An Introduction to the 'T' Method

• Sales employee Turnover due to low appointment activity (30)
• Percent of sales reps at or above Quota (70%)

First, calculate your 'sub-par' average revenue. This number reflects the average monthly revenue a new-hire achieves before they achieve quota attainment.
As an example, if your current Average Ramp-to-Quota is 5 months, take the average total Revenue sold in the first 4 months of a new hires routine and divide it by 4. That will give you the average 'Sub-Quota' Revenue per Month during Ramp.
In this example, we will use $8,000 as the average 'sub-par' revenue.

One of the overall training objectives could be to improve the New-hire Ramp-to-Quota. So you consider the training result and impact as it relates to revenue recovery by selecting a ramp-to-quota goal that's more efficient than the 'status quo' of 5 months. In this case a 1 month ramp-to-quota reduction would recover $595,000 in additional new sales. That equates to $17,000 per new-hire. And if you have determined that the performance training Cost-per-head is $2500, there's your internal training ROI; 680%.
And we're not done yet.

You have defined that 30 sales reps per year go out the door directly related to low activity, not setting enough new business appointments to justify the required revenue result.

Let's take a closer look at it pertains to related costs and potential recovery. Here are your expense breakdowns relating to a new-hire sales rep:

• Average Salary: $28,000
• Recruiting Costs: $1,200
• Training Costs per Rep: $2500
• Monthly Sales Quota: $25,000

If the focused KPI training initiative reduces your sales rep turnover by 50% (15 reps), that recovers $1,953,500 in measurable dollars, something everyone can actually put their finger on.
That's over $130,000 of real return for every rep that learns how to effectively set new business appointments.

Considering this cause and circumstance versus the realistic training benefit as a ROI factor, you choose Option 1 to establish a Prospecting Methodology across all sales regions. And in this case, that also justifies the training investment to the "Top-floor'.

In the 3rd Vertical Sales Performance 'Impact Silo' we determined that an average of 70% of the sales reps are achieving quota per month. And the average month 'sub-quota' revenue achieved for the 30% of reps not reaching quota is found to be $16,000.
We also determined the average new appointments generated per week is (5), but
by improving the 1st appointment to proposal ratio by 10% and the closing ratio by 10% we would achieve Quota consistently.
Next, let's determine our Return on Training Investment if we meet our training objective of improving the 70% team Quota 'water-mark' up to 90%.

• 1st Appointment to Proposal ratio (Improve to 70%)
• Closing ratio (Improve to 50%)
• Average Revenue per Sale ($3500)
• Sales cycle (38 Days)
• Average New appointments generated (5)
• 100 sales reps

Implementing a focused performance improvement system to advance our middle KPI's in supporting an additional 20 sales reps per month to achieve Quota would increase our monthly revenue results by $180,000.
That's an annual return of $2,160,000 or a training ROI of 864% based on a $2500 cost-per-head training investment. And with a 38-day sales cycle, the training investment 'break-even' point would be approximately 80 days.

Because of this cause and circumstance versus the realistic training benefit as a ROI factor, you choose Option 2 to establish a 'Business acumen' sales methodology, develop supporting diagnostic tools to establish financial business metrics parallel to your prospect's initiatives and your product/service solution.

Adopting this 'T' method to sales performance training will allow you to determine the shortest path to your revenue goals, determine and implement 'Best Practice' sales performance training and justify the training investment to the "Top-floor'.

Because at the end of the day... it's all about Return on Investment.

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