Friday, July 11, 2014

Not Training Is Costly

Earlier this week, I had a conversation with the CEO of one of the 40 largest U.S. air charter companies. We were discussing whether or not his company would benefit from a review of the end-to-end sales process: basically every step from “Hello” to “How Did You Enjoy The Flight.”

He didn’t think there would be much benefit because 95% of his business was from repeat customers. The CEO was confident that his sales staff had those processes and procedures down pat.

I pointed out that 5% of his business is from new customers and prospects. Looked at from a different angle, that means 100% of the new customer calls and quotes are following an exception, or non-standard process. The sales folks individually are not  getting much practice at handling new customers. That’s why every new customer call is an exception.

Let’s relate this to recurrent pilot training. When your pilots are on the simulators, would you expect them to spend 95% of the training time practicing normal operations? Or would you expect them to spend most of the simulator time training and practicing for exceptions?

Once you decide to do refresher sales training, what do you need to teach? One option is to do a review of the end-to-end process for whatever exception applies to your company. Another approach is to retrain just the parts that are different from the standard process.

I prefer a third method. I would start by role playing a new customer with each sales person, and having the sales person take me through the end-to-end process. After doing so with each member of the sales team, we’d know two things: 1) where does any individual need personal coaching; and 2) what are the areas in common where the team needs some refresher training?

Is it worthwhile spending time and money on refresher sales training? Answer these few questions: a) what is the average lifetime value of a new customer; b) how many new customer quotes did not turn into trips in the past six months; c) what’s the opportunity cost from those lost sales?

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