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Sales Productivity: How Much Should a Sales Initiative Cost

Sales Productivity: How Much Should a Sales Initiative Cost

Categories: Sales Productivity

Determining the budget line item for a sales initiative can be difficult until you start talking to vendors. There are a multitude of sales consultants out there with prices that vary just as much. Once you determine the key knowledge gaps you're trying to fill in your organization or the challenges you're trying to overcome, then it's time to connect with the right solution for your budget and pain points.

Can Your Execution Gaps Wait Another Quarter?

It's difficult to write a blog and identify exactly how much a sales initiative will cost for your organization because there are a number of factors that impact your line items. Remember, as with anything, a sales initiative is an investment that's based on needs.

You've got numbers to hit. If the business implications of your current challenges are worth a top-dollar investment, it behooves you as an organization to write the check. If they're worth more of a skills training or lower cost investment, then you need to allocate funds where it makes sense. The last thing you want to do is to spend money where you won't see results.

Calculating Your Cost of Initiative

So, when sales leaders ask us, "how much should a sales initiative cost?". We often walk them through a quick assessment that gives them a ballpark number for their organization. We've outlined some of the components in this blog to get you thinking about your own organization and the type of initiative you're looking to launch. Using these inputs will help you find the right partner to execute your plan.

1. What type of initiative you need?

Before you jump the gun, define and align on the right next steps to driving sales growth. The questions below along with this rapid sales assessment may help you prioritize where to start.

  • Is this a rep-level training?
  • Will it include manager training?
  • Are you training them on a new product?
  • Are you restructuring your sales process?
  • How much alignment with other functions in your organization is required?

2. What metrics that will indicate success for your organization?

What benchmarks are a top priority/concern for you and your executive leadership team? What will have the biggest impact on your company's growth goals?

  • Average Deal Size
  • Annual Contract Value
  • MRR/ARR
  • Customer Retention
  • Seller Ramp-Up Time
  • Increase in Pipeline
  • Deal Margin
  • Average sales cycle
  • Win rates
  • Pipeline health
  • Revenue forecasting accuracy
  • Time to productivity
  • Revenue per sales rep
  • Cost of sales
  • Quota attainment

3. What level of organizational transformation do you need to achieve?

As you assess your challenges and the metrics you want to impact consider, what do you think would be the best solution to your sales organization's complex challenges? 

  • A sales fundamentals training for new reps?
  • A training customized to your company and buyers?
  • Complete overhaul of sales organization?
  • “Draft-in” initiative that aligns with other organizational priorities?
  • A true consulting engagement that plans for adoption and reinforcement for both the short and long-term?

4. What else may impact cost?

The cost of a sales consulting initiative can be wide-ranging. Depending on your company size and the problems you're solving, it can range from $50K all the way to $2M+. The key to nailing down the cost is to determine the inputs to the initiative. There are several components that influence the cost both up and down, including:

  • Sales Reps
  • Types of Sales Reps (Enterprise, Inside, ADR, etc…)
  • Managers
  • Buyer types
  • Geographies for Roll-out (EMEA, APAC, etc..)

Use the inputs above as a way to define the scope for your initiative to increase sales productivity. Thinking through these items in advance will help make your consulting company search easier because you'll be able to better match them with your defined your requirements for success.

5. What has worked well for companies similar to yours?

Finally, assess how companies similar to your size or those facing similar challenges solved their complex sales productivity issues. See the results they achieved and how they enabled their team to succeed.

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