Cost of Adding a Salesperson

How much does it cost to add an untrained salesperson to the floor?

I am working on a proposal to ramp up our training program to the next level, and am looking for #'s.

How much business does it cost to have untrained sales staff on the floor in terms of lost revenue?

How much does the average dealer that actually trains spend on training for the employee?

Is there any ROI data?

I have to move beyond gut feelings here....anyone know where I can get researched #s?

Thanks

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Permalink Reply by John Fuhrman on July 20, 2011 at 10:02am

Michal,

For years it has been said that each alesperson that has to be replaced will cost the dealer about $35,000. I would check with NADA to see if that can be substantiated but I have another suggestion. Get the numbers from the dealer.

If they're going to hire a sales person, what will the ad cost? Who will be doing the interview? What is the cost of taking that person away from their job to do that? If it's a manager doing the interviews, how much will be lost on deals that they can't close because they are interviewing?

Training. If they are hiring one person, there will be no outside trainig to start. Two alternatives. Give them to "Five Car" Fred and have them "learn" the ropes or have a manager work with them to show them the proper procedure. If the manager does this, ask the above questions again.

When I am talking to a dealer concerned about the cost of bringing us into do a recruiting/training campaign and theyare concerned about cost, this is what I talk about. In nearly 100% of the cases, a full campaign will cost the dealer far lessthan if they posted on "Craigslist" for free and did it themselves. In additon, people properly trained by a professional trainer tend to stick around longer. That's a huge savings.

Regarding how much a dealer spends on sales training, there are answers all over the park. The sad truth is, when dealers need training the most, they tend to spend the least. The last few years when business was slower, would have been the ideal time. Easier to get the time to do it, more people could attend, and the benefits of getting more deals would always pay for itself.

Use your ROI in reverse. Ask the dealer what they want for an ROI on each salesperson per year. Then ask them what they are willing to invest to get it.

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Permalink Reply by Michal Ann Benedict Enders on July 20, 2011 at 4:11pm

I love that ROI in reverse! Great idea!!!

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Permalink Reply by Joe Clementi on July 27, 2011 at 11:23am

Michal - There are a couple of true measurements that can be utilized for performance thus creating an ROI for training and retention. The measurements are "cost per guest" and a real simple tool for measuring the "cost of follow up" on traffic. These metrics will help you put your dealership numbers into a spreadsheet that measures the ROI of the sales person. Once you have proven the cost of each customer and the cost for proper follow up - you can present those costs to affirm the value of investing in a sales training program. I can't attach the spreadsheets here but if you email me at joe@uhdavis.com , I will forward those excel spreadsheets to you.

Congratulations, on attempting to improve your training programs. Sales people are the face of a franchise and need constant improvement training. Here is an article that I wrote for my blog (http://frontlinetrainingteam.blogspot.com/) that talks about specific steps for sales managers' -http://frontlinetrainingteam.blogspot.com/2011/07/sales-managers-st...