Employees are one of the primary reasons for success in distribution, but training programs and budgets often do not reflect their importance. This article, based on the results of a recent Real Results Marketing survey, looks at why the gap exists and how distributors can shift their thinking about training.
When distributors talk about assets, often they are referring to “hard assets” such as inventory or warehouse infrastructure. But what about people?
The world of distribution is changing rapidly. Margins are eroding, small distributors are being acquired by larger distributors and new transactional channels keep being introduced. More people want to conduct business online, limiting the amount of interpersonal face time with employees. In this new reality, employee assets become even more important as strategic tools to help grow profitability.
Employees are one of the primary reasons for success in distribution, because they represent and communicate the company values and benefits to customers.
Distributors recognize the value of good employees, and they recognize the need to invest in development and training, but is the training that is being provided what’s needed to do their jobs effectively? And is it enough to help them develop into tomorrow’s leaders?
The skills training gap
In a recent survey from Real Results Marketing, distributors were asked about the training they provided customer-facing employees and how it related to their specific responsibilities. A majority of respondents said that product training was the most frequently offered, followed by general selling, vendor product, customer service and systems training. (See Figure 1.)
While these types of training are valuable in enabling employees to perform in their role – and are especially important to the newer employee – other types of training, such as leadership, negotiation and time management, typically fall to the bottom of the priority list. At the same time, leadership development is commonly listed as one of the top concerns for distributors, as seen in the “2016 CEO Challenge” from The Conference Board.
These types of training can enable employees to make greater strides in their current roles, which, in turn, help grow customer relationships and loyalty. The next generation of employees wants to grow with a company, but that requires investment in their growth.
When employees feel empowered with the skills to affect customer relationships in a more strategic way, they are more satisfied with their jobs and themselves, which translate to greater customer satisfaction.
The days of making the field salesperson “milk run” are over. Customers want relationships that will truly add value to their operations. In many cases, this means understanding their business and providing solutions to help them improve their business, through cost savings or efficiency gains. This type of relationship cannot be developed only through product knowledge. Salespeople must develop other skills to enable them to meet changing customer needs. So why is the majority of training still focused on product and general selling and service skills, rather than focused on building those specific skills needed to build customer loyalty?
Internal vs. external training
Training in general, although perceived as valuable, is not always perceived as effective by the distributors we spoke with in conjunction with the survey. This is because most training is not measured or the effectiveness tracked. The effectiveness of internal training, in particular, can be difficult to assess because of a lack of formal structure or benchmarks for comparison.
The most popular method of sales training was on-the-job training, with 83 percent of respondents noting it as the preferred method. This was followed by side-by-side training (74 percent). Typically, these
training methods do not follow a set program, instead driven by the veteran employee providing the example.
If implemented properly, on-the-job training can be very effective. But often the training is simply demonstrated (as in the case of systems) or verbalized, without any documentation or follow-up. Trainees are then left to sink or swim and must use trial and error to learn. This can lead to higher employee dissatisfaction and turnover, which can impact customer satisfaction.
Learning management systems provide a more systematic way to present and follow up on training for employees. These systems (e.g., Litmos, Docebo, Bridge) can be structured to enable tracking and reporting and provide tools for retention, such as testing and follow-up courses. Some learning management systems can also incorporate different methods of training, such as gaming, which applies game design thinking to the learning program to engage users in a different way.
Many larger manufacturers have chosen to use learning management systems for their product training programs and have designed portals for distributors to access employee training. However, when respondents were asked if they had an internal LMS, only 22 percent said yes.
LMS are pricy and require a commitment to usage. And often, training budgets are not robust.
Internal training costs can be difficult to track and quantify, as they are often incorporated into the daily costs of doing business. But when asked how much of the annual training budget was spent on third-party training by role, many respondents allocated no budget dollars for many business roles. (See Figure 2.)
Distributors were more willing to budget for third-party training for field sales than any other job function, with 46 percent of respondents saying that they spend more than $1,000 annually. But at the same time, 22 percent of respondents said they had no budget allocated for third-party training of field sales.
Closing the gap between the perceived value of training and the true effectiveness of it is crucial for building an effective team. And it requires a focus on providing the best tools to employees across the board.
Debbie Paul is a partner at Real Results Marketing and previously was vice president of call centers at Newark, an electronics distributor. Contact her at email@example.com or visit www.realresultsmarketing.com.
MDM Editor Jenel Stelton-Holtmeier contributed to this report.