Distributor reps cover business but won't sell new. Here's why, and the training, weekly 1:1s, and comp changes that get them selling.
I hear a lot of complaints from Medical Device Distributors that I advise, what would you guess is number 1?
Inventory? Or their relationship with corporate? Or negotiating more points, or a rep threatening to leave if he doesn’t get them?
You’d be close. But you’d be wrong.
The biggest complaint is this: “My reps won’t sell any new business.”
I’ve heard it from nearly every one of the 8 CEOs of the medical device distributors I’ve advised, several of which now rank in the top 10 in the country in their specialty. It shows up in spine, biologics, capital equipment, everywhere.
And the reason behind it is almost always the same:
Your reps don’t sell because they don’t know how and the comp plan is wrong. The shortest path to fixing this is to train them on each part of the sales process and to adjust their comp plans to be based on goals, not just business covered. Longer term, you must instill a culture of accountability by having formal weekly one-on-ones and regular team trainings paired with a comp plan that pays for selling, not just for covering.
Put yourself in their shoes: you get paid for covering business and make a great living doing it. Why would I go and do something that I don’t know how to do, takes tons of effort, and frankly, scares the hell out of me? Selling is hard and working your current business is easy. It’s as simple as that.
Several of my distributor clients have said: “But they’ve been covering business for 3 years, they should know how to sell by now!” Unfortunately, covering cases teaches them to cover cases, not how to sell.
If you’ve never shown a rep how to open a conversation with a surgeon, how to get past the person at the front desk, how to network their way to a warm intro, or how to run a sales dinner, they’re always going to do what’s most comfortable. And what’s most comfortable is covering business.
The other reason is that most distributors pay reps a certain number of points for the business they cover, or at worst, a guarantee. They don’t pay for hitting sales targets. You might tell me that you pay extra points on growth, but without teeth for not growing or making that a large part of their income, it won’t create any pressure to sell. Look at the choice from their side of the table: do something really hard that they don’t know how to do, or go home to their families and play video games and get paid what they’ve always been paid.
Most people choose the latter.
Train them on the sales process, then give them a sales goal with both a carrot and a stick.
Training means teaching the actual work of selling, not just the product. A good sales playbook for medical device reps covers:
Once they’re trained, you need to set a sales goal. The goal can be activity (e.g. set x number of new physician dinners this month) or it can be revenue (e.g. generate $Y in additional revenue from new surgeons, new procedures, or new product). A goal without training is just pressure. Training without a goal is just information. The carrot is more money when they hit it. The stick is a real consequence when they don’t.
Hold formal one-on-ones every week, or every other week at minimum, with the same agenda every time.
Formal is the key word. Windshield time, informal calls, and meetings at the bar don’t count. A formal one-on-one is something that is scheduled, held over video or in person, and follows a set agenda that you track week to week. Usually, both people are actively taking notes.
Here’s the agenda I use:
Don’t skip the coaching. The younger generation of reps thrives on feedback and coaching. One specific piece of praise and one clear focus area, every single week, adds up fast and it keeps small problems from turning into big ones.
A good comp plan incentivizes all the behaviors you want to see. If you want a rep to cover your current business and sell new business, you must design the comp plan so that it’s not too comfortable for them to just cover business.
For instance, if you know that a rep needs to make $150K a year in your market to not lose them, work out how to pay them 50% of that for covering business and 50% for hitting sales targets. If they only cover business, they will only make $75K a year. If they hit their sales targets they will make the full $150K.
If you like to only think in points, you could construct it this way: say you pay a rep 12 points on the business they cover. There’s no rule that says you have to hand over all 12 just for covering it. Pay 6 for coverage. When they complete their sales activity goals for the month, pay the other 6 on that same covered business. Scale down the points if they hit below their sales activity goals: hit 50% of the sales activity goals? Get 50% of the points that month, a total of 9.
The activity goals are yours to set: new surgeon meetings, sales dinners, evaluations scheduled, whatever moves business in your market. The point is that the second half of their income depends on selling.
That’s the carrot. Here’s the stick: if a rep misses their sales activity goals two months in a row, move to formal discipline, such as a performance improvement plan or a performance notice. What that looks like depends on whether they’re a 1099 contractor or a W2 employee, so check with your employment attorney before you roll it out.
An object at rest wants to stay at rest. An object in motion wants to stay in motion. Good comp plans create motion. Tie part of their points to sales activity, not just to the business they cover.
Once you’ve trained a rep and incentivized them correctly, their results will tell you if they can sell.
If the system is working and a rep still isn’t producing, you’ve likely hired someone who isn’t a salesperson. That’s where the hard decision comes in: Do you let them stay as a coverage rep, or do you work them out of the business?
This is a tough decision because of the time and energy you’ve already put into training them. They cover well. The doc likes them. The team likes them.
On the other hand, you need people who can help you grow. For every person you keep that can’t sell, that creates opportunity cost for you: it takes the place of a rep who could sell. Believe me, there are people who can both cover business and sell. If you’re reading this post, you’re probably one of them (you wouldn’t have become a distributor if you weren’t!).
When I ask principals about the biggest problems in their business, it almost always comes down to one or two people they need to manage out. Making that call is only half the job. The other half is making sure you don’t make the same hire again. The trick is hiring and finding the right people.
You get to work on the business instead of in it.
When you have reps who can close and run new business acquisition on their own, your job changes. You spend your time hiring, training, selling, adding new products, and keeping customers happy. That’s the work that grows a distributorship.
Target surgeon research, openers for surgeons and front-desk staff, discovery questions, objection handling, networking for warm introductions, a sales dinner process, a weekly one-on-one agenda, a pipeline tracker, and monthly sales activity goals tied to comp.
Weekly, over video, with a set agenda. Every other week is the minimum. Ride-alongs and quick calls are useful, but they don’t replace a formal one-on-one.
Yes, if the goals and the comp tied to them are written into your agreement. How you handle discipline or termination depends on the contract and applicable law, so review it with an attorney.
Ready to start? Download my one-on-one guide and rep pipeline tracker. It’s one spreadsheet: my weekly one-on-one agenda on the first tab and the standard pipeline tracker I use with distributor teams on the second.
Download the one-on-one guide and rep pipeline tracker
Chris Leithe is the founder of Leithe Labs and a strategic advisor to medical device distributor principals and high growth CEOs. The medical distributors he advises are responsible for almost $200MM in revenue and several are in the top 10 for their manufacturers. Before that, he helped scale ShareFile’s sales team from 30 to 300 and helped grow Adwerx from $10MM to $27MM in revenue, and built the sales process for an SF based healthcare tech company that sold to PE for $200MM. Chris primarily advises medical distributors, tech companies, and services companies on revenue growth and leadership.
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