Sales Force Testing to Prepare for Industrial Sales Layoffs and Hiring

Ed Marsh | Mar 8, 2023

Who Should Stay? Who Should You Add?

Introduction to SignalsFromTheOP

Guide to episode

  1. Industrial companies will likely begin to shrink their sales force as economic conditions worsen.
  2. Accurate, predictive data will help to make the best decisions for the company, and ultimately for each person.
  3. The same sales force testing tools can be used to optimize training for the rest of the team, and to identify top talent to consider hiring.
  4. Underlying it all is the question an increasing number of CEOs are asking - "Can my sales leadership achieve what I need them to do?"

Transcript follows:

Hello. I’m Ed Marsh, and thank you for joining me for this episode of my biweekly video blog Signals from the OP. I draw on my consulting work with middle-market industrial manufacturing firms to identify topics that are of pressing importance to senior executives and board directors. If you know of someone who would find value in this video, please share it with them.

Sales Pain Coming Soon to Industrial Manufacturers Near You?

Today, let’s talk about layoffs. There have been many in the news lately.

Most of the headlines have been about layoffs in the tech space, which is a leading indicator. With a couple of exceptions, the trend hasn’t really hit industrial companies yet, as many of them still have full order pipelines as they dig out from a couple of great years where selling was easy. Their biggest problems were people and supply chains.

We don’t know what a recession will be like, how hard it will hit, or when. And there are conflicting signals now about soft landing, etc.

Here’s the reality.

Industrials will have a slowdown. And when it happens, companies will be struggling trying to figure out whether to reduce the size of the sales team and, if so, who to cut. It’s a crummy situation for everyone, but it’s real, and it’s part of management’s responsibility to everyone else in the company.

So that’s looming over the horizon, and it’s not the only sales challenge companies face.

SBI (Sales Benchmark Index) just released statistics from their survey of CEOs.

One jaw-dropping number is that an astounding 57% of CEOs are not confident in their Chief Revenue Officers’ ability to drive the business forward. For CMOs, it’s actually 69%!1

So we’ve got two things cooking simultaneously.

  • First, a large percentage of business leaders are not certain that their sales leadership can deliver results.
  • Second, it’s likely that teams are going to have to be cut.

What a mess!

Accurate Sales Force Testing Empowers Management

sales force testing can help industrial companies make smart sales force decisions during a recession
ai generated image by Dall E

On the one hand, there’s a strong normalcy bias among traditional companies that are accustomed to periodic cycles.

On the other hand, there’s a lot of uncertainty.

So what’s a company supposed to do?

In the industrial manufacturing space, there’s actually a pretty well-established playbook that we can take from the operations side of the business. Let’s turn to empirical criteria, facts, and measurable metrics.

Now you may be saying to yourself, “But sales and salespeople are not simple numbers. There’s so much soft stuff thrown in there.”

Well, actually, using the right sales force testing tools, there’s a lot more clear data that we can identify. For instance, we can consistently know (not just guess) who not only can sell or lead a sales team but, in fact, who WILL sell or lead a sales team – and we can do it with a predictive validity of 93%

Accurate data from a sales assessment test means two things.

  • First, we can answer the part of the question that CEOs are asking themselves – Is the person leading the sales effort capable of doing so?
  • Second, we can also answer that question about each member of the sales team. That provides empirical data which companies can use to do scenario planning for sales team reduction. In other words, if you have to cut the team by 5, who would be the ones to go? If you need a 20% reduction, who would they be?

Of course, that same sales skills assessment test data can be used to guide some training of the sales team. When you’re clear on each person’s strengths and weaknesses, you can focus training effectively to prepare your folks for the very real conditions they’ll experience during a downturn – for instance, discounting competitors and projects being subject to cancellation.

And a predictive sales force testing tool like the OMG Sales Assessment can be used for potential hires too.

That’s important because some new talent will become available that you might consider adding to your team. That could be a net addition, or an upgrade/replacement. In many cases, though, experienced industry reps have cycled through companies with consistently mediocre success. And candidates from outside your industry would have to be really strong to get the nod, given the learning curve.

A predictive sales skills assessment test can support your sales recruiting effort by helping you look very objectively at candidates to help avoid costly mistakes based on resume and interview exaggerations and gut feeling.

Four Recession Use Cases for Sales Force Testing

So, to recap, predictively valid sales force testing can do four things for you in this odd market situation we face now.

  1. It can help to answer the question you may be asking if you’re like 57% of CEOs – whether your sales leader can do the job you need them to do.
  2. It will help you take a detailed snapshot of your team (think of it like an MRI) that you can use to identify the weakest performers (and those least likely to be able to perform) to help you run scenario planning for sales force reduction. Think of it like a “smart sizing” scenario planning tool.
  3. You can use the same “Sales MRI” to plan and optimize sales training in the areas your team will need support to succeed in a recession market
  4. Finally, you can use the tests as a candidate sales assessment test for folks you’re thinking of hiring to upgrade your team.

Using Sales Assessment Tests to Match your Sales Team to Buyer Realities

We can’t predict the specifics of a recession. But we do know that buying habits and behaviors have changed dramatically over the past 5 years. Yet many industrial manufacturers still market and sell much as they did a decade ago. That means that your revenue growth playbook may no longer align well with buyers’ expectations.

Indeed, some of the folks who excelled in past market situations may no longer be able to do so. So, it’s important to understand who’s got what’s needed for today’s markets, particularly for a recession. Knowing that is incredibly powerful and helps you make various critical business decisions around managing, hiring, and laying folks off. Using the right sales force testing tools will help.

I’m Ed Marsh. Thank you for joining me for this episode of Signals from the OP. If you enjoyed it, please share it and subscribe – either to my YouTube channel EdMarshSpeaks.TV or at the related blog

1. Sales Benchmark Index data