In part 1 of our series assessing the return on investment (ROI) of writing skills development, we looked at how to calculate the ROI of faster writing. There, we found significant returns: training 10 sales managers (in our sample scenario) so they could write faster ultimately resulted in 1,233% ROI just from the time and labor savings.
But we also noted in that article that faster writing is not the only form of ROI. Better writing itself will produce better business outcomes if it can result in more sales. But how do we calculate that ROI?
From here, we can look at the impact of good writing from several directions.
- We can focus on increasing the leads generated. Marketing materials, such as email and inbound marketing, conference presentations, industry reports, and more are all avenues through which writing can affect how many inquiries a business gets. More leads, obviously translate into more sales.
- We could also look at increasing the conversion rate. Written content such as sales presentations and proposals directly affect conversion, so the skill of the writers can potentially make a huge difference. For example, if writers learn how to express the core value proposition and make an effective call to action in a sales proposal, they can tangibly increase their conversion rate more effectively.
- Finally, we could look at opening up more time to focus on sales. In our discussion of the ROI of speedier writing, we pointed out that sales managers who write faster will have more time to focus on generating sales.
With that as our starting point, let’s start calculating the ROI of better writing.
- Step 1. Determine the cost of the training. First, we need to know the number of people to be trained. Again, we’re going to assume a class of 10 sales staff or managers. The cost of training can vary significantly, so always inquire, but the Association for Talent Development’s State of the Industry Report suggests an average annual training cost per employee of $1,252.
Step 2. Determine the value of a sale. Let’s use an easy example. Say that a business sells box trucks – the kind used by delivery or junk hauling services. New medium-duty Class 4 box trucks cost between $35,000 and $50,000. If the average sale consists of two trucks, let’s say the average value of a new sale for our example business is $80,000.
Note that we could also look at this question from a Customer Lifetime Value approach: if the average customer buys 8 trucks over the course of the relationship, that customer is actually worth a total of $320,000. That would mean an even greater ROI.
- Step 3. Determine how much time it takes a salesperson to make a sale. Since this is a business-to-business sales process, rather than consumer-focused, sales staff probably take more time finding leads, making sales calls, building relationships, etc. Let’s estimate it takes 160 hours (a full month) per sale.
- Step 4. Determine how many more sales the sales team can make. Remember that faster writing opened up five new hours for each salesperson each week. Let’s round out to 250 hours per year per person. That’s equivalent to 1.56 additional sales per person per year, or 15.6 additional sales for the whole team.
- Step 5. Calculate the value of the additional sales. This step is easy: 15.6 sales at $80,000 per average sale equals $1,248,000 in new annual sales for the whole team.
- Step 6. Now let’s get at the direct ROI of more sales. If we’ve spent $12,520 to train those salespeople to produce $1.2 million in new sales, then we’ve generated 9,968% ROI over our initial investment. And that’s just from having more time to make more sales!
Now it’s your turn: we did our best to use reasonable numbers, but your business is unique, so you’ll need to adjust the figures appropriately. If you’d like help figuring out the ROI, please reach out for more information – we can help you figure out the right numbers for your specific situation.