Building an effective sales team has always been a challenge—especially in medical sales where industry regulations are constantly evolving. Organizations in the medical/pharmaceutical industry have to face strong, motivated, and often well-equipped competition.
Bringing a medical sales team that is underqualified can be a major risk for companies. While risk is always a part of any business, it’s important to find ways to mitigate risks whenever possible while maximizing the potential positive outcomes. This is where an outsourced sales force can help.
What are some of the risks that medical sales teams should be aware of? Although completely avoiding risk is impossible, knowing what risks you face can help you prepare for and mitigate their impacts.
Here are a few of the different risks that healthcare sales teams may face:
One of the biggest risks that any sales rep in the medical sales industry can face is accidentally violating some law or statute. Sometimes, a new regulation can be passed (or legal precedent set) that restricts sales reps from engaging in activities like taking a potential client to lunch.
At other times, a sales rep could do something that counts as the unauthorized practice of medicine. For example, a story featured on Drug and Device Law’s blog stated that a sales manager who sold a hospital a prosthetic hip part “scrubbed in… after the surgeon couldn’t remove the prosthesis, the sales manager ‘offered to and did take it out.’” The sales manager then “volunteered that he could fix the ‘thing’ and ‘put it back.’ And so, with the surgeon’s consent, the sales manager finished the rest of the three and a half hour surgery.”
This opened both the hospital and the sales manager to charges of “The Unauthorized Practice of Medicine.” Though an extreme example, it highlights the need for sales reps to be very careful about how they interact with hospitals (and specifically to avoid trying to act as care providers).
The fines and other penalties for legal violations vary depending on the violation and its severity. Impacts could range from a “slap on the hand” fee and remedial training being mandated to more severe fines or lawsuits worth millions of dollars and even incarceration.
One of the risks that a field sales team faces more frequently than sales reps that work from an office is the risk of exposure injury or illness on the job. For example, field sales teams:
Another risk cited in the Occupational Medicine paper was the risk of workplace violence, but it was noted that “the sales force do [sic] not as a group fall into a ‘high-risk’ category when compared with the national average.”
In medical sales, the barrier to access decision-makers can be tough to overcome. Doctors, practice managers, and pharma CEOs all have numerous gatekeepers who strictly screen calls and meeting appointments. After all, a busy doctor or other decision-maker often has little time to listen to a sales pitch.
Worse yet, some doctors and medical business owners are worried about the mere perception of impropriety and the risk that it can affect their business.
Because of the difficulty in reaching decision-makers, sales reps often struggle to generate meaningful results. This, in turn, can hurt the business’ cash flow—which can be especially harmful for companies that need to add new accounts to drive revenue and business growth.
What’s the difference between hiring internal sales reps and using a contract sales organization (CSO) to hire an outsourced sales team? Which of these choices is the best for your own business?
For some organizations, the benefits of hiring a purely internal team of sales reps can be worth more than the benefits of outsourcing sales. For others, the advantages of outsourcing sales reps from a CSO are too much to pass up.
There are some advantages to hiring an in-house team of sales experts vs outsourcing sales. One of the biggest advantages is that a purely in-house team offers medical sales companies more control over their sales force.
This can lead to sales reps becoming dedicated experts at selling your products and/or services. If there is a specific training program that the business prefers for its sales reps, then the business can ensure that all reps are entered into that program.
With internal teams, it’s easier for medical industry companies to dictate what sales tools reps use. For example, say that the business uses a specific customer relationship management (CRM) tool. With an internal team, that CRM can be made mandatory without issue. This makes it easier to collect performance data about sales reps and gain full visibility into sales activities.
Another advantage is that with an in-house sales rep, 100% of the rep’s time and attention is dedicated to the business’ needs. With some outsourced sales teams working as 1099 contractors, they may be working part-time with multiple clients.
In short, the big advantages of hiring in-house are:
Using an outsourced sales team can have different benefits depending on whether the sales reps are 1099 contractors or if they’re brought on as full-time employees who work exclusively with one company.
Some of the most common benefits of using an outsourced sales force include:
As mentioned before, the benefits of leveraging a CSO to outsource sales can vary. With some outsourced medical sales services, the outsourced reps will be virtually indistinguishable from internally-hired ones. In fact, some CSOs offer full-time sales team recruitment services where the reps specifically act as a part of the client’s company—wearing the same uniform and following the same rules.
However, because the quality of service can vary from one CSO to the next, it’s important to verify the services they provide before signing a contract. It can also help to look for guarantees as well as testimonials from other clients.
So, what does outsourcing sales have to do with mitigating risk? While cutting recruitment time, accessing a large pool of sales talent, and saving on employee overhead are often the key factors, one of the biggest benefits of outsourcing is how it can help to reduce risk for medical sales organizations.
Here are a few of the ways that a company in the medical industry can mitigate risk by outsourcing sales:
What are the warning signs of a low-skill sales rep that can be reliably identified during an interview? For interviewers with little practical experience in dealing with applicants who have been coached on “interviewing well,” the tells of a bad fit hire can be hard to spot.
Partnering with an experienced CSO helps to mitigate this risk. CSOs have extensive experience in filtering sales team applicants. Additionally, because finding and hiring sales reps is the CSO’s primary function, they can dedicate more time and resources to finding the right talent.
This helps sort the best talents from the ones that merely know how to get past an initial interview.
Sales rep training is crucial for avoiding potentially disastrous consequences. A sales rep who lacks the training and knowledge of what they should or shouldn’t do during sales meetings or other interactions with both prospects and current customers could expose the company to fines, sanctions, and extremely negative public perception (which can make it even more difficult to secure new business later).
The problem is that it’s all too easy for a busy organization that is laser-focused on producing results to fall behind on sales training—even though training is often necessary to keep sales reps up to date with new industry regulations and best practices.
When working with an outsourced sales service that performs ongoing sales training, this risk can be reduced. With a CSO’s support, sales managers don’t have to specifically worry about setting up a training regimen and holding their sales reps to it. Instead, training can be left to the outsourced sales service—keeping employee skills up to date to minimize the risks posed by under-trained sales reps.
In any industry, it can be hard to find, attract, and retain high-skill talent. The medical sales industry is no exception to this problem.
When sales team members get poached by the competition, age out of the workforce and retire, or leave for any of a variety of other reasons, replacing that talent can be tough. According to data from Glassdoor, the average interview process duration in the Biotech & Pharmaceuticals industry is 28.1 days (22.5 days for Health Care & Hospitals).
The question is: how many sales opportunities get missed during the time spent looking for a replacement sales rep? If a sales rep only meets with two clients a week and has a 50% success rate for closing $15k deals, a 28-day time-to-replace would mean missing out on an average of four deals—or $60k.
By providing instant access to a large pool of talent, pairing the right sales reps with the right companies, and minimizing the delay between opening a position and filling it, CSOs can do a lot to mitigate the risk of understaffing in medical sales departments.
These are just a few of the risks that can be mitigated by using an outsourced sales service. Need help building your sales team? Reach out to Axxelus today to get started!
