Training Retail Employees: What Is Your ROI?

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“What if I train my retail employees, and then they leave?”

It seems like every time I hear from a manager who’s trying to talk themselves out of retail sales training, they come around to this line of thinking. They’re afraid of spending the time and money to train their employees, just to have the employee leave a few weeks or months later.

On its face, that seems like a valid concern. You certainly don’t want to invest a lot of money in short-term employees. However, that thinking is flawed, and overlooks a far more important question…

“What if you don’t train them, and they stay?”

Whether they’re with you for a week or a lifetime, your salespeople are the public face of your business. They interact with your customers every day. Every person who walks into your store will leave with whatever impressions your employees give them—and they’ll share those impressions with everyone they know.

You know all of that… I hope.

Do you believe that foregoing retail sales training will save you money in the long run?

The problem a lot of people have is that they look at retail sales training as an expense. You don't calculate the ROI of an expense, you just pay it.

Retail sales training is and must be viewed as, an investment in the long-term prosperity of your business.

There are a huge number of factors that can go into your sales training ROI calculation. For now, let's keep it simple. We'll take your cost of training and subtract it from what you can expect your salesperson to make after training.

Full-Time Employee ROI

Assuming that it takes about 20 hours to train a salesperson, and you're paying them $10 per hour, you'll be into the training for about $200. With a modest 20 percent increase in sales after training, a salesperson who made 10 sales a week will now be making 12. At $50 per sale, that puts your payoff time at about two weeks.

That leaves 50 weeks of added profits that add up to over $5000 in the first year.

And all of that is based on a minimal training investment with a modest return. Studies have shown that higher investments in training will yield higher returns.

Part-Time Employee ROI

A part-time employee - working 20 hours a week at $10 per hour - will still put you out about $200 for training. Using the same rough numbers from above, you should be able to expect their sales numbers to rise from five to six per week.

That puts your training payoff time about a month out and leaves you 11 months to profit from the increased sales.

That's an 11-fold return on your investment in the first year alone.

Commissioned Sales ROI

Many commissioned employees are paid a minimum wage during training. This can give you a little more bang for your buck when it comes to retail sales training. Since your initial investment is lower, you can reasonably expect your ROI to be higher.

Instead of starting off with a $200 expense, you'll only have paid something like $145. It's also not unreasonable to expect your commissioned salespeople to be performing at a higher level, to begin with. For those who live by their sales, let's again assume a low 15 weekly sales.

After training, a 20-percent increase would put that figure at 18 - or, an extra $150 per week. The first week after training, your program will have paid for itself, and then some.

In the remaining 51 weeks, you'll make nearly $8000 in additional sales!

That's not bad for an initial investment of less than $150.

If you sell furniture or other large ticket items, of course, your dollar per sale would be much higher. Likewise, if you sold 10x as many items in a week, your numbers would also be higher. Don't get caught up on the example, plug in your own numbers to see what you reasonably could expect.

And don't forget to factor in the higher returns, replacements, and discounts untrained employees often bring to your sales.

In Sum

Retail sales training is the most profitable ROI you can make besides owning your own building. The key is to challenge your assumptions that training is an expense, not an income generator.

Change your thinking, train your employees and you’ll discover the ROI for all your employees can’t be beat.