Training Retail Employees: What Is Your ROI?

ROI retail sales training“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 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 twenty hours to train a salesperson, and you're paying them ten dollars per hour, you'll be into the training for about two-hundred dollars. With a modest twenty percent increase in sales after training, a salesperson who made ten sales a week will now be making twelve. At fifty dollars per sale, that puts your payoff time at about two weeks.

That leaves you fifty weeks of added profits that would add up to over five-thousand dollars 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 twenty hours a week at ten dollars per hour, will still put you out about two-hundred dollars for training. Using the same rough numbers from above, you should be able to expect their sales numbers rise from five to six per week.

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

That's an eleven-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 two-hundred dollar expense, you'll only have paid something like $145. It's also not unreasonable to expect your commissioned sales people to be performing at a higher level to begin with. For those who live by their sales, let's again assume a low fifteen weekly sales.

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

In the remaining fifty-one weeks, you'll make nearly eight-thousand dollars 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.

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