Internal or External? The Sales Training Debate

When your sales organization needs training, whom do you call – your internal training organization? Or an outside firm? For the vast majority of companies, it’s the former – a whopping 70 percent of sales training in the U.S. is conducted by internal resources. Yet, companies employing an external sales training vendor generally yield a higher degree of effectiveness from their training than those employing internal-only training. That’s one of the key findings in ES Research Group’s 2008 Sales Training Vendor Guide, an annual study that independently assesses the nation’s leading sales training providers.

“Too many companies depend only on internal training,” observes Dave Stein, CEO of ES Research Group. “That’s great for product training, but when it comes to sales skills – basic skills, advanced skills, sales management – we feel companies are best served by hiring an outside vendor.”

The statistics are compelling: in organizations that use outside training resources and empirically measure results, more than 90 percent report increases of 40 percent or more in key sales performance metrics (average deal size, close ratio, reduction in time to close, etc.). Compare that with 90 percent of organizations that either do not have a formal measurement program or do not use outside resources: they estimate only 10 percent to 20 percent performance improvement. “The message is clear,” concludes Stein: “External sales training providers, coupled with a formal performance measurement program, yield significant increases in revenue.”

So why are external training vendors so much more effective when it comes to sales-specific training? Stein believes there are five reasons:

Sales methodology. Methodology is the foundation of any good sales training program. But it’s a complex science. Few internal trainers understand the intricacies of it, while sales training vendors tend to be very knowledgeable in this area.

Instructional design. The way in which instructional materials are designed, sequenced, and presented is crucial. “Programs must be designed using specific learning models to meet the needs of various learning types that participate in the programs,” says Stein. Just because your internal trainers are good instructors doesn’t necessarily mean they are good instructional designers.

Facilitator presentation experience. Effective classroom facilitation requires constant practice to do it well. This is often difficult for internal trainers who may not have the constant training load of a professional sales training firm.

Facilitator professional experience. Many sales training vendors hire former sales professionals as facilitators. Thus, they have a wealth of experience and “war stories” on which to draw as they facilitate. “Your internal trainers may be very strong in the technical aspects of training, but they don’t have that anecdotal experience that is so important to salespeople,” says Stein.

Tools and technology. Sales training must go beyond classroom learning to include evaluation and measurement models, experience and knowledge of change management processes, e-learning tools, and more. Many sales training firms can either deliver or are poised to deliver these capabilities.

Stein acknowledges that many companies balk at the cost of hiring an external training vendor, but he points out the out-of-pocket investment in an outside vendor is a small fraction of the total cost of training and the benefits are significant.

“We’ve had an inkling” about the internal vs. external training issue for a while, concludes Stein, but “this is the first time we’re asking questions.” He cautions that his findings are not the result of a dedicated study, but rather the result of many interviews with end-users and vendors. ES Research Group plans to do a formal study on internal vs. external training in 2008.

To purchase a copy of the Sales Training Vendor Guide, visit www.esresearch.com/results