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1 2015 Richardson and Training Industry, Inc. All rights reserved Richardson and Training Industry, Inc. All rights reserved.

2 Contents Overview...3 Key Findings...3 Best Practices in Design and Delivery of Sales Training Programs...5 Improving Sales Performance...6 Training Method Utilization...8 Best Practices for Training Delivery Trends in Sales Training Design and Delivery Leveraging External Training Providers Summary Demographics Company Sizes Industries Represented Departments Represented About This Research About Richardson About Training Industry Richardson and Training Industry, Inc. All rights reserved. 2

3 Overview Sales training and sales effectiveness has been a cornerstone of many organizations strategies to increase revenues and drive efficiency. However, the landscape of sales training is subject to constant change whether from technology, buyer education, communication strategies, or training delivery methods. As markets continue to grow and evolve in complexity, learning leaders need to actualize their organizations initiatives to improve sales performance. This includes maintaining current sales training priorities, planning for future needs, keeping current with trends in sales training methods, deciding how to allocate training budgets, and leveraging external training providers. A recent online poll at Trainingindustry.com asked training professionals which delivery method their organizations would use most in the next six months; of 229 responses, 52% said their organization would use virtual instructor-led training, 28% for classroom-based training, 13% for online courses or programs, and 7% for mobile applications. However, is this snapshot poll indicative of what learning leaders across different industries and in organizations of varying sizes are using for sales training improvement? The 2014 ATD State of the Industry report 1 states that training expenditure per employee averaged $1,208, 27% of those learning expenditures involved external service providers, and formal classroom-based training comprised 70% of training hours. Market predictions, however, forecast that e-learning will see greater utilization by organizations around the globe in coming years 2. Such current trends pose challenges to sales training organizations on how to evolve, what to evolve, and when partnering with external training providers with whom to evolve when it comes to making measurable, sustainable improvements to sales training effectiveness. To explore these issues, Training Industry, Inc. and Richardson conducted a study to examine the programs and initiatives that organizations are using for sales training and to look for patterns in how these organizations draw on external expertise to assist in achieving performance goals. In October 2014, 223 companies completed a survey reporting their organizations current and future strategies, training effectiveness, and best practices for sales training initiatives. Key Findings 82% of organizations sales training programs were rated effective 17.6% said their company s program is ineffective The top current priorities for improving sales performance are: 1 Archive/2014/11/2014 State of the Industry Report Spending on Employee Training Remains a Priority 2 e learning market report.html 2015 Richardson and Training Industry, Inc. All rights reserved. 3

4 Developing sales process (e.g., lead, opportunity, and account and territory management) Training of sales representatives and managers Coaching of sales representatives and managers Training delivery methods were shown to conform to the following trends: Instructor-led classroom training, on-the-job training, and on-the-job coaching are currently used most frequently Instructor-led online training, video-based learning, mobile learning, and social learning are most frequently identified for planned use On-the-job coaching, classroom training, and on-the-job training were rated the most effective methods Gamification, mobile/social learning, simulations, videos, and e-learning are seen as the least relevant to effectiveness The most significant influencing trends in the sales training marketplace were: Training sustainment (e.g., continuous learning) Interactive learning On-demand training delivery ROI and learning measurement Planned areas of investment in learning technologies: Social media integration, training delivery tools, and training platform integration (e.g., LMS/CRM incorporation, cloud migration) Findings on leveraging external providers for sales training: External providers were leveraged most often for training sales representatives and managers, sales process (e.g., lead, opportunity, and account and territory management), and for L&D data/tools/crm The most important selection criteria for external providers included: Trust that the provider can deliver a solution Ability to customize solutions Industry expertise Fit with company values/culture 2015 Richardson and Training Industry, Inc. All rights reserved. 4

5 Best Practices in Design and Delivery of Sales Training Programs The importance of sales training effectiveness to organizations is widely known, as sales volume or sales turnover are often the primary measures of firm performance by establishments such as the Bureau of Labor Statistics. Therefore, an effective sales training program best prepares sales representatives and managers to deal with market changes, new product offerings, and new selling frameworks in other words, the company that takes a strategic approach to sales improvement is more likely to maintain a competitive edge. But, how effective are organizations at sales training overall? As shown below in Figure 1, the majority of the learning leaders (82%) we surveyed rated their organization as being somewhat effective or very effective when asked about the utility of current efforts to improve sales performance. Figure 1. Effectiveness of Current Sales Performance Improvement Efforts This suggests that the majority of organizations are realizing successes with their sales training programs. But, what are the 22% of very effective organizations doing that sets them apart? How and where are they different compared to the 18% of ineffective organizations? Throughout this report, we will highlight the differences between these two groups to demonstrate how best practices are being utilized in sales performance improvement efforts. In addition, where applicable, we will emphasize differences between large and small organizations with respect to their sales training practices Richardson and Training Industry, Inc. All rights reserved. 5

6 Improving Sales Performance Though the majority of companies were rated effective at sales training, the constantly shifting business landscape requires these organizations to adapt and change to remain effective. To take a pulse on what these adaptations might be, we asked learning leaders what their current top priorities were for improving sales performance. As shown below in Figure 2, the priorities endorsed most often were improvements to the sales process (leads, opportunity generation, and account and territory management), training of sales representatives and managers, and coaching of sales representatives and managers. Figure 2. Priorities for Improving Sales Performance When considering organizations rated very effective at improving sales performance versus organizations rated ineffective, consistent patterns of priorities emerged. As shown in Figure 3 below, effective organizations were more likely to endorse the top-identified priorities of sales process, training, and coaching by a margin of 7-8% over ineffective organizations. Effective organizations were also 11% less likely to endorse forecasting as a priority compared to ineffective organizations Richardson and Training Industry, Inc. All rights reserved. 6

7 Figure 3. Priorities for Improving Sales Performance As highlighted by the arrows above, it is notable that the top three priorities are identical for very effective and ineffective organizations. This suggests that even though the ineffective companies may have current complications with their sales training programs, they are not generally prioritizing different initiatives compared to the most effective organizations. Similarly, effective and ineffective organizations both tended to endorse a variety of priorities, demonstrating that there is a mixture of sales training effectiveness goals across companies. Considering very effective organizations, further analysis showed that endorsement of one priority, such as improving the sales process, did not tend to co-occur with other top-identified priorities. Of the top three priorities shown above, between 24% and 28% of very effective organizations endorsed at least two of three; 10% of very effective organizations identified all three as top priorities. This suggests that while the most effective organizations may be engaged in several initiatives, they tend to be focusing resources on a single main priority for improving sales performance Richardson and Training Industry, Inc. All rights reserved. 7

8 Training Method Utilization With more than 3 billion internet users worldwide, one might expect many organizations to have adopted a multitude of web-based tools and resources for delivering training. However, our results demonstrated that while online training delivery is certainly on the rise, it has not yet usurped more traditional offline delivery methods. As shown below in Figure 4, current methods used by organizations to deliver sales training are dominated by face-to-face modalities. Namely, instructor-led training in a classroom setting, on-the-job training, on-the-job coaching, and training led by the sales manager. Figure 4. Current Delivery Methods for Sales Training and Development Despite the dominance of face-to-face delivery methods, it should be noted that online deliveries did not go unrepresented; virtual instructor-led training, for instance, is used by 44% of organizations. To explore the issue further, we also asked learning leaders what types of training delivery methods their organizations were planning to use in the future. As shown in Figure 5, online and informal learning were endorsed most frequently Richardson and Training Industry, Inc. All rights reserved. 8

9 Figure 5. Planned Delivery Methods for Sales Training and Development Of note in the above is the clustering of technology-enabled training delivery methods as the most frequently planned delivery method, whether virtual, on-demand, or informal. Clearly, with all methods showing a planned usage of 17% or more, organizations are seeking new delivery modes for training, whether it be to update existing delivery formats or to augment an established delivery platform with alternatives to accommodate a wider range of learning styles and/or technologies. As organizations balance the utility of new modes of training delivery versus the cost to implement, current information about the effectiveness of different methods allows both internal and external sales training providers to gauge where the training marketplace is headed. Next, we will explore the use of delivery methods in more detail to elucidate differences between effective organizations, as well as by organizational size Richardson and Training Industry, Inc. All rights reserved. 9

10 Best Practices for Training Delivery As shown below in Figure 6, there were substantial differences in utilization rates for different media by organizations rated as very effective compared to ineffective organizations. Specifically, on-the-job training, onthe-job coaching, and manager-led training were all used 1.5 times more frequently by effective organizations. Further, formal live coaching, train-the-trainer, and mobile learning delivery methods were used twice as often by effective organizations. Of particular note is that there were no methods endorsed more frequently by ineffective organizations in other words, effective organizations not only use a wider array of training delivery methods, they also utilize them more frequently. Figure 6. Current Delivery Methods for Sales Training and Development, Effectiveness Split Figure 6 also suggests that effective organizations are matching the modality of training delivery to learner preferences, whereby the top three delivery methods are also rated as the most effective (see Figure 8). The above chart also shows that the most effective organizations are open to new sales training methods on the whole, as well as to a greater mix of formal and informal methods. From the perspective of innovation in training, the most effective organizations appear to have embraced many of the recent trends in training delivery. For instance, while mobile learning is utilized twice as often by effective companies, as already noted, gamification and informal learning methods are also substantially more likely to be 2015 Richardson and Training Industry, Inc. All rights reserved. 10

11 used by effective organizations. Results such as these suggest that the organizations that do an exemplary job of training sales staffs are embracing newer technologies at a faster rate than ineffective organizations though not necessarily to supplant face-to-face training, but as a supplement. Next, we analyzed training delivery methods as a function of organizational size. With some technologies, there may be institutional barriers, such as resources, in-house expertise, supporting infrastructure, or tangible business use cases, that distinguish the technologies able to be adopted by companies of various sizes. As shown below in Figure 7, we found tangible differences in utilization rates of delivery methods by organizational size. In particular, instructor-led training, on-the-job training, self-paced e-learning, and mobile learning were all used more often in larger organizations (i.e., those companies with 500 or more employees), as marked by the blue arrows. Smaller organizations were more likely to use on-the-job coaching, social learning, and gamification embedded into a LMS, as indicated by the red arrows. Figure 7. Current Delivery Methods for Sales Training and Development, by Organizational Size 2015 Richardson and Training Industry, Inc. All rights reserved. 11

12 Though a variety of delivery methods are being used by organizations, it is also important to note which methods learning leaders feel are the most effective for sales training and development improvements. As shown below in Figure 8, on-the-job coaching, instructor-led training, on-the-job training, and formal live coaching were most often rated as a very effective delivery method. Figure 8. Effective L&D Delivery Methods for Sales Training (Proportions of Very Effective Ratings) Of interest is that the perceptions of effectiveness of some delivery methods may be a contributing factor to their adoption. For example, embedded learning in support tools and mobile learning were not seen as particularly effective for sales training, nor are they adopted by a large number of organizations according to Figure 4. It may be that organizations have not yet integrated these technologies successfully into their sales training strategic plans, or there may be implementation obstacles, such as a lack of change management initiatives to drive adoption rates among sales staffs Richardson and Training Industry, Inc. All rights reserved. 12

13 Trends in Sales Training Design and Delivery Beyond internal issues of sales training effectiveness, strategic priorities, and delivery methods, there are external factors in the superordinate sales training marketplace that drive investments in organizations. We asked learning leaders to provide information about the training trends that are influencing decision-making in their organizations. As shown below in Figure 9, training sustainment (e.g., continuous learning), greater interactivity, demonstrable ROI, and striving for an on-demand, personalized training experience were the most frequent trends impacting sales training directives. Figure 9. Trends Influencing Sales Training and Development We feel it is noteworthy that although instructor-led classroom training is the most frequently used delivery method, as shown earlier, many of the trends influencing sales training involved aspects typically associated with technology and learner control, such as interactivity, on-demand availability, and personalization of the learning experience. Similarly, training sustainment and measurement show organizations actively treating sales training as a process rather than a point-in-time event by acknowledging the strategic importance of continuous learning and training ROI. Along with training trends, we asked learning leaders where their organizations would likely be investing for future sales training improvement efforts. As shown in Figure 10, training of sales representatives and managers, 2015 Richardson and Training Industry, Inc. All rights reserved. 13

14 coaching of sales representatives and managers, and expenditure-related data, tools, and CRM systems were most frequently identified as being areas of increased spending. Figure 10. Direction of Future Investment for Sales Training Performance Improvement Of particular note is that Figure 10 shows a planned increase in spending unilaterally across all areas. Further, as plans to increase investment levels trends downward across improvement efforts in the graph, there is not a simultaneous uptick in plans to decrease investment. It is a telling indicator of sales training growth that the overwhelming majority of companies are increasing or maintaining their investment levels in sales improvement efforts, illustrating an interest in strategic diversification by organizations. In addition to strategic investments, we also asked learning leaders about expected investments in technology and found rather uniform investment levels planned across social media, training platform integration with other systems, training delivery tools, and training authoring for new and existing content Richardson and Training Industry, Inc. All rights reserved. 14

15 Next, we asked learning leaders which technologies organizations were upgrading or introducing in the next one to two years. As shown in Figure 11, training delivery tools and social media integration were most often identified to be upgraded. Notably, all technologies are planned to be upgraded by at least 20% of organizations, so although delivery tools and social media were the most prevalent, many companies are keeping their sales training programs current with technological advances and innovation. Figure 11. Planned Introduction/Upgrade of Learning Technologies Although information on learning technology upgrades in general is useful to shed light on the planned utilization of learning technologies, it is informative to explore whether there are any differences based on organizational effectiveness with sales training. Figure 12 below shows the difference between very effective organizations and ineffective organizations with respect to the differences in their plans to upgrade learning technologies Richardson and Training Industry, Inc. All rights reserved. 15

16 Figure 12. Planned Introduction/Upgrade of Learning Technologies, Effectiveness Split As shown above, effective organizations are more likely to be introducing or upgrading training delivery tools and social media. In contrast, ineffective organizations are focused more heavily on authoring tools for both new and existing training content. If training is viewed as a lifecycle, this could suggest that ineffective organizations are targeting content authoring as a means to improve sales training effectiveness before turning their attention to learning technologies that are involved with training delivery and informal learning Richardson and Training Industry, Inc. All rights reserved. 16

17 Leveraging External Training Providers In addition to the reasons why an organization selects one external provider over another, we were interested in what these organizations were leveraging external training solutions to accomplish. As shown below in Figure 13, the most common areas were training sales staff, improving the sales process, managing data and tools, and coaching sales staff. Notably, there are no areas where engaging external providers was endorsed less than 20% by the learning leaders completing our survey, suggesting that while there are conspicuous trends toward training and coaching sales staff, organizations are leaning on external solutions across the spectrum of initiatives under study. Figure 13. Propensity to Engage External Providers for Sales Training Solutions Lastly, we asked learning leaders what specific criteria they considered when choosing an external provider to deliver training solutions and support, as displayed below in Figure 14. Of note is that only 17% of organizations do not plan to partner with external sales training providers Richardson and Training Industry, Inc. All rights reserved. 17

18 Figure 14. Criteria for Selecting External Providers As shown above, the general criteria organizations rely on most when choosing an external sales training provider are trust in the delivered solution, the ability to customize training content, demonstrated expertise in the client organization s industry, and fit with the culture and values of the client organization. While other criteria are not ignored by organizations (with the exception of the very low endorsement of accolades in industry media), factors such as costs and peer recommendations simply were not as important to learning leaders. As before, we split the data to examine differences between very effective organizations and ineffective organizations as shown below in Figure 15. While all organizations factor trust, expertise, and fit into their decisions, effective organizations were more likely to respond to the salesperson, whereas ineffective organizations were much more focused on customization, cost, and domain expertise. Effective organizations also emphasized customer service and length of time the external provider has been in business significantly more than ineffective organizations. Also of note is the finding that ineffective organizations were 9% less likely to partner with an external training provider Richardson and Training Industry, Inc. All rights reserved. 18

19 Figure 15. Criteria for Selecting External Providers, Effectiveness Split Again, we considered the data based on organizational size, as shown below in Figure 16. Figure 16. Criteria for Selecting External Providers, by Organizational Size 2015 Richardson and Training Industry, Inc. All rights reserved. 19

20 As shown, larger organizations tend to seek out external providers with industry expertise and customization. Smaller organizations, on the other hand, rely more on trust, fit, and a track record of success when working with providers. This suggests a pattern whereby smaller organizations need a greater degree of cultural alignment with a provider, while larger organizations may be more focused on content alignment. We also asked learning leaders about best practices for engaging external training providers. A total of 404 separate practices were provided, which were coded into the 11 categories displayed below in Figure 17. Figure 17. Best Practices when Considering External Providers for Training Solutions As shown, project support and service was the most important factor for external providers, followed by being knowledgeable about industry market sectors and organizational processes, demonstrated ROI and a clear value proposition, and having a demonstrable track record of success in the market or with similar clients. Example comments for the top four practices are shown in the table below. Provider Practice Project Support Market/Process Knowledge ROI/Value Proposition Reputation/Track Record Example Comments Ease of working with provider, ability to engage Familiarity of unique demographics of target markets, they do deep research on our business, customers, sales reps skills, etc. Making sure solution is cost effective, cost reduction and value increase demonstrable ROI Has clients in my industry and a good track record of producing results 2015 Richardson and Training Industry, Inc. All rights reserved. 20

21 Next, we examined whether there were differences in reported best practices for engaging external providers based on organizational size. Figure 18. Best Practices when Considering External Providers, by Organizational Size Project Support and Service Focus on ROI/Value Proposition 11% 19% 18% 18% Command of Market/Process Knowledge 14% 16% Reputation/Track Record of Success 11% 15% Customization of Training Content 10% 14% Adapt Training to Client Culture 6% 9% Adherence to Deliverables Technology Integration 5% 5% 5% 7% Develop/Support Sustainable Training Tools 2% 6% Utilize Effectiveness Metrics Ensure Leadership Support 2% 1% 1% 4% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Over 500, N = 219 Under 500, N = 185 As shown above, larger organizations tended to consider ROI focus and command of market knowledge to be more important (blue arrow), compared to smaller organizations preference for reputation and customization (red arrow) as best practices. This pattern resembles the above criteria for selecting an external provider, with the notable exception of smaller organizations now identifying content customization as a best practice. This suggests that smaller organizations somewhat expect customization as a de facto best practice for external providers when meeting clients needs, whereas larger organizations are expecting a more global orientation toward how a provider can help position a client in the market Richardson and Training Industry, Inc. All rights reserved. 21

22 Summary For current sales training programs, 82% of organizations we surveyed were rated as being effective. The top priorities for improving sales performance were found to be developing the sales process, training, and coaching of sales personnel. Sales training tends to be delivered via instructor-led classroom training, on-the-job training, and on-the-job coaching, with instructor-led online training, videos, mobile learning, and social learning being the delivery tools most organizations plan to integrate for training delivery in the near future. Sales training trends that are influencing organizations learning and development investment decisions include training sustainment, interactivity in training, on-demand delivery, and a focus on learning assessment and ROI. Technologies are a focus of many of these investment decisions, the most frequently identified being social media, training delivery support, and training platform integration with other systems. Although not all organizations in our survey reported leveraging outside providers, those that do tend to seek third-party solutions for training sales personnel, improving the sales process, and for working with data and tools, such as client relationship management databases. Organizations tend to seek external training providers based on trust that the provider can deliver, the ability to customize training solutions to fit the organizations needs, demonstrated industry expertise, and fit with the client companies values and organizational culture Richardson and Training Industry, Inc. All rights reserved. 22

23 Demographics Company Sizes Approximately 53% of respondents came from large organizations (see Figure 19). Figure 19. Company Sizes Represented 2015 Richardson and Training Industry, Inc. All rights reserved. 23

24 Industries Represented Business services and consulting made up the largest percentage of the sample (see Figure 20). Further, approximately 51% of respondents represented the next four largest industries, including technology/telecommunications, retail/wholesale organizations, banking/finance/insurance, and manufacturing/construction. Figure 20. Industries Represented 2015 Richardson and Training Industry, Inc. All rights reserved. 24

25 Departments Represented As shown below in Figures 21 and 22, the majority of respondents represented leadership roles in sales, learning and development, and human resource departments. Figure 21. Departments Represented Figure 22. Job Roles Represented 2015 Richardson and Training Industry, Inc. All rights reserved. 25

26 About This Research About Richardson Richardson is a global sales training and performance improvement company. We have more than 30 years of experience creating customized solutions that build organizational ability and improve individual skill necessary to grow profitable sales. We work with some of the largest and most sophisticated companies in the world, and we have won numerous awards. We create solutions that fit your unique culture and situation, helping you execute strategy through your sales force. Please visit us at to learn more about how we help our clients deliver and sustain highimpact sales training solutions. About Training Industry Our focus is on helping dedicated business and training professionals get the information, insight, and tools needed to more effectively manage the business of learning. Our website, TrainingIndustry.com, spotlights the latest news, articles, case studies, and best practices within the training industry. For more information, go to call , or connect with us on Twitter and LinkedIn. About This Research Training Industry, Inc. research captures the collective wisdom of learning professionals, revealing fresh data on trends and practices in the evolving training market. Copyright 2015 by Richardson and Training Industry, Inc. All rights reserved. No materials from this study can be duplicated, copied, re-published, or re-used without written permission from Richardson or Training Industry, Inc. The information and insights contained in this report reflect the research and observations of Richardson and Training Industry, Inc. analysts Richardson and Training Industry, Inc. All rights reserved. 26

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