Thomas Szasz,
Work can bring, both, pleasure and pain, fun and failure. The best way to maximize the opportunities for pleasure and fun is to make sure that the career being sought requires activities you enjoy. Generally, salespeople in all industries are responsible for developing customer interest in a company's products and ensuring that any client questions or concerns are handled appropriately. Such a job description usually leads most people to say, "Anybody could do that!" Indeed, many try, yet few can professionally execute the entire job activities required of a successful medical sales representative.
Selling for a company or corporation is the next best thing to owning a business (some reps even suggest it is better than owning a business!). The employee is in charge of everything that goes on in the territory, but the fiscal responsibility rests solely on the shoulders of the employer. That might be the "panacea" that Szasz was describing. Medical sales can be an entrepreneur's delight, but many hats must be worn during the course of managing a sales territory.
The obvious expectation for a sales employee is to meet company-set performance objectives. The primary purpose of this chapter, however, is to highlight the key job activities that are performed in order to bring about the achievement of specific sales objectives and quotas.
- ACTIVITIES
- Product Presentations
- Concept Presentations
- Territory Management
- Distributor Management
- OEM Management
- In-services/Customer Training
- Phone Work
- Administration
Most medical companies sell hundreds or even thousands of different products. This means that salespeople must constantly study product technical data in order to fully acquaint themselves with product codes, performance, features, benefits, pricing, packaging, and so forth. Medical reps must be able to efficiently import key product information to customers who are limited in the amount of time they have available to listen to product presentations. Health care professionals do want new product information when their jobs can be made easier, safer, or more cost effective, but they need complete information quickly.
Many positions, such as pharmaceutical positions, serve as "teachers" to their customers. Reps must know as much or more about the product and the disease it was designed to treat than the practitioner doing the treating. Accuracy in product presentation is critical in the health care business.
Product presentation is often required both before and after the sale. Before the sale presentations are geared toward detailing the features and benefits of a specific product for the purpose of getting an order. After the sale presentations are designed to help the clinician use the product effectively. Although most product presentations occur in a non-practice environment, some sales positions will require the ability to talk a practitioner through the steps of product use during situations involving direct patient care.
Because medical representatives must be so concise in their product presentations, many companies are more concerned with finding reps who possess an excellent command of the English language than they are in hiring those with science backgrounds similar to their clients. Language skills are paramount to effectively presenting products to the customer. Each presentation must have clarity, and more importantly, it must have a goal.
CONCEPT PRESENTATIONS
Although the skills used when presenting a product or a concept may be very similar, concept presentations require the ability to demonstrate abstract ideas. For example, Company X may have three major product lines (such as gloves, sutures, and cauteries) with each line consisting of several product codes that may vary in size, materials, and strengths. Assuming that Company X's brands are second in market share to three different companies that sell only one line of product each (Company A has the #1 glove line, Company B has the #1 suture line, and Company C has the #1 cautery line), Company X must now take an ideational approach toward potential customers. In this case, the approach might conceptualize the potential cost savings achieved by doing business with one company instead of three. Through vendor reduction, Company X could help the customer reduce purchase orders, reduce the number of reps to work with, streamline inventories, and so forth. The company would certainly provide an acceptable product, but in order to get the business it would have to sell the benefits of a concept, such as vendor reduction, instead of a specific product.
As lowering supply costs, becomes more important to health care facilities, product advantages become less important in the mind of the customer. Conceptually presenting what the product can accomplish is much more critical than simply demonstrating the features and benefits of a product. When presenting a product, the customer can easily see it. When presenting an idea, the customer can see only the portrait a representative is able to paint with his or her words.
TERRITORY MANAGEMENT
Territory management is the science of putting company sales objectives into place within the geographical confines of an individual sales territory. This begins by analyzing what opportunities exist within the territory. The analysis is based in part on knowledge of competing products, customer satisfaction, and product volume potential. A representative may, for instance, have to decide that it is a better sales choice to spend time with a customer who is completely satisfied with a competing product than it is to spend time with a customer who is dissatisfied with the same product, if converting the satisfied customer represents enough business potential to meet the required sales objectives for a much longer period of time.
Territory management is essentially an exercise in setting priorities. For example, reps must:
- decide how to divide their time between current and potential customers
- determine how to route their travel to maximize time in front of clients
- develop and manage customer databases and files to ensure that decisions are based on accurate information
- manage customer contracts
- forecast sales for manufacturing purposes
- prepare accurate expense and activity reports
DISTRIBUTOR MANAGEMENT
Few medical product companies sell directly to the customer. Most health care facilities will utilize the distribution services offered by companies that specialize in distribution. Once a hospital, clinic, or center decides on a specific product, they ask their distributor to order the product into the distributor's warehouse. The health care center will then order the product from the distributor when it is needed, thus the term just-in-time inventory.
The distribution of products through a distributor offers many benefits to both the end user and the manufacturer. However, additional responsibilities for the manufacturer/ representative grow out of this relationship. The manufacturer/rep must help manage the introduction of new products, work with distributor sales representatives to close new business, assist in determining proper inventory levels, confirm proper filing of contracts and rebates, and provide up-to-date product information to a distributor's customer service reps. Even though a manufacturer targets and closes new business at the end user level, the distributor becomes the legal customer of the manufacturer because it is the distributor who actually buys the product. In effect, medical companies have two customers: the end user and the distributor who services the end user. Meeting the needs of both is critical for sales growth in today's market.
OEM MANAGEMENT
There can at times be one additional customer in the sales process: the original equipment manufacturer (see Chapter 4). This customer is a company that buys products from several manufacturers and then repackages all of the products into one new package. The advantage for the end user is that he or she has all of the products needed for a specific patient procedure and does not have to deal with the packaging waste and labor involved in managing all of the items individually. OEMs are selling a service, and they utilize an entire sales force just like manufacturers or distributors. OEM reps can also exert their influence at the account level as to which products go in to their repackaged product.
When end users decide to utilize OEM companies, the medical product rep must then manage sales through three steps. The end user makes the product decision, informs the OEM Company what products they want repackaged, and then advises the distributor of their inventory needs. The chain can get very complicated, and helping manage business growth with both distributor and OEM supplier is an integral part of a manufacturer rep's job.
IN-SERVICES/CUSTOMER TRAINING
The slightest change in product use can result in what end users see as dramatic change in their practices. Additionally, many practitioners not involved in the actual selection of a product assume that all new products are cheaper, less effective substitutes for the incumbent product. Therefore sales personnel must first make sure that new customers are aware of any practice changes that the new product may bring about, and then they must also present it in a way that romances the product as a clinical upgrade.
In-services are short educational periods designed to inform health care staffers of personnel, policy, product, or practice changes. Health care facilities expect medical sales reps to provide this service whenever product training is necessary. In-services are usually completed before a new product goes into use, and this is a great time for salespeople to solidify the sale. Many facilities will enter into product evaluation phases before a final decision is made, and the in-service sets the tone for that evaluation. Reps are provided the opportunity to discuss the technical and functional aspects of products during in-service periods, and a successful in-service is usually proportionate to creativity in presenting the material and refreshments provided to the staff.
PHONE WORK
Customers in the health care field will rarely see sales-people unless an appointment has been pre-arranged or a standing appointment is agreed upon. This means that a lot time is spent daily on the telephone trying to make those appointments with elusive decision makers. Evening hours are spent calling distributor and OEM reps to follow up on end user requests. Most companies and customers do have voice mail systems to ease the challenge of staying in touch, but trying to make customer appointments over voice mail is still too impersonal for initial contacts.
Make a note to find out who pays for the phone bills. It is very easy to run up monthly charges in the range of $400-$500, and while cellular phones certainly make the job easier, they are expensive. Telephone use can be both costly and frustrating, but telephone contact is the birthplace of every good sales call.
ADMINISTRATION
Administration-another word for paperwork, and in the electronic age, computer-work! Employers generally require that representatives provide three basic kinds of reports: activity, expense, and forecast reports. Though not the most exciting activity around, reporting is absolutely necessary in order to precisely deploy the sales force, efficiently manage sales expense budgets, and accurately forecast production schedules to ensure adequate product supply.
Activity reports may include daily, weekly, and/or monthly reports that describe who the rep has called on, what products or concepts were presented, and what results were obtained. Pharmaceutical companies that require regularly scheduled physician contacts, for example, will develop complex databases from activity reports in order to provide their reps with territory management tools. These tools are designed to remind reps when they last called on a customer, what was discussed during the appointment, what product usage information was given, and when they need to make another call. Activity reports are also used by senior management to assist in the development of a sales force strategy and in performance reviews for individual reps.
Expense reports must be completed and accurate because they are used to support gross income adjustments and tax advantages for the company. Expenses are usually handled either by allowing reps to write themselves a reimbursement check up to an approved level, by paying the expenses back in arrears, or by charging expenses directly to the company. The second method could mean that a rep has personally paid for several weeks' worth of expenses before any compensatory payment has been made. Reps generally prefer the first or last method.
Forecasting is the process of determining how much product a company should manufacture over a given time period. It is an inexact science based on historical product usage and estimated new business. Forecasting reports are very critical for both the company and the customer. If a company builds up too much inventory, the company suffers due to the costs of carrying excess product. However, if too little product is made and back orders result, customers suffer because they are forced to spend time finding an alternate supplier or, in extreme cases, to cancel patient procedures. Some companies have specific personnel in charge of this process so that the forecasting responsibility for sales reps is minimized, but forecasting is an essential job activity.
SUMMARY
The skills and activities required of a medical sales representative indicate the need for generalists rather than specialists. Broad knowledge of many fields is much more important than infinite knowledge in one subject area. The career is exciting because the required diversity in knowledge and ability means that the environment is constantly changing, and constant change dictates constant personal and professional growth.
