally, budget discussions should underscore the unique benefits of a scalable investment that offers a more immediate ROI benefit without the need for immense, front-loaded costs.