As we come into business planning season for many companies, I’ve had a few conversations recently about building up direct sales forces. If you want to grow your sales, you need more “feet on the street,” yes? And the best way to ensure success is to make them your own employees, right? Not always.
Consider the following situations:
- You are carefully targeting your highest potential customers, and are covering 10% of the potential customer base.
- Your business is well-established in the main European countries. Now you are looking to expand geographic coverage in Russia, Poland and Turkey.
- You are rapidly growing your U.S. business but need to provide training for each new patient starting on your implantable device.
- Your company sells surgical products to hospitals. A new product will be sold to wound-care specialists in hospital and primary care.
- You need the flexibility to increase or decrease promotion quickly depending on a key clinical trial outcome.
- Your business is well-established in Western and Eastern Europe, and you are now looking to enter the market in the Middle East.
- You have a new product with benefits over the current market leader. Product messaging and positioning of value will be critical for success.
In the last example, a direct sales force is probably the best way to win in the market. But in all the others, options other than a direct sales force are much better suited to delivering what you need. A contract sales team can give you fast flexibility: access to people who are already trained in the art of selling, already screened and available for a point-in-time need. It is often worth giving up some margin to a distributor in order to gain local know-how or access to a new market. They can also sell complementary products that can give them fast access to a specific type of customer, such as a sports medicine surgeon or a diabetes specialist. Is sales promotion needed at all? Some products are sold very successfully through an online catalogue with no sales force at all. If a product is really ubiquitous, or if there is a robust contract in place and reps don’t need to drive pull-through, then there are better and cheaper ways to drive sales.
So before you start fighting for resources and scanning résumés to build your in-house sales team, think about what you really need. If you need …
- … Control over the selling process, product messaging and price, then consider using agents or building a direct sales team.
- … Immediate local access, know-how and responsiveness, then consider using distributors with complementary products.
- … Broad geographic coverage, then consider inside sales (telesales) or distributors to fill in the holes.
- … Services, either ongoing or start-up surge capacity, consider contract organisations.
- … To give your customers access to a broad portfolio, consider a Web-based model with online ordering.
- … Access to existing customer relationships, consider agents or distributors.
- … To extend market coverage at a lower cost, then consider inside sales.
A direct sales force is not the only answer, and in many cases it’s not the best answer.
Look out for a future post focused on inside sales!