7 min reading time

A group member wrote saying he’s developed a first-of-its-kind medical device – one that would require a large capital investment from physician offices.

He established distribution with two large national distributors and has reimbursable CPT codes.

But he’s concerned distributors won’t commit to a longer sales cycle and or develop the ability to sell his intricate concept.

Have you had a similar experience at any company at which you’ve worked?

How did you overcome it?

He’s already offered in-depth training, online support, and detailed collateral.

How can he supplement or improve his chances for success?

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Discussions

Medical Device Access in developing nations?

Does Class IIB in Europe equal Class III in Canada?

How list device if you don’t manufacture, only sterilize?

Which certifications do device companies/manufacturers value in their employees?
http://bit.ly/which-cert-to-get

ISO 13485 Certification

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It’s (finally) election day in the United States. Wish us luck.

The U.S. Election, Device Tax, and Industry Outlook

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Make it a great week. Go and vote!

Joe Hage
Medical Devices Group Leader

P.S. I encourage you to register at http://medgroup.biz/MDG-SITE for special announcements from the Medical Devices Group.

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Robert Phelps, MBA
Cofounder & COO at Access Strategy Partners Inc
Would you have more details to share concerning the prevalence of the disease to be treated, how is it treated now, is this a device and procedure requiring a doctor and another person or is it a solo procedure, financial details on the equipment and reimbursement, is it a single treatment or multiple and is the doctor treating this condition today or is another specialty? This info would help to frame this so as to provide a reasonable guidance for him.

Douglas Reich
Deep-Dive Problem Solver & Business Strategist
Just a thought – does his business model necessarily require that large capital investment? Can the product be financed instead?

Kumaravelu Palanivelu
Solutions configuration >> Business Development >> Project Management / Implementation of solutions >> After-sales Support (PMP-certified since 2009)
My 2 cents worth…

1. People need to feel the product to realize it’s benefits especially when it’s a heavy investment.. Conduct POCs or Trials with interested prospects.. And these POCs / Trials should be done with no investment of money from the prospects but have clear objectives where it’ll require them to invest time and effort. That way, they’ll appreciate the gesture and also reciprocate.

2. Hire a healthcare professional who understands the benefits of the solution and will communicate in a language comprehensible for the buyers..

3. Identify the exact challenges that this solution will solve in the healthcare scenario and aid the end-users to “sell” to the management..

4. Do not depend on the distributors unless they have the same level of passion and drive as you do.

Martina Lee
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As a health care clinician (nurse for 28 years) I suggest you hire a consultant familiar with healthcare environment to help initiate and hire consultants to represent products . The healthcare industry relates almost on a different language system. I found it challenging working with sales representatives that did not understand the health care environment . Yes, hire the sales force…then hire a health care professional to help implement, teach and represent product daily with healthcare environment product implementation.

Mark C Adams, MBA
Medical Device Leader/Executive
My very first job in medical sales was selling capital equipment into private Ob-Gyn offices. I was rookie of the year and it taught me amazing things about delivering value into physician’s lives . Distributor sales have many slippery slopes. I’d be happy to share one-on-one.

Modesto (Mo) Casas
Increasing Worldwide revenues
Well, Joe… there you go again, with a very good question. When developing complex technology companies with new products and into new markets, I have seen this problem many times. Categorically:

Have you had a similar experience at any company at which you’ve worked?
Yes. It is common with complex solutions and new product ideas.

How did you overcome it?
The inventor or founders have to do the heavy selling themselves. They need to present the products until they have a handful of users. The process will give them direct customer feedback and the ability to make changes that simplify the presentation of the product’s value proposition. Direct contact builds credibility with the potential customers, establishes a direct line of communication and builds a bridge for the first sales.

The two other questions continue in Comment 2
He’s already offered in-depth training, online support, and detailed collateral.
How can he supplement or improve his chances for success?

Modesto (Mo) Casas
Increasing Worldwide revenues
Comment 2
He’s already offered in-depth training, online support, and detailed collateral.
Training, support and sales materials will help once the first customers are developed. Customer feedback and a clear value proposition will improve documentation. Initial sales will motivate the independent reps.

How can he supplement or improve his chances for success?
1. Create a clear customer profile for the reps.
2. Create a handful of qualification questions for the reps to use.
3. Provide the rep with a clear value proposition for the target customer profile and Q&A that they can use.
4. Demand personal calls to potential customers by the rep. New complex products require interaction.
5. Have a weekly 15 minute update with each rep.
6. Adjust the questions, presentation, value proposition based on feedback.
7. Personally visit best prospects with the rep.

Never sell a complex product by email or social media. Feedback FROM prospects is more important than presentation TO prospects.

Mark Beran
Chief Marketing Officer at Encompass Group, LLC
Elizabeth Hilla I completely agree with your assessment. The distributor is usually better at front end of the funnel activity. Make sure they have the right tools to validate a need for the product. The manufacturer needs to provide the resources.

Denise Clarke
Life Science Strategy Consultant at ClearView Healthcare Partners
There are ~100 million physician office visits a year in the US. ~65,000,000 in patients >55 (CDC, 2012 stats). There are ~100,000 group physician practices (2+ physicians) which leaves us with about 650 patients aged >55 per practice. Testing 300-500 patients per year would entail capturing 45-75% of all eligible patients. The potential for this depends on how “intricate” or complicated testing and staff training is, the impact it would have on the physician office workflow (and current SOC) and how prevalent the condition he is screening for is in this population. It’s great that he has reimbursement in place. I wish him lots of success.

Luke Liem
Business Advisor at Voyager Space Technologies
With reimbursement at $60 per procedure, the key is to help the disti rep identify the sweet spot – the physicians with the highest economic incentive to adopt the equipment. These are typically specialists who can convert around 300-500 of their patients to this procedure yield $18-30 of annual revenue on an annual basis.

So instead of waiting for the disti reps to figure this out for themselves, be proactive and hand them a lucrative business instead.

Richard Whitehead
Senior Software Developer at BrainMiner
If you can find a few Key Opinion Leaders who will evangelise your product to others then there is likely to be more demand and so more interest from distributors.
As well as purchase and lease options, consider offering lease-purchase, whereby the bank pays you up front while the clinician pays off the loan until eventually they own the machine.

Norman Niven
Chief Executive, Protelhealth Limited
Just a suggestion ……try developing a product that is less expensive, easier to use and can be sold on-line…..simples

Dave McCoy
Engineering, management, and I.T. recruiting, advocate, coach, and golfer.
I’m not sure if this is what your colleague is looking for, but it sounds like your friend could employ an educational sells technique to engage his audience. I’ve used this technique on complicated service sells that are new to the market. I’ve included a good article illustrating this point. http://www.bloomberg.com/news/articles/2007-10-08/education-based-marketing-sellsbusinessweek-business-news-stock-market-and-financial-advice

Aaron Korngold
Chairman at Healthcare Acquisitions,Inc.
As a long term investor, i believe asking a physician for upfront cash is a non- starter.

John McIntosh
GuidePro3D.com
Yes I have done, this he must make sales on his own or dis will not have confidence .

Elizabeth Hilla
Senior Vice President, Health Industry Distributors Association
I’d be happy to talk to him directly and share what I hear from distributors about what they can and can’t do well and what strategies might increase their chances for success. A lot of pieces need to be in place to get distributor reps to sell a new thing, especially one that is expensive and complicated — the right financial incentives, a simple process for qualifying leads, sales support once they find the leads, and so on. The most successful arrangements usually don’t require the distributor rep to do everything from prospecting to closing, but rather to be the eyes and ears in accounts, with the manufacturer (or perhaps highly-trained independent reps) available to help with demos and closing to qualified prospects.

Joe Hage
🔥 Find me at MedicalDevicesGroup.net 🔥
From the group member:
“The list cost is 30K. We offer lease and typical lease is $600 per month. Reimbursement is around $60 per test. Every patient over the age of 55 can be tested and reimbursed. The ROI is very attractive…”

Tony Moses
CEO at Eyecheck LLC
If the group member already has 2 large distributors locked up, I am
interested in learning of the initial sell through. Has the sales process
yet begun? Asking physician groups for a large upfront capital investment
in these days of continuous cost containment may well portend to a
difficult road ahead for this company unless they can show an inertia from
the beginning days of launch. Also, having dealt with distributor networks
over the years, I am aware of the fact they will sell what is most
profitable for them on any given day (time to close + ease of sale – sale
price = profit)

Andrew Rapacke
Managing Partner at The Rapacke Law Group, P.A.
Joe, One recommendation that I would provide to your colleague is to protect any intellectual property associated with the device (i.e., apparatus). The most likely form of protection would be with a utility patent. However, if the invention has been disclosed in the public domain for over 12 months, he/she will be barred from patentability. Please keep in mind that one reason distributors are likely reluctant to enter into a long-term agreement is that without a patent there is no mechanism to enforce the exclusive rights in the device. Also, there is nothing that ensures distributors are not going to be “buying into” potential litigation if they do offer an Agreement without any form of intellectual property protection.

Scott Wertz
President at Rocky Mountain Settlements
My firm has financed medical equipment for 25 years. Some of our manufacturing partners have asked the same question. The result for a few was to design a pricing model that better fit the customer’s needs. For example we worked with a vendor who manufactured a dispensing machine. It was very expensive compared to what their competitors did but it would save money in the long run for its customers through its protected inventory control system. We altered the pricing structure from a capital purchase to a subscription program and the profitability of the company soared because the end user better realized the value of the equipment and didn’t have to overcome the initial capital commitment. In this case, perhaps there is another way to shorten the sales cycle to motivate his distributors. Its possible financing could help.