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Does Sales Training for Retail Make Sense? Part 1 Seth Brickner

A long held belief in the retail indus­try is that it doesn't make finan­cial sense to invest in sales train­ing for hourly employ­ees.  The rea­sons some­times cited:

  • Aver­age turnover dic­tates that an employee prob­a­bly won't be around long enough to recoup the invest­ment in her/his training.
  • Because they're typ­i­cally non-commissioned, these employ­ees don't have a vested inter­est apply­ing sales skill to their jobs.
  • For the type of entry-level jobs that retail sales­peo­ple often occupy, there's lit­tle need for sales train­ing because cus­tomers already know what they need to buy.

Before address­ing these rea­sons, let's see if there's any poten­tial for sales train­ing to pay for itself.

Con­sider Annie, an entry level retail employee who earns $9.74 per hour and works 30 hours per week.  If she sells an aver­age of $200 of mer­chan­dise an hour with an aver­age 29.72% profit mar­gin (based on esti­mates from the U.S. Depart­ment of Labor's Bureau of Labor Sta­tis­tics), she's worth about (30 hours per week) x ($200 in sales per hour) x 29.72% = $1783 in gross profit to her employer each week.  It costs Annie's employer about $314 in her labor costs for that same period. Annie thus con­tributes, on aver­age, over five times what it costs to employ her.  With an aver­age turnover rate of 2.9 years (based on lat­est data avail­able in from the Bureau of Labor Sta­tis­tics) she'll have con­tributed over $268,000 in gross prof­its to her employer dur­ing her tenure.

trimmed stack of 100 dollar bills 2 Does Sales Training for Retail Make Sense?   Part 1Let's say that after six months on the job, Annie's employer invests $350 in sales train­ing for her.  As a result of learn­ing how to cross-sell, up-sell and match the needs of her cus­tomers to the prod­ucts she sells, Annie's able to increase her sales by a con­ser­v­a­tive 8%.  Over her esti­mated remain­ing tenure with her employer she will have pro­vided an addi­tional $17,803 in gross prof­its, or a 5087% ROI for her employer.  Clearly, this is the type of invest­ment that any busi­nessper­son with the resources would want to make; the amor­tized cost of this train­ing invest­ment over Annie's remain­ing tenure works out to less than 9.5 cents per hour!

In a Part 2 of this series, we'll ana­lyze each of the long-held beliefs cited above.   In the mean­time, con­sider what value sales train­ing might bring to your orga­ni­za­tion.

Seth Brick­ner is a Devel­oper and Facil­i­ta­tor with Impact Learn­ing Sys­tems Inter­na­tional. In addi­tion to train­ing and devel­op­ment, his back­ground includes edu­ca­tion, tech­ni­cal sup­port and cus­tomer ser­vice. When not trav­el­ing or in front of a com­puter mon­i­tor, Seth can be found run­ning, cook­ing, play­ing gui­tar, read­ing, con­vinc­ing him­self he can sing, or enjoy­ing the hik­ing trails of Colorado.
6 Does Sales Training for Retail Make Sense?   Part 1
Seth Brickner
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