Calculating the ROI of call coaching for your sales team seems hard to pin down at first.
But it’s actually incredibly simple, and you may be surprised at just how lucrative call coaching can be.
Where you might go wrong in your attempt to calculate ROI is by trying to tie it nebulous outcomes that have too many root causes like close rate increases, sales cycle length decreases, etc.
But the ROI of call coaching is all about one thing: quota attainment.
It comes down to pulling two levers:
- Improving quota attainment of your A-Players (say, the top 20% of your team)
- Improving quota attainment of your B-Players (the other 80%)
While your A-Players (say, the top 20% of your team) attain or exceed their quota every month, your B-Players (the other 80%) are struggling to hit their number.
Using call coaching to increase the quota attainment of your B-Players, even marginally, can have a substantial effect on your team’s overall performance and the company’s bottom line.
This improvement to your overall revenue number gives you the ROI of your call coaching investment.
Here’s how you calculate it.
Step 1: Map Out Your Team
Write down how many account executives you have, along with their annual quota.
I’ll follow along with an example scenario:
- 30 account executives
- $600,000 annual quota per rep
- $18M annual quota for the team
Step 2: Set the Baseline for Your “A-Players”
Next, write down the percentage of your team that are “A-Players,” and what the average quota attainment is for each of them.
Following along with the example, here’s what you have:
- 10% of your team can be dubbed “A-Players” (3 out of 30 reps)
- Your A-Players attain 130% of quota on average
That means each A-Player generates $780,000 in revenue per year.
In total, you have $2,340,000 in annual revenue from the A-Players.
Step 3: Set the Baseline for Your “B-Players”
Next, do the same thing for your “B-Players.”
Write down the percentage of your team that are “B-Players” and what the average quota attainment is for each of them.
Following along with the example:
- 90% of the team can be dubbed “B-Players” (27 out of 30 reps)
- The B-Players attain 80% of quota on average
That means each B-Player generates $480,000 in revenue per year.
In total, we have $12,960,000 in annual revenue from the B-Players ($480k * 27 reps).
That means your annual team revenue (both the A-Players and B-Players) to $15,300,000.
Step 4: Pull ROI Lever #1
Like I said at the beginning, we have two levers to pull here:
- Improving the quota attainment of your A-Player group
- Improving the quota attainment of your B-Player group
There isn’t going to be much leverage in lever number one.
The benefit of coaching your A-Players has more to do with retaining them as employees than improving their performance.
A professional golfer, for example, will practice for 10 hours a day for a year just to shave a single stroke from their 18-hole game.
So let’s say we improve our A-Players by a mere 2%:
2% of $2,340,000 (the total baseline revenue our A-Player group generates per year) is $46,800.
Not bad, but nothing to write home about.
Step 5: Pull ROI Lever #2
Here’s where the leverage is.
Improving the quota attainment of your B-Player group is where the big ROI lives.
This group has tons of room for improvement, and you have many more B-Players than you do A-Players.
So let’s say you improve your B-Players by 10%, which is a reasonable number:
10% of the $15,300,000 (the total baseline revenue our B-Player group generates per year) is a whopping $1,296,000.
Step 5: Calculate Your Sales Call Coaching ROI
Finally, combine the additional revenue from both your A-Players and B-Players.
Our example looks like this:
- 1% improvement from A-Players: $46,800
- 10% improvement from B-Players: $1,296,000
- Total: $1,319,400
Divide that number by what you spent on a call coaching platform, and you have your ROI multiple.
If you spent $50,000, you’re left with an ROI multiple of 26.388x.
If you spent $30,000, you’re left with an ROI multiple of 43.98x.
And so on.
Conclusion: Call Coaching Has Massive ROI
There’s a reason sales teams have the budgets they do:
Most of their spending generates a handsome return on investment.
The more reps you have, and the more room for improvement they have, the stronger the potential for generating ROI via call coaching.
However, there is also another ROI lever we didn’t talk about here:
When you are growing sales headcount fast, the ROI of ramping new hires is a totally different story.
Learn more about that ROI calculation here: