The medical products and services industry has an established history of investing in sales force effectiveness (SFE), typically to boost the productivity of companies’ highly experienced field reps, yet some firms struggle to gauge the performance of those investments. Firms may have trouble determining accurate competitor benchmarks because of the medical technology industry’s expansive breadth, with products ranging from basic supplies to highly sophisticated medical technology (with correspondingly different business models). Moreover, SFE encompasses different types of initiatives and different levels of ambition—from small, continuous-improvement activities to more comprehensive transformations—which adds to the challenge of determining a target return on investment.
This is a clear challenge: Sales leaders in medtech know that SFE investments pay off through incremental revenue and profits, but they don’t have clear benchmarks to indicate what success looks like.
To better understand the impact of SFE investments, ZS Associates recently conducted the Explorer Study, a rigorous, cross-industry analysis of more than 800 data points from a wide range of survey respondents; literature sources including academic journals, white papers, trade publications and other business media; interviews with industry leaders; and internal ZS case studies, searching for data on quantifiable gains in performance following SFE investments. The study found that investments in a single sales force initiative can yield an average increase in revenue of 4 to 8% across all industries. For the subset of medtech companies in the sample, SFE investments lead to increases in revenue and profitability of 2 to 8%, meaning that such programs often can pay for themselves, and larger transformative initiatives across several SFE areas can generate even greater impact.
Eric Scott is a manager based in ZS’s Toronto office. Eric focuses on broad sales and marketing issues across Canada and the Americas. Eric is a leader in medical affairs strategy and commercial organizational design. He has helped many clients with maximizing go-to-market strategies through market insight and sales strategy, forecasting and opportunity assessments, sales operations and incentives, and broad business technology solution