MedTech + Mindset Newsletter #042

Welcome to the MedTech + Mindset Newsletter!

I've been thinking about how to get the most out of your sales representatives and ensure they are rewarded and give them the incentive to take you to the next level.

It's time to talk about a little Medtech...

and a little Mindset too....

What motivates a medical sales rep to push as hard as they can for your company?

Insight from Matt Tucker  

Sales reps in the medical device and medical products industry are driven by more than just money. Let's face it, assuming that they're only motivated by cash is short-sighted and foolish. Sure, financial incentives are a critical component, but they're not the only game in town. Here are some examples of what really motivates reps:

• Financial incentives: Sales representatives in the medical device industry are often highly incentivized through commission, bonuses, and other financial rewards. These incentives can be tied to achieving sales targets or other performance metrics, and can be a significant motivator for sales reps.   
• Advancement opportunities: Sales reps are often motivated by the opportunity for career advancement and professional development. Offering training programs, mentoring, or coaching can help them develop new skills and advance their careers.   
• Work-life balance: Sales reps in the medical device industry often work long hours and are frequently on the road. Offering flexible schedules, remote work options, or extra time off can help them maintain a healthy work-life balance and feel more motivated in their work.   
• Impact on patient care: Many sales reps in the medical device industry are motivated by the ability to help patients and improve patient care. Seeing the impact of their products on patient outcomes can be a powerful motivator. By contributing to improved patient outcomes, sales reps feel a sense of fulfillment and purpose in their work, which can drive them to succeed.   
• Recognition and praise: Sales reps in the medical device industry often work independently, and can benefit from regular recognition and praise for their achievements. Simple acknowledgments of their hard work and success can go a long way in making them feel valued and motivated.   
• Competitive environment: Sales reps in the medical device industry often thrive in a competitive environment. They may be motivated by the opportunity to outperform their colleagues or competitors, and to achieve top sales rankings or other recognitions.      

Simply put, reps are human beings with complex motivations. Recognizing and leveraging these motivations is key to creating a highly motivated and successful sales force. So, stop thinking of your reps as money-grubbing robots, and start designing compensation plans and incentives that speak to their full range of motivations.

Hey, awesome, but what are the top considerations when developing a comp plan?

Insight from Matt Tucker  

Top 5 considerations when developing a compensation plan:

1. Align with company goals: The compensation plan should align with the overall business goals of the company. For example, if the goal is to increase market share, the compensation plan should incentivize the sales team to focus on increasing market share.
2. Reward high performers: The compensation plan should reward high performers who exceed their targets. This will motivate the sales team to strive for excellence and increase sales.
3. Balance fixed and variable pay: The compensation plan should balance fixed and variable pay to ensure that sales reps are motivated to achieve their targets while also being compensated for their time and effort.
4. Protect against extreme downside or upside: The compensation plan should protect the company against extreme downside or upside by incorporating caps and floors on commission payouts.
5. Regularly review and adjust: The compensation plan should be regularly reviewed and adjusted to ensure that it remains competitive and aligned with the company's goals.

And the winners for best compensation options are?

Insight from Matt Tucker  

Two best recommendations on how to structure sales force compensation: 

Option 1:   Commission-based compensation: Commission-based compensation is a common structure that rewards sales reps for achieving sales targets. The more sales reps sell, the more commission they earn. There's a direct correlation between what the reps sell, the money they make, and the revenue the company is able to drive.  It's the perfect synergy. 

Positives: 

• Motivates sales reps to sell more 
• Aligns with company goals 
• Ties pay to performance 

Negatives: 

• May create a focus on short-term sales instead of building long-term relationships 
• May lead to cut-throat competition among sales reps

Option 2:  Salary plus bonus: Salary plus bonus is another common compensation structure that provides a base salary and a bonus based on performance. This makes sure sales reps achieve their targets and also provides some guaranteed income. 

Positives: 

• Provides a guaranteed income 
• Incentivizes sales reps to achieve targets 
• Encourages a focus on building long-term relationships 

Negatives: 

• May not be as motivating as commission-based compensation 
• May be more difficult to align with company goals 
• Bonuses may be perceived as entitlements rather than rewards for exceptional performance. 

THANKS FOR STICKING IN TILL THE END...NEXT WEEK I'LL TELL YOU HOW TO BUILD THE PERFECT VARIABLE COMPENSATION MODEL...BOTH A STRAIGHTLINE AND A TIERED MODEL.

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That's it for this week.

 — Your Friends at the M+M Team.

 
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