The Fragmented Sales Training Industry

I get calls periodically from private equity fund managers and other investment bankers about the demographics of the sales training industry.  Journalists I speak with are interested in it as well. 

What’s so noteworthy?  The degree of fragmentation of the sales training industry.  It’s certainly not the most fragmented.  Law firms are considerably more so, for example, with Baker & McKenzie topping the list at 3,300 or so lawyers.  Here’s a fact: 50% of the 1.14 million lawyers in the U.S. are practicing alone.

With lawyers, your requirements will determine which lawyer (or law firm) best matches your requirements.  Certainly defending Microsoft against a $1.3 billion fine levied by the European Commission isn’t a job for your average storefront lawyer.  And you don’t need a $750 per hour senior partner to incorporate your sole proprietor sales training business.  The same goes for buying sales consulting and training.

Think about it, though.  You’ve got AchieveGlobal at $100 million or so (even though they aren’t a pure-play sales training company).  Wilson comes in at around $60 million.  When you study at the top 25, as I do, it doesn’t take long before you understand you’re down in the single-digit millions.  And you’ve got many hundreds of one- and two-person shops who may be doing business now and then with some of the Fortune 500.

There are no 800-lb. gorillas in the sales training industry. No vendor has claimed that space, although several are pushing hard in that direction. 

Why is this industry so fragmented?  Easy.  Low barrier to entry. You really don’t need much more than a few years in sales and one client to get you started.  I even get pitched to by sales trainers with no selling experience, if you can believe that.  What’s more interesting (or distressing) is they’re featured at conferences and written about in magazines and journals appealing to salespeople and their managers.  Since there is no standard of performance for a sales trainer like you have with a lawyer, their capabilities are all over the map.

There are sole practitioner sales trainers and consultants out there who do a terrific job.  I’ve worked with some, like Steve Waterhouse, and have heard about many more from their clients. Jill Konrath is another.  No, they can’t handle all the consulting and training requirements for a large multinational.  But they do deliver real value if you engage with the right one for a specific assignment.  On the other side of the coin, you can select the wrong brand name sales training company for a large assignment and watch them underdeliver, as some of them tend to do.

Buyers of sales performance improvement services, such as training, have to really understand their own requirements and be willing to think out of the box with respect to who will best match those requirements.  If you pick a person or firm just by name recognition, who you hired to do the training at your last job, who presented during the last webinar you happened to see, or who advertises regularly in SellingPower magazine you could be headed for a disaster.