Sales Training 2.0 - The Blog

Sales Channels - options aplenty, but what's the right choice for your firm?

tcbmartin@gmail.com (Administrator) — Sun, 07 Feb 2010 21:49:15 +0000

There are really two times that it is appropriate to make a decision about what channel(s) to use for your selling efforts: 1) before you launch your training/consulting firms, and 2) every day that ends in 'y' after your company is open for business!

Of course your 'switching costs' will rise in terms of changing your sales channel model after you are in business but, as history has shown, the right sales channels for a training firm change as the company evolves.

When I am asked what the right sales channel is for a training company I give the age old consulting answer of "it depends." Since that makes for a cr@ptastic blog entry, let me share some of the thinking I go through after that initial answer.

I will also point out that a similar but slightly different thinking should constantly be considered for your delivery channels (ie using employees, independent contractors, or partners to deliver your training and consulting).

You might use this list of "critical questions" to guide your decision making process. For many of these questions you should peer through two lenses - first, your business today, and second, your business as you are thinking of evolving it.

What is the makeup of the sales force in terms of their demand creation, business development, and general selling ability?
What quality and quantity leads are your marketing efforts generating?
Describe your current client base: industries, original lead source for the account, level/title of economic buyer, sales cycle length, etc.
How would you describe the owners appetite for risk and amount of finances planned for investing in the business?
Who are your primary competitors and what is their sales channel model? Do you know how and how much they pay their channel?
What are your typical messages of differentiation against those competitors? And if any element of it highlights the difference in sales, delivery or account coverage model please highlight that.
If you are one of the many training firms that typically says "We're kinda different and we really don't have competition on most deals" then please describe your typical selling message to convince prospects to not "do nothing."
How well can your owners handle a salesperson who is absolutely not 'managed' as much as they are 'herded'? You might have to stick to employee sales channels just to prevent "Founders Ulcer", a common and painful malady second only to "Crazy Founders Syndrome"¹ in the training industry.

Feel free to pick up your fingers and set up a 60 minute call on my calendar if you would like to have a preliminary (no charge) conversation about what to do with these answers. In addition I would encourage you to review your answers with your sales, marketing and product development department heads - and compare answers.

To help in that conversation here are some pointers on what other training firms have done, using a typical example of a US-based training firm founded by 2 former sales people.

Startup phase: US-only sales force consisting of the founders only, ie a direct sales force. The founders are also doing all the workshop delivery worldwide.
Startup + 1 year: Founders are still selling and now independent contractors (ICs) are doing some of the delivery for ~US$1,500 per day
Startup + 2: Independent sales agents (also ICs) are added in the US and probably getting paid commissions of about 40-45%
Startup + 3: An international distributor is added who is likely paying 25% or so royalties back to the firm (ie they are keeping 75% and responsible for selling, teaching, and printing and translation of materials). Distributors are often in non-English speaking countries
Startup + 4: Independent sales agents are added in English-speaking locales like Australia and the UK. Direct sales people are added in the US, one at a time with a fairly low base and high commissions upside. Because of the small size of the firm there is little channel conflict between direct sales reps, US ICs, non-US ICs, and global distributors however people 'plant flags' on their sales funnels for big account names near where they live, even though they have no active account penetration for them. Your stomach hurts a little about this but you assume you'll be fine because you recruited good, ethical people
Startup + 5: Because you have invested a lot of money in operations infrastructure as well as marketing, you're now paying ICs commissions of about 30-35%
Startup + 6: Because margins are so much higher with good selling agents than distributors, a decision is made to terminate all distribution partners and replace them with ICs in those countries
Startup + 9: Because margins are so much lower with selling agents outside the US in every but the largest markets, a decision is made to terminate most international ICs and replace them with distribution partners. New distribution partners though as the people that were terminated 3 years ago are still not on speaking terms with you.
Startup + 10: Because you now have a good brand recognition and have continued to build up your infrastructure you are now paying ICs commissions of about 25%. However you are still about 10 points lower in margin than you were in year 2.

Clearly there are a lot of different variations that I have seen that aren't reflected here, but I'm hoping that this was good food for thought.

¹While I haven't written about Crazy Founder Syndrome (CFS) yet, anyone who has ever talked to me for more than 30 minutes about the training industry knows I feel the problem is rampant. I'm not sure if I coined the term but for now I'll take credit for it ... I should also point out that "crazy" has many definitions (though no, I don't mean 'crazy like a fox') - so when I refer to a founder as having CFS I sometimes mean that they are intensely passionate about their own firm but have some blinders on about their firms weaknesses and that they also think that because they have such an easy time selling their wares, any half-decent sales person should be sell exactly how they sell and be successful. Another version of CFS is the founder who is generally referred to with 4 letter words (and not the nice ones) by most former employees and partners.

The $10 a year website for new training firms and independent contractors

tcbmartin@gmail.com (Administrator) — Mon, 16 Nov 2009 19:39:14 +0000

I’ve been talking to a number of people recently who fall into a couple of camps

starting a training firm, or at least hanging out a shingle to be a training firm
starting life as an IC for a training firm
starting to represent multiple firms as an IC and wondering how to convey your new multi-faceted message

Some books and articles advise new ICs and business owners to avoid making the time and monetary investment of setting up their own website. I agree in principle because many new entrepreneurs focus on the wrong things when they start their business – especially when it comes to ‘advertising, marketing and promotion.’ However I know that many salespeople lose credibility with their prospects who look to the web to ‘authenticate’ the people selling to them.

I would suggest two options that can work for a new IC – one of which that can also work for a new 1 to 3 person training company.

Big Animal Pictures

tcbmartin@gmail.com (Administrator) — Fri, 06 Nov 2009 00:00:00 +0000

Over the last few months I have been having more conversations with small training firms as well as people thinking about hanging out a shingle as a sales trainer. In addition to talking about key issues like their Exit Strategy I have, almost without fail, brought up the challenge of how they talk about what they do with their prospects in a simple and concise manner.

Disclaimer: Working closely with a company that does sales messaging (Force Management) influences my bias to the importance of this area.

When I was at OnTarget/Siebel Systems I worked for an executive, Nick Nascone, who was fond of talking about Big Animal Pictures¹. Big Animal Pictures in the training world are the graphics that you use to talk about your business – and can be represented on a Powerpoint slide or hand drawn on a whiteboard, flip chart or napkin.

Seeing my name in lights

tcbmartin@gmail.com (Administrator) — Wed, 04 Nov 2009 00:00:00 +0000

Many thanks to Dave Stein for his kind words and taking up so much space in his blog with this interview of me.

If you aren’t a subscriber to Dave’s blog you can do that here. Dave is the only analyst solely focusing on the sales training space and posts content that is of interest to both training firms as well as buyers of sales training (you know, everyone else in the world!).

Dave runs his research through his firm ES Research, where you can read some free content or subscribe to get access to deep dive reports on training companies or assorted topics related to training.

Please do me the favor of checking out Dave’s blog.

Moving to Virtual Instructor Led Training

tcbmartin@gmail.com (Administrator) — Wed, 24 Jun 2009 20:17:35 +0000

And now for something completely different¹ ... instead of passing along my own bright ideas I thought I would show that I live my life as suggested by a former boss - surrounded by people smarter than me. One of those smart peeps is Ian Savage, a consultant who has reinvented himself as the master of "Virtual Instructor-Led Training (ILT)."

For those of you not familiar with the concept, consider yourself lucky! Most of the training firms I know have been dragged down this path because their biggest clients have imposed travel freezes that effectively kill off their chances to make money the old-fashioned way of running two day workshops. Virtual ILT is another name for "Web-Based Instructor-Led Training," and I'm assuming most of you don't need a decoder ring to know what that implies.

121+ Things You Must Do Before Selling Your Training Company

tcbmartin@gmail.com (Administrator) — Fri, 10 Apr 2009 00:57:14 +0000

Here's a small sampler ...

20. Decide on what you want to do after the sale, and when

21. Consider ideal structure you would like

22. Understand earn outs

23. Locate all your legal documents

There is an excellent document created by the WLS Alliance (a partnership of Whitestone Communications and Luntz, Suleiman & Associates), of which these are 4 of their 121 (and counting) suggestions. If you think there is even a possibility that you might want to sell your training firm in the next 3 years and you don't already have an M&A advisor that you are in love with, I would encourage you to read this document.

Unwinnable Deals - A big problem especially during a recession

tcbmartin@gmail.com (Administrator) — Sun, 15 Mar 2009 00:58:21 +0000

One of the roles I occasionally play for training and consulting firms that I am working with is one of Thought Leadership. In January 2007 this article I wrote was published under my name and that of a salesperson for Applied Concepts Institute in a now defunct Rochester, NY magazine called Business Strategies.

Reading the large number of articles and blog posts recently that highlight all the differences in selling and marketing during a recession I thougt about this article ... and how its message is true during economic times both good and bad.

If you are working with/for a training firm that teaches some method or process on opportunity assessment or measuring against ideal opportunity criteria, I'd encourage you not to be the cobblers kid and not use your own 'stuff.' However if you don't have something like that in your arsenal give this a quick read - and if you need to intro to a firm that focuses on opportunity assessments in their methodology let me know.

For those of you looking to jump to the end ...

In through the out door (or using the exit as your entry)

tcbmartin@gmail.com (Administrator) — Tue, 10 Mar 2009 00:59:55 +0000

Those of you that know me well might think my title was a clever way of slipping a rock album title¹ into my blog. This time it wasn’t, as I don’t actually love this band, but someday I will write “Everything I Needed to Know in Business I Learned from Hard Rock.” But I digress…

The real focus of this post is discussing “Exit Strategies.” For all small businesses (which generally covers 99.9% of the sales training firms in the world) the Exit Strategy should really be the first strategy defined before the rest of the business planning and strategy work is done.

Opportunity Assessment Approaches

tcbmartin@gmail.com (Administrator) — Sun, 15 Feb 2009 00:55:45 +0000

Over the years there have been a number of consulting and training firms who have provided ways of assessing opportunities. For the benefit of my readers who don't have an Opportunity Assessment approach in their methodology I pass these along and encourage you to have a standard Opportunity Assessment process for use by your salespeople ... it's one way to prevent them from pursuing too many unwinnable deals.

Fundamental Questions for Business Evaluation

Is it Real?
Can We Win?
Is it Worth it?

- Don Schrello, 1974, Product Evaluation and Planning Seminar

Google Alerts - eyes in the back of your head

tcbmartin@gmail.com (Administrator) — Sat, 14 Feb 2009 01:00:58 +0000

Google Alerts is a fantastic, and free, resource to help you keep extra eyes on your prospects, clients, competitors … and even on how your own firm is being written about on the web.

I was initially hesitant to start using this tool because I am already overloaded with far too many blogs and email newsletters from assorted prospects and competitors however I gave this a 10 day test period and came away a believer.

If you are like me and already overloaded by data here are a few reasons why you might want to use Google Alerts (though as with most things, use this in moderation!):