Where It All Began:
I started my career; in sales. And I think that when you have been a salesperson, you will always be a salesperson as that has been my experience.
If you work as a marketer or are considering the role, then having a background in sales will help you understand the customer and the challenges of the sales force better.
It is also necessary to understand the various sales models in successful marketing, as; it can help you yield far more sales conversion.
That said, here is an easy guide to what you should know about the various salesforce models:
The Profit Driving Force Of The Company
When discussing direct, indirect, and hybrid sales models, I like to use the term “salesforce,” instead of “channel” in describing them.
Though; it might be seen as semantic fussiness and probably is not 100% correct; since salesforce; is normally used; for a direct sales model.
However, I like “salesforce” because it includes the word “force,” which creates a direct connection to the influence of the company.
The sales force is one of the main drivers of profitability for a company, and in a customer-oriented company, it must be one of its core capabilities.
SalesForce: The Key Touchpoint In Driving Sales
In today’s world, there are plenty of touchpoints with customers and prospects, which includes: website, congresses, word of mouth, advertising, training, KOL, scientific articles, inbound marketing, digital marketing, etc
The sales force is the key-touchpoint with the customer and for sure the most expensive one; despite this, the sales force must be seen as a worthy investment and not as a cost or liability.
Likewise, the decision among direct/indirect/hybrid models and high touch/low touch sales force is an essential part of the go-to-market strategy. And it is influenced by the company’s business model, products, financials, and the target market.
Having said these, here are further insights into the types of salesforce:
Direct, Indirect, Hybrid SalesForce
The direct sales force: comprises sales representatives and, if required, other professionals who are directly in contact with the customer.
Coupled with that, the manufacturer needs to establish a customer service to support, the distribution of the products sent directly to the end-user.
The indirect sales model: Here, the manufacturer sells the products through a third-party (distributor), and the sales reps of the third party represent multiple companies.
The hybrid sales model: This model can have different forms, and it involves a combination of direct sales force and distributorship.
An example is when a distributor is supported by product specialists or a distributor and direct KAM, who are all dealing respectively with small and medium-size customers and big customer and buying groups.
High Touch SalesForce And Low Touch SalesForce
A high touch sales force is similar to the milkman commercial model, and it is required when the product is complex.
Also, in this division, users need support and training, and the selling process is lengthy.
The Low touch sales model focuses on reducing the face-to-face interaction during the buying process; by simplifying the process to reduce the cost of acquisition.
Some of the med-tech giants are implementing a gradual transition toward a low touch sales force for product lines that require less customer interaction.
And a prerequisite is that the sales model implemented in the specific market must be able to manage the prepurchase, purchase, and postpurchase stages of the buying process.
Also, different markets can have a different buying process or different segments within the same market. That is, public and private markets; can have a different buying process leading to some trade-off on sales model choice.
SalesForce Models In Medical Device
In medical devices, certain business models tend to be associated with specific approaches, although in this case, as in others, miraculous recipes do not exist.
Highlighted below are some of these instances:
Disposable commodities (medical supply): are usually low-priced and undifferentiated products such as syringes, gloves, gowns, masks, etc; and are sold through a low-touch sales force (direct or indirect).
Since the products are simple, sales effort is limited, and the sales process is administrative driven.
On the other hand, Disposable high-value medical supplies, such as vascular products, ablation catheters etc. Due to high prices, product complexity, and customer support required; are managed by a direct sales force.
Capital equipment such as MRI, TC, PET, robots, etc… are managed by a direct sales force because of the long sales cycles that require essential sales effort and specific sales skills; moreover, because the sales volume is low, the size of the sales force needed is small.
High-value implantable products such as pacemakers, cardiac valves, hip and knee implants, cochlear implants, etc generate high margins and require a knowledgeable and specialized direct sales force to support and manage the product adequately.
Moderate and low-value implantable devices, due to the low margins and the low complexity, are distributed with an indirect sales force.
Reusable products such as surgical instruments, depending on the margin generated and volume, are sold through an indirect sales force that could be low-touch or more specialized according to the product characteristics.
Conclusion
The decision as regards; the optimal sales model is not always black or white- not so easy to differentiate.
Hence for further clarification, in my next post, I will provide more information on the factors to be considered when deciding on a sales approach.