How you allocate and align one of your most costly and precious resources—the sales force—can make or break your company’s success. Continuous alignment is a process by which a company continues to optimize coverage of key accounts by keeping its sales force assigned to the right customers. It helps ensure that those with the most potential get the best and most experienced reps to service them despite personnel attrition, customer preferences and changes in the marketplace. Yet some medtech companies today have limited alignment capabilities and expertise. Most alignments are done at a geographical level, with all accounts in a territory going to the same rep or team of reps. Many update their sales force alignments only once a quarter, and some use rudimentary tools like Excel or a very basic, inflexible, hard-to-support homegrown system.
In today’s evolving healthcare ecosystem—shaped by the ongoing integration and consolidation of healthcare delivery, and the rise of integrated delivery networks—no medtech company can afford to have geographically based, homogeneous alignment frozen for months at a time. As customers change and consolidate, the sales force needs to adapt through the redeployment of reps and the creation of multifunctional teams to service these larger, more complex accounts. Without the right tools, medtech companies lose out on the agility needed to adapt to the changing landscape, or are stuck responding to countless ad hoc requests, creating a burden on the sales administration team.
In addition to large marketplace shifts, there are also smaller but constant changes that sales organizations needs to keep up with: doctors move and retire, new customers appear, reps leave and vacate territories. All of these changes need immediate actions—new rep assignments and territory re-evaluations—that may need to happen manually or automatically based on established business rules. These changes should also spread to sales compensation, CRM and reporting systems as soon as possible to give the newly assigned reps information to be successful with the customer.
Those companies that try to keep up with basic or Excel-based processes and systems face a lot of manual effort, data issues and redundant work. It may take weeks or months to collect alignment requests from the field and translate it into the right feeds for all of the downstream systems, and the data may become outdated before headquarters has an opportunity to load it. Data issues continue to pop up in CRM, reporting and—most damagingly—compensation statements. Reconciliation of the data between systems takes a long time, and the field’s trust is lost in the process. Even simple questions related to alignments in past periods are sometimes impossible to answer with certainty.
Luckily, there’s a solution. Medtech companies have an opportunity to automate their alignment management in the same thorough way that they’ve automated their supply chains and ordering systems. A well-thought-out combination of people, processes and tools can create a modern and robust alignment management capability.
From the people standpoint, it’s important that companies have people who can monitor the marketplace, perform optimization analytics and set alignment guidelines for the company and the field. It may be just one or two people, but they need to have the right expertise—and they can’t be too fragmented—in order to make sure that they have the time to focus on the deployment analytics and monitoring.
On the process side, companies should develop guidelines on the sales roles required to cover each type of customer. They should define the right number of reps based on sales in a region and the expected ROI from each type of rep. Companies would need to monitor these metrics at headquarters and within the field to collaboratively optimize deployment.
Finally, your alignment management technology should have a number of critical attributes to enable people and processes to keep the sales force current and optimized. Here are four:
- It should have a rich and intuitive user interface, enabling field and headquarters to look at customers both geographically and based on affiliations and influences. It should help evaluate and align IDN-influenced hospitals or other large accounts holistically with all of their affiliated hospitals, doctors and practices, and suggest the alignment changes with those relationships in mind. It also should provide robust decision support on the size, potential and other aspects of the customers—however big or small—so that the right team and roles can be assigned to every customer.
- It should allow for a decentralized field alignment capability that brings local knowledge into consideration and enables the field to collaborate with headquarters for continuous optimization. It also should have a robust workflow and guardrails to ensure strong alignment between local decisions and company strategy.
- It should allow dynamic alignment changes to happen frequently, if not every day, and also allow these daily alignment changes to seamlessly propagate into sales compensation, reporting and all other enterprise capabilities.
- Most importantly, alignment tools should enable robust alignment analytics and decision support to help the field and headquarters make optimized alignment decisions. Moreover, they should seamlessly integrate with and enable the larger analytical capability, helping the company make decisions ranging from forecasting, inventory management and contracting to talent management, training and vacancy predictions.
This new alignment capability would surely require a non-trivial investment, yet the payback is significant. From a revenue standpoint, our research consistently shows that territory optimization can boost revenue by 2 to 7% for non-commoditized, differentiated medtech companies. Keeping the field continuously optimized will sustain this benefit for long periods of time.
On the cost side, a fully automated and integrated alignment system can reduce manual labor in the field and at headquarters. One medtech company rolled out the centralized alignment system based on the principles described above, and not only did alignment management become more transparent and easy, but it also enabled one central person to do the job that used to take five alignment analysts in different business units. The automation eliminates errors in internal data handoffs and updates the alignment that’s reflected in Salesforce.com and other systems overnight.
Medtech companies can no longer afford to neglect their alignment management capabilities. Both the need and the business case overwhelmingly require an upgrade in people, processes and tools—and the sooner, the better.