Millions at Stake: True Cost of Delaying Sales Training

The Ripple Effect

Nobody has ever shown you the math of the problem you have created.

Until now.

Earlier this year, in May, I received an email from a Saas founder talking about how they want to wait for sales training until a new leader joins. First, I shook my head and smiled because it was a terrible mistake.

I see this often, especially with founders who have a sales team, hire the wrong head of sales, and want to wait for the new leader to come on board. Meanwhile, the goals and pressures on the sales team only increase and bad behaviors continue, become more ingrained, and harder to change later.

And of course, they are leaving tons of revenue on the table. In the meantime.

Here’s the math to prove my point.

The Immediate Consequences of Delay

Picture this:

• It’s May 1, 2023
• You fired your first head of sales per the average,16 months into their job on Wednesday April 26, 2023
• Your ACV, Annual Contract Value: $50,000
• Your Average Sales Cycle is 70 days.
• Your LTV, Lifetime Customer Value is 3 yrs. ($150,000)
• You are being on quota by 25% for the year.
• Your ICP (Ideal Customer Profile) is mid-market, SaaS organizations, targeting HR teams.
• Your board is coming down hard on results.
• You lie to yourself thinking hiring more bodies will increase sales
• You lie to yourself thinking you can manage the sales team as well as all your other CEO responsibilities.
• You lie to yourself thinking it will take less than 30 days to find and hire the new sales leader.
• You lie to yourself thinking it’s smart to delay the sales training until the new head of sales is onboard.
• You lie to yourself thinking you can get sales training started by mid-June with the new head of sales making the decision.

News Flash – You are wrong. Stop lying to yourself and everyone else with the start-up mentality of “doing more with less”. BTW, everyone knows you are full of it, they just are afraid to tell you in most cases.

Time Is of the Essence

You are right about one thing. Time is critical. Yet all your decisions are actually delaying meaningful action.

The cost of delaying sales training by even a few weeks will have specific revenue consequences with massive compounding interest over your company’s valuation.

Even with your false belief system of a June 1 hire date, training cannot occur in two weeks. we’re looking at the potential start date for a new VP of June 1. Then you are looking at July, and the holidays. So maybe you can start training by week of July 10, maybe.

Fill in the blank. Delaying sales training cost me _____.

The Double Edge Sword – The Economic Impact of Time

Each interview takes around 2 hours when you factor in preparation, the interview itself, internal post-interview discussions, negotiations with candidate, and then getting the offer letter out, etc.

Assume you conduct 5 interviews, and at an estimated rate of $250 per hour of your time, that’s $2,500 in hard costs. But let’s not forget the involvement of many others in your organization, which adds another +$7,500 to the bill.

Oh, and how is the sales team doing? How much further behind on quota are they? What is that, another 2-5 deals? That is another $100,000-$250,000 in short-term lost revenue, and $300,000 to $750,000 in long-term revenue, not to mention your short-term valuation because you probably need to get the next round of funding.

Fill in the blank. Delaying sales training cost me _____.

And then…

The First 30 Days of the VP

Once the VP is on board, the first 90 days are critical. It involves reviewing and redefining processes, assessing the team, and possibly providing some call coaching (if they are even capable yet). Then, if the VP wants to bring in external trainers, more time is consumed vetting the situation, meeting with stakeholders, requesting budgets, and getting approvals. Realistically, training might not even begin until Aug 1 if everything goes perfectly.

Fill in the blank. Delaying sales training cost me _____.

The Sales Cycle Reality

If your sales cycle is an average of 70 days. It probably means most of your sales are happening in 90 days, not less than 70. So that affects cash flow, expansion, growth, and valuations, etc.

Then, based on this timing, and the schedule of the trainer you choose, you may have to wait more so you are not conducting training at the end of the month or quarter. Again more revenue and valuation delays.

Fill in the blank. Delaying sales training cost me _____.

Goodbye Q2 and Q3. Hello Q4

Now, what if the CRO has a mandate to hire new salespeople, SDRs, Account Managers, and/or Customer Success? This adds an even further delay of training.

Now maybe you are looking at August or September?

Remember, this all started when you decided not to do training in May.

Fill in the blank. Delaying sales training cost me _______.

Morale Issues

Meanwhile, your current sales team continues to operate, possibly underperforming and experiencing morale issues due to a lack of adequate coaching and attention to their own deals which cost them money in their pocket and the company’s pocket (and valuation.).

And, oh yeah, they are probably looking to leave your organization.

Hello Interviewing Opportunity Costs.

Hello Brain Drain

Fill in the blank. Delaying sales training cost me _______.

Economic Impact Assessment

Now, let’s assess the economic impact of this delay.

• Assume your average sales cycle is 70 days, with an Annual Recurring Revenue (ARR) of $50,000, and a customer’s Lifetime Value (LTV) extending beyond three years.
• Each new customer contributes a minimum of $150,000 to your organization over their lifetime.
• Each new customer increases your current valuation by $400,000? $500,000
• Each sales rep is expected to close at least two new customers quarterly, and right now it may be 1.5 customers quarterly.
• Now, with training in June, each rep can close an additional 4-6 deals by the end of the year, that’s $150,000-$300,000 in short term revenue gains, plus an increase of millions in valuation.

So, because you delayed training in May, you just left all this money on the table.

All of this has a high chance of NOT happening if you wait too long to execute on formal training. Now, let’s look at the flip side.

The Real Numbers

This is merely an example, and if you feel the numbers are off, feel free. Just remember, every moment you spend telling me my numbers are off is time you are not spending on actually making money. And let’s face it. Even if my numbers are off by 50%, that still means you have to explain to your board why you didn’t get the 50% that represents your actual business.

The Red Pill or the Blue Pill

We all have choices.

You have a choice: You can press pause on training and feel your ripple effect in a few months, or you can invest now.

Training is not that expensive. I have seen programs from $10,000 to $100,000. The key isn’t the cost of the training. The keys to choosing a good sales trainer are:

1. Is the training customized with real play and role-playing? (Yes ours is 100% customized)
2. Can the trainer match your company’s culture? (Yes, we get multi-generation sales teams)
3. Can the training be effective immediately? (Ours works that very day)
4. Is there reinforcement after the training? (Yes, ours has manager and sales rep reinforcement)
5. Do you have to rip and replace a current sales model or process (No, we don’t believe in Rip and Replace)

To explore how our sales training programs can make a difference, visit The Harris Consulting Group or shoot me an email or LinkedIn chat, I will be here to help advise you on what is best.