1. Return on
Investment
(ROI) in Sales
Effectiveness
WHITE PAPER

2. Share this White Paper! Copyright ©TheTAS Group. All rights reserved. 1
CRITICAL SUCCESS FACTORS
Before you assess the likely ROI on a sales effectiveness
project, you need to be sure what success looks like for the
project, because your ROI model will need to reflect the
success metrics to use. Critical Success Factors, or‘CSFs’, are
the metrics against which you judge the efficacy of initiatives
designed to address your business drivers (see the section
on Project Goals inTheTAS Group’sWhite Paper called
AutomatingYour Sales Performance – Build or Buy?).
Return on Investment (ROI)
in Sales Effectiveness
INTRODUCTION
Few major business investment decisions are made
without an attempt to assess the likely business results
of the venture. With a range of projects competing for
limited time and money, many businesses look to rank-
order the candidates, using a wide range of financial,
legislative, emotional, political or other factors to
help them. It is unlikely that financial factors will not
be taken into account. When they are taken into
account, often the number you end up with can look
disappointingly low, or else so enormous it stretches
credibility.
The options open to the business decision-maker
on the financial front are numerous, most of which
attempt to measure the‘time value of money’. Typical
examples of this might be Internal Rate of Return (‘IRR’)
or Net PresentValue (‘NPV’) for projects. Total Cost of
Ownership (‘TCO’) can be used when the return, or
revenues, can be hard to define, such as in IT security
when you are protecting the business against threats
to your business continuity. TCO is also a useful ally in a
‘build or buy’technology decision (seeTheTAS Group’s
White Paper called AutomatingYour Sales Performance
– Build or Buy?).
ThisWhite Paper concerns itself with Return on
Investment (‘ROI’), which www.wikipedia.org defines
as‘the ratio of money gained or lost (whether realized
or unrealized) on an investment relative to the
amount of money invested.’ ROI is usually expressed
as a percentage, but can also be described in time,
the period by which payback on the investment is
achieved. In thisWhite Paper we shall explore some of
the key facets to assessing ROI on a sales effectiveness
investment. We shall also offer two possible ways of
arriving at an expected ROI figure, one simpler, one
more involved, but both of which focus the reader on
the key levers that affect sales performance.
As with any of ourWhite Papers, there will be a
big variance in the seniority and experience of
the readership. ThisWhite Paper aims to provide
something for the complete range of requirements,
but if you want to dig deeper or move wider, we urge
you to get in touch with us individually. You can do this
via email to: info@thetasgroup.com.
Dealmaker fromTheTAS Group solves three business drivers
for our customers:
• My revenue falls short of potential
• My forecast isn’t accurate
• I’m not seeing lasting return on my sales training
investment

3. Share this White Paper! Copyright ©TheTAS Group. All rights reserved. 2
Some example measures include:
Qualitative (behavior) Internal
• Increase in pipeline quality
• Level of Relationship
• Linkage to your Initiatives
• Penetration and coverage in pipeline
Qualitative (behavior) External
• Linkage of solutions to business
• Initiatives
• Value propositions
• Relationships with key players
• Leveraging resources and partners
Quantitative (results) Internal
• Account penetration, coverage and pipeline value
• Account retention
• Wallet-share
• Win rate and productivity
• Competitive encroachment
Quantitative (results) External
• ROI realized by the account
• Incremental revenue
• Cost savings
• Additional profit
• Competitive Advantage
It follows that if you successfully meet the CSFs, you will
achieve the ROI that you have modeled for your project.
Based onTheTAS Group’s experience of work with over
850,000 sales people and leaders, we make the following
recommendations for a sales effectiveness program:
1. Easy to use for the sales team
2. Effective learning must be tested
3. Preparation and alignment sessions must be
completed from the executive team down
4. Clear communication from the leadership concerning
objectives and expectations
5. Measure usage and results
6. Sales management must manage and coach to the
process and methodology
7. Process and methodology must be integrated and
aligned to the CRM system
8. Best practices and approach must be proactively
reinforced by management and the supporting tools
When it comes to measuring your CSFs there is a wide
spectrum of metrics to choose from. TheTAS Group works
with customers to identify key performance indicators as
part of a proposed project, to ensure the desired behaviors
and actions take place within the sales organization. Metrics
can be identified as internal to the customer and external
from the customer and can be categorized as qualitative or
quantitative.

4. Share this White Paper! Copyright ©TheTAS Group. All rights reserved. 3
Then for the period after the sales effectiveness project has
been established, you need to set targets against which you
can measure the effectiveness of the project. We recommend
the following metrics:
• Target net recurring revenues for subsequent quarters
• Percentage change (if any) in the total quota (it is
helpful for you to know how much greater the total
quota figure is over the plan, because then you can
measure true quota uplift)
• Target uplift in number of qualified opportunities
being worked on
• Target uplift in average deal size (recurring amount
only)
• Target uplift in percentage close rate for the qualified
opportunities
• Target reduction in average sales cycle length
• Target number of quota-bearing heads
For guidance, reasonable targets for number of deals, deal
size, close rate and sales cycle length, are in the 5-10% range.
Some of the figures above are interdependent, so when you
come to do the calculations there are some useful sanity
checks built in.
Furthermore, for you to gauge true ROI and effectiveness, you
need to get a sense of your own internal costs as well, apart
from those which you pay out to your sales effectiveness
vendor. The following pre-project information completes the
picture:
• Average operating margin
• Percentage of business which is recurring (as opposed
to one time business such as set-up or services)
• Average retention rate on recurring revenue
• Your internal costs for supporting the sales
effectiveness system (typically administration or IT
department time)
DOINGTHE HOMEWORK
Calculating ROI and then assessing actual return against
anticipated return requires discipline from both you – the
customer – and your sales effectiveness vendor. This
is a partnership that should be born well before the
project commences and continue through the life of the
project. Otherwise you will not be able to judge the true
return on your investment over time. Some independent
commentators argue that you should not involve a vendor in
helping you calculate the likely ROI of a project that they will
be delivering, and it is easy to see how a conflict of interest
might skew the results. It is more a question of the trust
between the two parties, whether your consultant is aTrusted
Advisor to you. It is also a question of basing your calculations
on factors that are completely vendor-agnostic, and therefore
objective.
Before you start to calculate the ROI, you need to know how
your business currently stands along some key parameters.
Furthermore, after you have invested and the project is
underway, you must be prepared to regularly take the same
measurements so that you have ongoing concrete insight
into performance against target.
These are the recommended‘pre-project’numbers so you can
set targets for the project and then measure the success. For
the immediately preceding quarter:
• Total net revenues (split between recurring and non-
recurring, depending on your business model)
• What percentage of plan were the revenues
• Average quota achievement by the sales force
• Total number of qualified opportunities worked on
during the period
• Average deal size (including one-time/services fees)
• Percentage close rate for the qualified opportunities
• Average sales cycle length
• Number of quota-bearing heads
Once you have these figures established, this forms your
‘steady state’. If you feel that the preceding quarter was
slightly anomalous, then you can mitigate this by getting
figures for the previous half year.

5. Share this White Paper! Copyright ©TheTAS Group. All rights reserved. 4
Similarly, when a company is focused on cost reduction, the
sales effectiveness disciplines could result in maintaining
the same velocity while reducing headcount. If the number
of #Deals is set to 75% as a consequence of sales force
reduction, and each of $Value and %Close are increased while
decreasing the Length of Sales Cycle by 10% – velocity can be
maintained and cost of sales can be reduced by at least 25%.
It’s worth exploring how a sales solution like Dealmaker can
positively affect the four key levers.
Increase the number of qualified deals
Successful selling organizations are not just working on the
deals that come their way. They are not just communicating
value, they are creating it for their customers. Dealmaker’s
Account Management methodology provides a framework
for planning, finding and creating more opportunities for
the customers. Conversely, Opportunity Management
methodology also ensures that you are only working on the
right opportunities, and this may mean reducing the number
if you never should be engaged on some deals in the first
place. It is far more productive to win 4 out of 7 deals, than 3
out of 10.
Dealmaker increases the number of qualified deals by:
• Profiling and analyzing the customer’s organization to
discover the areas of highest mutual value
• Creating and executing business development plans
• Effectively managing and supporting customers,
thereby locking out the competition
• Managing and winning more opportunities by
answering the critical questions
• Virtual learning environment to increase selling time
while learning and applying new concepts on-the-job
• On Demand analysis and reporting tools to point to
areas of missed or under-exploited opportunities
WHY AND HOW –
THE KEY ROI LEVERS
The greater your sales effectiveness after a project compared
to before, the quicker and greater your return on investment.
Sales effectiveness revolves around how quickly you can put
business through your sales organization, in other word your
sales velocity. The better your sales velocity after the project,
the faster you recoup your investment. TheTAS Group
invented the SalesVelocity Equation to help companies arrive
at this understanding.
The measure of that company’s sales effectiveness always
translates to revenue generated for a fixed or variable cost.
Whether a company is in growth mode, or in cost reduction
mode, this fact always remains constant.
In the SalesVelocity Equation, #Deals represents the number
of qualified sales opportunities being pursued, $Value
represents the average value of each sale, %Close represents
the ratio of deals won to qualified opportunities, and Length
of Sales Cycle is the length of time resources are being applied
to a sales opportunity before that opportunity is closed.
The level of revenue that is generated by any company in
any sales period is proportional to the number of deals or
qualified sales opportunities that are being worked; the value
of each sales opportunity; the percentage of those deals that
are closed; and inversely to the length of the sales cycle. You
can see that these numbers are what you have been advised
to find out in the previous section, prior to calculating your
ROI.
To increase sales effectiveness, a salesperson or team must
seek to increase the factors above the line, and decrease the
factor below the line. For example, for a growth oriented
company, the sales leadership might, with appropriate sales
effectiveness disciplines, be successful in increasing each of
the #Deals, $Value and %Close by 10%, and decreasing the
Length of Sales Cycle by 10%. This results in an increase in
velocity of 48% without any increase in headcount – which is
almost equivalent to adding half the number of salespeople
at no cost.
#Deals x $Value x %Close
Length of Sales Cycle
Sales
Velocity
10% 10% 10%
10%
+48%
110% x 110% x 110%
90%
= 148%
75% x 110% x 110%
90%
= 100%

6. Share this White Paper! Copyright ©TheTAS Group. All rights reserved. 5
• Uncovering the political landscape and aligning your
solution to the‘Inner Circle’
• Adopting the correct relationship strategies
• Encouraging sales people to follow a proven process to
keep deals on track
• Working on high value opportunities created with
customers where mutual value exists based on
business drivers and initiatives
• Automated leading indicators highlight exceptions
where intervention is required to manage‘at risk’
forecasted revenue
Shorten the sales cycle
Dealmaker’s proven ability to shorten sales cycles comes from
our sales process approach, which aligns your company’s sales
process with your customers’buying process for maximum
efficiency. Moreover, the Opportunity Management
methodology ensures that your team is working on deals they
can win, so less time is wasted on opportunities that shouldn’t
be in the funnel to begin with.
Dealmaker helps your sales team shorten the sales cycle
through:
• Consistent objective qualification framework to
identify real Opportunities with;
-- A Compelling Event and access to funds
-- Unique BusinessValue
-- Internal support and clear decision criteria
-- The optimum competitive strategy
-- Timely next best actions
• Aligning your customers’buying process to your selling
process
• Removing administrative overhead from your sales
people
• Virtual learning environment to reduce training time
versus face-to-face sessions, giving you a shorter time
to positively impacting revenue
• On Demand tools built into daily workflow for instant
guidance
Increase the deal size
In a world where deals are scarcer than ever, you not only
have to win as many as possible, but maximize each one.
Dealmaker’s Opportunity Management methodology
ensures that each specific opportunity is fully aligned with
your customers’needs so that you can bring every applicable
product and service to bear. Likewise, Dealmaker’s Account
Management capability focuses on maximizing account
penetration, guiding sales people to develop as large a
footprint in each account as possible.
Dealmaker increases deal size by:
• Clear articulation of Unique BusinessValue helps to
take value into the negotiation room
• Segmentation of customers to focus on high value
business units and opportunities
• Mapping key initiatives and all critical success factors to
broaden solution range
• White space analysis to uncover and expose new areas
of potential revenue
• Leverage and maximize marketing and partner
resource to optimize coverage and route to market
• Generate clear objectives, strategies and actions across
the entire Account team, available on demand to
increase visibility and collaboration
Increase the win rate
Research shows that companies that integrate sales
methodology and process into their CRM system improve
qualified opportunity close rate by 20%, and sales proposal
close rate by 155% (TheTAS Group Global Sales Effectiveness
Benchmark Study, 2007-2009). Dealmaker not only
accomplishes this integration, but does so without the need
for code-writing or heavy CRM customization.
Dealmaker improves your win rate by:
• Highlighting weakness in opportunity strategy and
providing a coaching mechanism to effectively test
and review

7. Share this White Paper! Copyright ©TheTAS Group. All rights reserved. 6
A SIMPLER ROI CALCULATION
Armed with your sales numbers, your costs and the quoted
3rd party costs of your sales effectiveness vendor, you are now
ready to calculate the ROI based on your expectations for the
project. Calculating ROI is not an absolute science, but one of
degree, and this depends to what detail you want to go into
for your analysis. TheTAS Group recommends ROI calculators
with varying complexity, and your choice will depend on
which is more appropriate for you.
We stress that both calculators have no in-built bias towards
TheTAS Group. They are simply a function of your current
business situation, your targeted improvement, your
underlying costs and the costs due to the vendor.
The less involved ROI calculation is shown here, complete with
some example numbers. This version first takes your average
deal size, your operating margin, your revenue splits between
recurring and non-recurring type, your retention on recurring
revenue, the number of quota-bearing sales people and their
expected number of deals. It then looks for your target input
on the other 3 levers of the SalesVelocity Equation, namely,
the length of the sales cycle, the win rate or close percentage,
and the average deal size. Factor in the costs to the vendor,
in terms of license fees, number of licenses, integration
costs, services, and you own internal costs to administer the
solution, and you can then compute your anticipated return.
A representative fromTheTAS Group can talk to you about
ROI, share with you a copy of this calculator, and work with
you to uncover your goals and calculate the ROI of your sales
effectiveness investment.
SummarySectionfromthesimplerROICalculation

8. Share this White Paper! Copyright ©TheTAS Group. All rights reserved. 7
Baseline figures for large selling organizations can be
calculated by team or region, covering, quota, % quota
achieved, number of deals, and revenues. You should also
record average deal value and close rate by team. For more
detailed cost considerations, should also record the gross
margins and net profit you achieve across software/licenses,
services, hardware, maintenance, or other type of products
and services you charge, together with their respective
contribution to your overall revenues. This will give you a full
baseline that looks like the example below:
Performance figures are your targets across the four key
levers of the SalesVelocity Equation (# deals, average deal
size, % close, length of sales cycle) for each of your teams or
regions.
A MORE INVOLVED ROI
CALCULATION
For companies looking to take a more detailed analysis of
their expected sales effectiveness ROI, on both the revenue
and expenses side,TheTAS Group has developed a more
involved calculator which allows in-depth discovery or more
factors. This covers 7 sections:
• External Costs
• Internal Costs
• Baseline
• Performance
• Result
• ROI Analysis
• Future
External costs come from your sales effectiveness vendor,
make sure you capture them all.
Internal costs are often ignored in assessing the total cost
of a sales effectiveness initiative. To accurately calculate the
ROI on any such initiative, it is important to factor in the cost
of travel to training and other such expenses. You should
consider the cost of payroll for the personnel involved in the
program, for the days they are not producing. Opportunity
cost is another important cost category for calculating ROI
on sales effectiveness investment. In this category it is the
loss of profit contribution from being out of the field that is
the key factor. In other words, what percentage of time at the
program is lost selling time? You may decide that being away
for 3 days on training is 100% lost selling time, but this is not
always the case, as adequate breaks are built into training
programs to allow for some work to creep in.
Of course, you may also be opting not to send your sales
people to a classroom-based training event, preferring
to invest in a virtual solution such as that provided by the
Dealmaker platform. The DealmakerVirtual Learning System
trains remotely in small, bite-sized pieces that are perfect
for modern on-the-job learning and dramatically improved
absorption. Post-training, Dealmaker software can be
integrated with your CRM system to offer on-demand training
content at every step of the sales cycle to achieve daily
reinforcement and long-term retention. In this case, your
internal costs will be significantly lower.
BaselineSectionfromthemoreinvolvedROICalculation

9. Share this White Paper! Copyright ©TheTAS Group. All rights reserved. 8
Result is the summary section which takes the completed
input requirements for the more involved calculator,
returning expected revenues, gross margin and net profit.
The calculator also provides the impetus for investment by
presenting the cost to the business of each day’s delay or
inaction.
ROI Analysis breaks down the analysis in more details across
the teams and in total, as illustrated below:
ROIAnalysisSectionfromthemoreinvolvedROICalculation

10. Share this White Paper! Copyright ©TheTAS Group. All rights reserved. 9
Future provides you with the format for recording your
achievements after implementation, so that you can perform
the important task of measuring actual results against
expected improvement from the baseline, as the example
below demonstrates.
FutureSectionfromthemoreinvolvedROICalculation
As with the simpler calculator, a representative fromTheTAS
Group can talk to you about ROI, share with you a copy of
this calculator, and work with you to uncover your goals and
calculate the ROI of your sales effectiveness investment.

11. Share this White Paper! Copyright ©TheTAS Group. All rights reserved. 10
Second, you should also present the targets you are setting. If
you are looking for just a 5% improvement from each of your
sales people across the key parameters, this should be viewed
as reasonable and achievable by your executive.
Third, you should look at the target numbers you are asking
each salesperson to achieve. When framed as a number per
individual, rather than the roll-up total, it is much easier to
see how the uplift can be achieved. For example, continuing
the 5% theme, you’re asking each sales person to be working
with 21 opportunities per quarter rather than 20, move their
average deal size up from $50,000 to $52,500, close 27.5% of
their deals instead of 25%, and shorten the sales cycle from
52 weeks a year to 49 and half weeks. If each sales person can
make these small inroads, they will move from $1m per year
velocity to over $1.25m.
Keeping your lever targets conservative, and breaking the
end numbers down to the individual sales person level,
will maintain the thoroughness of your analysis while also
presenting the results in a way that is digestible to your
audience. After you have invested in your project and have
measured your results, now is the time to present them as
organization-wide, top-line revenues.
PRESENTING ROI CALCULATIONS
FOR APPROVAL
When you have run your calculations, you may be left with
some extremely impressive numbers. After all, if you can
move your top line revenues from $100m per year to $117m
per year with a sales effectiveness initiative (17% increase
in top line revenues), for a relatively small investment, then
the ROI percentages are enormous. This is because when
everyone can improve their performance the combined
impact across your sales force can be huge.
This is itself can present problems when you look to present
your recommendations to your executive. Can you really
stand behind such impressive numbers? Do they look
credible? How can you present them in the right way?
There are a number of things you can do to back up your
recommendation.
First, revisit your target uplift for the four key levers. Are
they realistic? Remember that 10% improvement on each
lever aggregates to 48% uplift in your effectiveness. 5%
improvement across the board is still an impressive result at
an organizational level.
CONCLUSION
Assessing the ROI of an investment in a sales
effectiveness initiative involves discipline on the part
of both customer and vendor, and a laser focus on
the key levers that influence the success of a sales
performance automation project. TheTAS Group has
devised two different types of vendor-agnostic ROI
calculators to match the conditions and requirements
of all potential customers. For a free ROI consultation
with a representative or Partner ofTheTAS Group,
please contact us at info@thetasgroup.com.
We’d be delighted to discuss your specific needs
further, and explore how our unique sales
methodology, sales process, and Dealmaker can drive
sustained sales performance improvement in your
organization. If you wish to find out more, please
contact us at info@thetasgroup.com.

12. ABOUTTHETAS GROUP
TheTAS Group helps progressive sales organizations increase their sales velocity resulting in higher win rates, bigger
deals, shorter sales cycles, and more qualified deals in the pipeline. Our unique value is deep methodology embedded
within intelligent Dealmaker software, 100% native in Salesforce. Smart coaching, delivered just-in-time, improves
sales performance and accelerates sales results.We have changed the paradigm of improving sales effectiveness from
traditional sales training to delivering sales methodology and insights when and where the sales person is working a
sales opportunity.
For more information visit www.thetasgroup.com
Copyright ©TheTAS Group. All rights reserved.This briefing is for customer use only and no usage rights are conveyed. Nothing herein may be reproduced in any form without written permission ofTheTAS Group.