Mike Burnett of the Alexander Group discusses a common challenge among medical device manufacturers – how to effectively drive sales across diverse and growing product portfolios.
Welcome back to the Alexander Group’s medical device sales podcast. My name is Mike Burnett and I’m a director and part of the medical device practice here at the Alexander Group. Today, we’ll be discussing one of the most commonly cited challenges among medical device manufacturers how to effectively drive sales across a diverse and oftentimes growing product portfolio.
This is a challenge for vendors of all shapes and sizes from the largest of the Fortune 500 to the smallest of startups trying to expand their set of products or service offerings. What makes this especially challenging is today’s pressure to accelerate top-line growth while maintaining or decreasing their sales expense as a percent of revenue. This typically leaves sales leadership with limited resources while being asked to grow their overall revenue and oftentimes strategic portions of their portfolio.
We’ve had the opportunity to work with medical device manufacturers, and we’ve seen a wide range of approaches. It’s been our observation that oftentimes taking a more holistic or multi-pronged approach is often the best solution for some new product training programs or spiff. Maybe all that’s required. For others, a complete transformation of their go-to-market model. But how should organizations decide what’s best for them? We typically recommend by starting with an assessment of the sales coverage model because if this is broken. Other efforts may only prove futile.
Start by exploring two fundamental questions. Question number one: What are our unique revenue segments and what is their potential? Agi defines a revenue segment as the unique intersection of a product offering and customer. This concept is especially important in the medical industry, given its wide array of products, practice areas, buyers and call points. For example, while a growing number of procedures are being conducted in both the acute and outpatient settings, these segments differ drastically in terms of buying behavior and may warrant a separate go-to-market approach.
Question number two: What sales and service motions are required for each revenue segment? One of the biggest challenges to managing a broader product portfolio is balancing the number of unique sales and service motions required to be successful. Each segment may require unique sales strategy and process, which can prove difficult for one seller to effectively master. For example, a well-established commodity in the O.R. may require more contracting and administrative support than active sales coverage or clinical support. The opposite is the case for a new surgical procedure that likely requires a consultative selling approach with deep clinical expertise. If a single sales position were asked to carry both of these products and sales motions, it wouldn’t be surprising if sellers self-select where they spent their time based upon their interest as well as their skill set.
In summary, and at the risk of oversimplifying, we find that the greater the number of unique segments and motions, the more likely the need for job specialization. When we couple this with the financial viability of each segment, we should begin to see a clearer picture of the optimal mix of resources required to effectively cover the portfolio. Every year, we work with clients to sort through these exact questions.
This has led to the deployment of sales forces assigned to specific hospital floors, areas of care procedures, disease states and, yes, even specific products. But even with the perfect coverage model, there are oftentimes other elements required to drive effective and successful cross-portfolio selling. Some of the most common levers include hosting training on new products and sales methodologies, developing product launch playbooks and collateral, deploying non-quota carrying overlay specialists to drive learning and adoption in the field, realigning incentive plans to product-specific measures or rewarding for balanced portfolio performance. And lastly, increasing the visibility and reporting of product-specific performance and pipeline at the field level.
If you’ve been successful or have struggled to drive a balanced sales portfolio, we’d love to hear about it. Feel free to contact us at Alexander Group. And thanks again for joining the podcast.