Do you ever get the feeling that 2020 has dragged you kicking and screaming into…
Similar to many other industries, Medical Technology has experienced significant market disruption. However, the impact of this disruption has been compounded by specific demands being placed on the healthcare market, including: effects of the new regulatory environment – with the implementation of the European Medical Device Directive and the In-Vitro Diagnostics Medical Directive; the growth of mobile technology in health solutions; increasing competition, and of course, pricing pressures. Customers are expecting access to high-value products for low prices, which significantly affects the margins of manufacturers and in turn places considerable pressure to further reduce overheads and improve the value of their offering.
Most savvy Medical Technology companies have come to realise that the most effective way to overcome the challenges of the market and meet their customer needs, is to change their business model. For some, this means incorporating a strong digital component into new business models whilst for others, it involves changing their route to market. This can entail making a large proportion of their sales force redundant, resorting to outsourcing to a specialist who not only has the experience in that particular sector, but also has a highly valuable network of contacts.
So, what does this mean for you, as a sales professional? Well if you have significant experience, coupled with the right attitude and skill set, it might be the right time to consider becoming a self-employed sales agent.
I recently sat down to chat with Fox Partnership’s Mark Vossenaar, who shared his insights based on over 35 years of working in commercial roles in the Life Sciences and Medical Device sectors. He is using his commercial acumen to help start-ups in this sector.
Before I share Mark’s observations of what you can do to improve your chances of success, let’s first examine the benefits of going down this route of self-employment:
- You have the opportunity for uncapped earnings and can determine your own work/life balance
- You can experience the freedom of being self-employed, not bound by the bureaucracy found in many companies
- Internal sales forces traditionally have a high turnover and in an uncertain market are plagued by cost and margin pressures – being independent, you don’t have to worry about being made redundant
- In some countries, when setting up as an independent sales agent, you are entitled to some level of government support
- You are master of your own destiny, determining your own limits, your preferred geographical area, and also the manufacturers with whom you choose to work
- There’s no need to worry about your fit within a company, or even whether you match the profile of the average sales representative, the only thing you’ll be judged on is your performance
- And probably most important, your success depends on your motivation, your unique experience and your network of contacts.
Unlike being employed for a single company where you get paid a basic salary regardless of whether or not you sell anything, one of the biggest challenges you face being a self-employed sales agent is that if you don’t sell anything, you won’t be able to pay the mortgage or put food on the table.
During my conversation with Mark, he was able to share some of his inside secrets to achieving commercial success.
Work smart – Allocate time and resources correctly
It is vital as an independent sales agent that you allocate your time and resources correctly. In many instances, you don’t have the backup of resources from a company to help manage your administrative and business development tasks. You may have to input data or generate reports for the manufacturers you represent. There are sales enablement tools out there, like meeting scheduler tools that help streamline administrative tasks. Spend time initially doing things like setting up an email template that you can adapt and use to keep in contact with your network of contacts.
Finding additional product lines to represent and new prospects to target while you are busy generating revenue can be really hard. There are options available. You can do your business development work yourself, or you can work through a recruitment agency that aims to match companies with agents. However, in the medical technology sector such recruitment agencies are few and far between. Whatever you choose to do, just keep in mind that many sales agents become extremely good at sales efficiency and building solid networks but can then ultimately fail simply because they haven’t allocated sufficient time to look for new products and secure their future.
Be disciplined in how you apportion your time. Figure out what works for you and make sure you stick to it. A good rule of thumb is 20 – 25% of your time should be spent on administrative, logistic, support and business development work and 70-75% of your time selling. Some people choose to spend time during their evenings and weekends doing the administrative and business development work. Be wary of doing this as it can put your work-life balance at risk, which of course can undermine one of main reasons you became self-employed in the first place.
Ensure a balanced portfolio of products
Many sales professionals who make the move across to working as a self-employed sales agent have this idea that introducing the latest remarkable innovation from some SME (Small and Medium Enterprises) somewhere to their network of contacts is going to be their ticket to an early retirement. Now that may well be. Eventually. However, it takes time to sell an unknown brand, and remember as long as you’re not selling, you’re not earning. In addition, many SMEs can’t offer the backup and support needed to truly be successful. The smart way to work is to get a balanced portfolio of non-competing products, made up of one or more products from a major manufacturer supplemented by a range of complimentary products from SMEs. What you’re aiming for is to have at least 30-40% of your income coming from these SMEs. There is another significant benefit to doing this. Balancing your portfolio with a range of products from a number of manufacturers gets you around any “dependency” issues (i.e. working for one employer) avoiding any legal and tax implications for the both you and the company.
Make plans for a consistent income
If you have plans to be an independent sales agent long term, you need to make sure you have a strategy to ensure you achieve that goal. Your earnings will be variable but there are certain strategies that you can put in place to minimise the ups and downs so that your income is as consistent as possible.
First is to ensure that you have a balanced portfolio. With the right mix of products, you should also have a mix of lead times. Go for products that have both a long and short lead time. You are likely to earn higher commission rates on high-value products with a long lead time. The products that are quick turnover, high volume, repeat order products, generally have a shorter lead time and a lower rate of commission.
The second important element to making sure you can survive any down periods you may have is to put 10-20% of your earnings aside every month so that you build up a contingency fund. There have been a great number of very successful sales agents who have had a successful period of between 3-5 years and then give everything up as they failed to put a strategy in place for consistent income with a plan for any down times. It can be a painful learning curve for an independent agent as well as damaging to the sales of the manufacturer.
Know your rights
You may be hesitant to set yourself up as an agent simply because you perceive there to be a significant associated risk. Of course, there is some risk attached to starting your own business, so your success is dependent on how motivated you are. Despite the fact that you are self-employed, there is still a surprising amount of security. There is for example EU legislation that protects you, including ‘The Commercial Agents Regulations Act 1993’. This legislation governs the fact that you need to have a contract in place with your principal (the manufacturer you represent) which contains both protection and obligations that both parties must adhere to.
Nurture your relationships
If you have been working in sales for years, you obviously know that your network is your biggest asset. But once you are self-employed it is more important than ever that you nurture the relationships that you have built up. Remember that being able to eat depends on your network buying the products you’re selling.
In some instances, the manufacturers you represent will provide you with qualified leads to follow. However, this won’t happen all the time, so don’t be too reliant on others. Develop your own communication strategy, that includes an element of inbound marketing. Be selfless in the information you share with your network. Make sure everything you share is valuable and relevant, addressing the challenges facing those in your network. Being out in the field is the perfect opportunity for you to gather useful information, and you really can become an expert in your field. Sharing that knowledge not only demonstrates your passion but will also help you build trust with your network, both in you as a sales professional, and also in the brands and products you represent. Regard every interaction with your network as an opportunity to sell, without being too salesy, and regardless of whether is pre-, during- or post-sale.
Be effective, be efficient, be successful
Given the disruption in the Medical Technology sector, there are a number of opportunities opening up for sales agents with manufacturers who are looking at new business models. Mark is currently working with a new start-up that aims to disrupt the traditional medical technology sector, with a new go-to-market channel. The ultimate aim of this start-up will benefit both the manufacturers and sales agents. The company is being set up by a group of executives, who recognise the challenges currently facing manufacturers and sales agents and feel confident that they have the perfect solution. Individuals looking to maintain their self-employed status and who are interested in working in a more supportive environment, should send their CV to email@example.com. At this time Mark is only interested in people working in Medical Devices and Life Sciences. Please don’t forget to specify the sub-sector in which you work for instance, if you specialise in endoscopy, surgical or imaging equipment etc.
Let us know if you have found these tips helpful and if you have any you would like to share, please feel free to add them to the comments section below.
About Mark Vossenaar
Mark has over 35 years’ experience of working for blue-chip organisations within the Life Science and Medical Technology industries. He is a visionary leader who has significant experience with managing both distributors and direct sales teams ensuring they achieve revenue growth in capital, consumable and service businesses with infectious energy and integrity. He works globally, cross-culturally and cross-functionally delivering strategic and tactical integration, business growth, customer loyalty and shareholder value.