When ASC 606/IFRS 15 was introduced, it not only shook the accounting world at that time but it continues to have reverberations across entire organizations even today. Companies reporting under the US GAAP or the IFRS accounting standards have had to go to great lengths to adapt their internal processes, with one area proving particularly challenging: commission expense accounting. Years later, challenges still persist for organizations trying to maintain compliance with these standards. Here, we outline 5 specific actions your organization can take to make compliance easier.

Aggregating sales commission data and identifying eligible contracts with customers are just some of the challenges that CFOs, accounting/finance specialists, and even sales operations professionals have struggled with in this area. And many are still struggling today.

What to do? To identify the right solution, we need to get a good understanding of the problem first. Let’s start with a brief overview.

ASC 606 / IFRS 15 overview: purpose, impact, and risks

In 2014, diverging areas of the US and international revenue recognition standards prompted the FASB and IASB to amend and converge their guidelines. The new ASC 606/IFRS 15 went into effect in 2018 for public companies, and 2019 for private ones. Their aim is to reduce financial reporting inconsistencies across industries and globally. This, in turn, ensures more accurate financial performance assessments of companies within and across industries.

Under ASC 606 / IFRS 15, organizations that pay commissions on revenue generated from contracts – other than insurance and lease contracts, and financial instruments – need to capitalize the incremental costs of obtaining a contract at inception, if the contract’s duration is longer than one year.

In other words, the associated commissions paid to salespeople can no longer be treated as a one-time expense. Instead, they must be treated as an asset that gets amortized over the duration of the contract. Importantly, the duration of amortization will vary depending on whether the contract is reasonably expected to be renewed.

Now, if a company fails to correctly recognize sales commission expenses under the amended guidelines, it may need to restate its earnings. This increases the risk that investors or customers will doubt the credibility of the company’s financial reports.

Likewise, at an operational level, if a company lacks visibility into contracts and associated sales commissions, it may not be able to systematically identify those that are eligible for amortization. This leads to inefficient and inaccurate accounting practices, making it difficult to comply with the new regulations.

Compliance is a shared responsibility

To mitigate these risks, multiple groups in the organization need to come together and understand how they can best support each other’s work under these regulations. From Finance to Sales, various roles need to join forces to ensure a seamless commission expense recognition management process. For example:

Compensation administrators

• Must be able to identify contracts that span a period of more than one year.
• Equally important, they must be able to differentiate between commissions paid to sales reps as opposed to supervisors, as they may need to be treated differently.

Sales Operations managers

• Need to ensure access to detailed revenue and commission data at the customer, contract, and product level.
• Above all, they need to ensure that compensation plans continue to motivate the right sales behaviors, as opposed to changing plans to make accounting easier.

Accounting / Finance managers

• Must be able to trace amortized expenses back to contracts and track changes in assets over time.
• In addition, they should ensure an auditable system of record.

CFOs

• Must ensure an accurate accounting of commissions expenses, and a cost-effective auditing process.

The real compliance problem

Coordinating roles and responsibilities under these new regulations is difficult, but manageable. The real problem that many companies have not yet solved is equipping everyone involved with the right tools to streamline the process. As a result, they still struggle with:

• Failure to correctly account for contracts and associated sales commissions;
• Lack of visibility into contracts and sales commissions that are eligible for amortization;
• Reliance on spreadsheets and manual processes to track sales commissions, which lead to errors and miscalculations.

5 key actions to take NOW to ensure a seamless ASC 606 / IFRS 15 compliance process

So ASC 606 / IFRS 15 compliance has proven to be a bear for many companies. But it shouldn’t be. Here are 5 key actions organizations can take to overcome compliance hurdles:

1. Encourage solid partnerships between sales operations and accounting/finance teams and clearly communicate about everyone’s role in this process.
2. Assess compensation, accounting and auditing practices, and internal controls, and update necessary systems and processes.
3. Evaluate the ability of your systems to capture granular data and report amortized commissions in accordance with the new regulations.
4. Determine the amortization method and analyze existing contracts to estimate their duration if they’ll potentially be renewed for an anticipated amount of time.
5. Choose a business process automation solution that automates the commission expense recognition process, effectively addresses governance and compliance challenges, and ensures proper auditing going forward.

Learn how the Optymyze solution for Commission Expense Recognition (ASC 606 / IFRS 15) automates key business processes to ensure compliance with accounting standards. 

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No-code/low-code development has been around for a while, acting like a disruptive force across IT. However, as disruption triggers innovation, more enterprises have started to realize the advantages of using no-code/low-code solutions to fuel their digital transformation.

Not surprisingly, a recent industry report forecasts the low-code development platform market size to reach $46.4 billion in 2026, at a compound annual growth rate of 25%. The same industry analysts highlight numerous partnerships, mergers and acquisitions, product launches and expansions occurring amongst notable market players within this space.

Despite its rising popularity—or perhaps because of it—some common misconceptions still persist. Perceived downsides of limited no-code tools may have had some truth initially. However, now that the market has matured and several new competitors have flooded the space, there have been considerable improvements to no-code options. 

Still skeptical? Let’s further explore these 4 common misconceptions:

1. No code (or low code) is only made for building end-user applications  

No code is not only about building applications. Although, yes – there are more options to choose from if you’re simply shopping for a no-code application builder. However, there are veritable no-code or low-code solutions that perform other enterprise functions such as data warehousing; analytic data processing; and modeling and planning. In fact, it is likely that these are the market areas that will continue to grow and innovate in the next couple of years. 

Below are key players in the enterprise functions where no-code or low-code development has proven to work and to be a crucial game-changer for businesses—especially those struggling to find enough development and IT resources or wanting to better leverage their citizen developers. 

The “declarative programming” concept – telling the software what to do, instead of how to do it –that is embraced in a no-code development platform applies to any enterprise function. It is this declarative programming that drives no code’s signature speed and ease of use, providing endless options.

2. No code is anti-developer

No code may leave traditional developers feeling skeptical and perhaps even underappreciated.  There is certainly tons of press circulating about all the benefits of having citizen developers do work they used to perform. But most traditional developers should be self-aware enough to see how no-code development innovations benefit them.

There are voices suggesting that developers will organically shed their menial duties and take on the more advisory and strategic roles. Citizen developers will perform the easy tasks, while traditional developers’ work will be elevated to more specialized challenges: governance, security, compliance, and oversight of the change management processes.

With this organizational model, traditional developers will be able to increase their contribution levels, their value, and their pay.   

3. No code cannot scale; no code cannot handle big data

Not all no-code players are the same – some are able to handle big data, others not so much. So during the procurement process, it’s important to ask whether the solution you’re assessing is able to scale and handle big data needs for today and for the future. After all, it’s well known that big data is the future, and any no-code solutions that cannot handle large data sets run the risk of becoming obsolete. 

However, the question is not just about how much data the no-code development platform is able to store and process. It is also about how easily the platform integrates with an organizations’ existing data sources. Most companies have siloed data that exists in several other enterprise applications or legacy data systems. So a no-code platform that allows for easy data ingestion from various sources will certainly benefit them.

The best no-code platforms today offer built-in data integrations or some fast ways to ingest data in real time, as opposed to others that outsource the integration piece to third-party tools – an approach that, more often than not, creates additional work and challenges.

4. No code is inflexible  

As enterprise buyers evaluate a purchase, they also assess potential risks associated with any new enterprise solution. One common concern is getting stuck with an inflexible platform that does not cater to additional, unique needs that might arise in the future.

Fortunately, there are development platforms that are either 100% no code and flexible, or feature a combination of no-code setup standards and custom coding options. This means they allow for the possibility to interject custom code if and as needed.

These development platform companies have recognized the value of the 80/20 rule, and successfully implemented it. They have built no-code standards to address the needs of approximately 80% of the buyers without any customization and have also accounted for potential custom needs that 20% of the buyers might have.

There are no-code custom platforms that provide setup choices that allow for an unlimited number of no-code options to address custom needs. And there are hybrid ones that come with a combination of no-code and low-code setup choices that only present options for coded customization where necessary.

Development platforms that offer no-code standard options and no-code custom options are best equipped to address any requirements an enterprise may have now or in the future. These are the ones that allow you to choose out-of-the-box solutions, without being “stuck in the box” all the time.

Now, it’s time to put these misconceptions behind and make the most of the advantages that no code has to offer. Learn how Optymyze enables today’s enterprises to successfully reach their digital transformation goals.

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When salespeople don’t perform at their best, leaders often point fingers at sales compensation or strategy – but these sorts of problems often stem from the company’s sales structure. Though it’s very important to craft a complex sales force structure that supports company growth, 9 out of 10 sales organizations are struggling to find the sales structure that best suits their particular needs.

Practically speaking, most organizations use some hybrid of the sales organization structures I’ll outline here, with sales force size and market segmentation serving as prime considerations. Every sales force structure has its own set of pros and cons, so it’s important to form a structure that supports your company’s goals.

Geographic Organizational Structure

This is also known as territorial sales force structure, and it means that the organization assigns each sales rep to a certain geographic area.

Advantages:

• Low cost
• Proper territory management leads to low geographic duplication of effort
• Low duplication of effort with customers (unless buyers are organizations that cross territories)

Disadvantages:

• Sales reps have a hard time developing product or market specialization (unless the organization commits to specialized sales forces allocated by geography)
• Territory sizing can be a challenge, resulting in uneven revenue/opportunity across geographies

Product Sales Force Structure

In this alignment, the sales force’s area of responsibility is defined by the products or product groups, ignoring geographical lines.

Advantages:

• Sales reps develop product expertise
• Management can guide selling efforts

Disadvantages:

• Higher costs due to duplication of efforts within geographies and customer accounts
• Coordination required when more sales reps have the same geography/accounts

Market-Based Structure

This is also known as customer sales force structure, and it means that sales reps are grouped by customer or industry.

Advantages:

• Sales reps understand the needs of their customers and build stronger relationships
• Management control can be strategically allocated to different markets

Disadvantages:

• Higher costs
• Geographic duplication

Functional Structure

In this structure, responsibilities are divvied up according to everyone’s place in the sales process – inside sales, account managers, product specialists, and so on.

Advantages:

• More efficient selling activities

Disadvantages:

• Geographic duplication
• Customer duplication
• Greater need for coordination

Your Company Needs the Right Sales Structure

According to a Harvard Business Review survey, high-performing sales organizations have well-documented and explicitly structured sales processes. A clearly documented sales structure helps streamline the chain of command, and the increased transparency leads to more efficient decision-making.

Selecting the right sales force structure and documenting it thoroughly provides a host of organizational benefits:

• Clarity of responsibilities across roles: sales reps know what responsibilities they have for different product lines and markets
• Stronger coordination and communication: mobility for sales forces and increased time for actual selling
• A more knowledgeable sales force: top sales reps are willing to share know-how
• Improved decision-making transparency: sales managers share information on a regular basis and get faster buy-in when making changes
• Reduced channel conflict and increased engagement: fewer disputes over new opportunities, more engagement towards achieving sales goals

Now you’re ready to start building the unique sales management structure that best fits your organization – helping you improve performance, adapt your sales compensation strategy, and drive sales growth.

Looking to boost your sales team’s performance? Optymyze enables you to drive sales performance with sales commission, territory, quota, and objective management.

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A good incentive plan brings the sales team together to work toward a common goal while fostering a friendly atmosphere and healthy competition. Ideally, incentive plans should promote a desired behavior or result, but sometimes they miss the mark. It may be because they are lopsided, lack any genuine motivational element, or are simply uninspiring.

Sales managers and leaders are responsible for creating an effective incentive plan, and the key to it is rewarding the right behavior. Incentive programs are either monetary or non-monetary. The monetary programs are quite straightforward, as they are designed to reward certain behavior. The non-monetary incentive plans are more suited to increasing motivation, team bonding, and at times, employee retention.

Keys to a Successful Sales Incentive Program

A few things to keep in mind while developing the right incentive plans for your organization:

1. Incent the behavior, not the result. To measure your employees’ performance versus their effort, tie their behavior to the incentive plan. For example, salespeople typically don’t enjoy maintaining regular time sheets, updating their pipeline, or scheduling follow-up tasks. They tend to take short cuts or even skip these tasks. Tying consistent behavior with incentives will encourage your team to complete these very necessary responsibilities.
2. Create a sales incentive plan that helps everyone to succeed. Avoid creating plans that will only reward your top performers. Dig deep for parameters that will help turn the entire team into a productive sales unit. A good incentive plan motivates average and below average performers to push beyond their comfort zones. If your incentive plans consistently reward the same top salespeople, other reps may lose interest. For example, to engage every sales rep, include incentives for process compliance. That way the plan can reward even poor performers for achieving some type of objective. You can also create plans with many parameters, and assign each a varying degree of importance. For example:

This way all reps have something extra to work on besides their sales quotas. When they work on these parameters to qualify for the plan, they automatically work towards becoming better sales reps. You can decide the priority for your organization while designing the plan.

3. Set incentive timelines strategically. Sales incentive plans should have a specific timeframe that aligns with your department’s objectives. To support corporate interests, incentive plans can also be timed to coincide with sales cycles, performance appraisals and time-based performance goals.

4. Acknowledge the importance of failures. It is true that in the end, all that matters is the bottom line. But the path to the bottom line is paved with a lot of near-misses, unexpected losses, and outright rejections. Set up an acknowledgment program or even a small reward for someone who has heard the word “no” the most, to show that you appreciate the effort. Then ensure that rep gets the extra support required to close deals in the next cycle. Figure out if the rejection was due to a flaw in sales process execution or if it was just a rare case of bad luck. If it’s the former, set an internal target for lowering the rejection rate.

5. Build transparency into the plan. By publicly tracking data, especially metrics that sales reps can control, at any given time they will know their progress toward their goal.

6. Consider group incentives. Group compensation can be a way to increase productivity when sales reps are interdependent, such as in project-based jobs where team members must reach specific milestones before others on the team can advance. Often, with group-based incentives, individuals may perform at higher levels to not be perceived as letting down the team.

7. Recognize innovative approaches that increase sales productivity. If you see a sales rep employing a better way to execute a regular or recurring task, such as filing expense claims, acknowledge their innovation as fast as possible. Offer a reward or recognition or both to show your appreciation and encourage them further. See if you can implement this practice across the organization and increase overall efficiency!

Other best practices to keep in mind:

• Make sure all performance levels are motivated 
• Set challenging goals
• Don’t cap commissions
• Minimize the time between closing a deal and payout
• Encourage peer recognition
• Personalize incentives as much as possible

Monetary Sales Incentives Programs

Monetary plans: A monetary incentive plan is a no-brainer. It is the most popular, and maybe the most effective, way to incent and drive desired behavior. Here are some ways to offer cash incentives that can maximize the effectiveness and impact of the plan:

1. Cash reward: So simple! And so fulfilling. A cash incentive plan is probably the best way to reward a desired behavior. It can be a part of the compensation plan for achieving goals or even to ensure compliance. Cash incentives may include project-specific bonuses, extra paid time off, profit sharing or stock options, planned bonuses (quarterly or linked to performance).
2. Gift certificates and discounts: Discount on gym memberships or clubs, all expenses paid vacations, and meals at fancy restaurants are some examples of popular monetary incentive plans.
3. Benefit plans: Some organizations choose to offer better or customized retirement plans or supplementary income building plans for their best performers. You can also tailor some benefit plans to a rep’s particular needs.

A monetary plan is the most effective way to incent and drive desired sales behavior.

Non-Monetary Sales Incentives Programs

Non-monetary plans: Human behavior is complex and often unpredictable, which is why monetary incentives sometimes end up promoting undesired behavior. For example, a sales rep who misses the mark by a small margin may end up feeling less motivated to participate in the next cycle. Hence, non-monetary incentive plans have their place in recognizing and driving desired behavior.

1. Flexible hours: Flexible time is one of the most popular benefits you can offer to employees. Valued employees will appreciate the flexibility and the balance this brings to their lifestyle. This benefit costs nothing and helps retain talent.
2. “On-the-spot” recognition: Offer an enterprise social network or collaboration system for sales reps to recognize each other. A quick way to pass on a ‘pat on the shoulder’ or a ‘fist bump’ that employees can use themselves, without formal approval, can increase employee engagement and interaction.
3. Privilege: Everyone loves feeling special, and offering a privilege to your valued performer is a great way to show your appreciation and even earn some loyalty points. You can decide what kind of privilege will thrill your employees most. Some ideas:
   • Give away a prized parking space to your top performer of the month.
   • Let the best employee of the quarter dictate the Friday dress code for a month.
   • How about a long lunch with the chief executive?
   • Would your employees like to be treated like Kings or Queens for a month? If yes, then fashion a crown for the top performer.

Non-monetary incentive plans help convey recognition to top performers.

You can come up with the simplest or most intricate privileges that will make the employee feel special and recognized.

This small list of ideas can bring some zing into your current incentive programs. Incentive plans can be fairly simple or built with really complex structure and parameters – it is up to you to pick and implement the right plan to the right degree.

Looking for a sales commission system? Learn how the Optymyze solution for Sales Commission Management simplifies and automates the incentive compensation management process, yielding outcomes beyond expectations.

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Sales force restructuring is most effective when the process is proactive instead of reactive. It is easy to become complacent when the sales team is doing well. Keeping a periodic check on the performance of territories and sales force will give you a fair idea about the frequency at which you need to restructure them.

What is Sales Force Restructuring?

Sales force restructuring involves reassigning the territories, redefining sales processes, and most importantly, changing the structure of the sales team.

The right sales force structure allows you to:

• implement effective sales processes in every targeted customer segment
• direct the selling effort to the right products, markets, and activities
• utilize sales resources efficiently

Reasons for Restructuring a Department

There are a number of interrelated factors that may signal the need for change. For example, companies may change their existing structure to increase efficiency and reduce lost selling time. The other major reasons for restructuring are alignment with changes in the market, product line, or go-to-market strategy.

• Market change, such as an economic recession or on the other hand, a booming economy, may require the company to change their sales process or strategy, which in turn requires a change in sales force structure.
• Launching a new product or entering a new market often causes a need to either specialize or generalize the sales force by skills and experience, and/or type of activities performed in a particular role.
• Inefficiencies in the team and low morale are often signs that something is not working. You might decide that the workload needs to be distributed differently in order to avoid the over- and underutilization of resources.
• Downsizing can be a tactic for lowering costs and maintaining profitability that can yield efficiencies when faced with poor economic conditions. In a strong market, downsizing can be considered rightsizing to structure your team for maximum bottom line contribution.
• Outsourcing can be used as a strategic move for gaining a competitive advantage. More than just a cost reduction or control, outsourcing can free up internal resources, help gain access to new markets and streamline time-consuming tasks. 
• Mergers and acquisitions demand restructuring to eliminate duplication and reconcile the differences between previously separate entities for consistency, coherence and productivity.

For instance, if you are looking to create more awareness for your product, you may invest in a less qualified sales team to do the cold calls and other related tasks. Your more qualified sales people are not burdened with an extra campaign and are free to focus their skills to do that which they do best – selling. The awareness campaign will cost you probably a fraction of the payment required for using a more specialized sales force.

Let’s look at an example of sales force restructuring where hiring a specialized sales force made more sense. A pharmaceutical company had a deep portfolio of products and their brand was entrenched in their existing markets. However, when they launched a new product in a totally different market, they could not leverage the current sales force because:

• Reps were not knowledgeable about competitive drugs already in that market, making the customer interactions stilted and ineffective.
• Reps were already at their full bandwidth and could not accommodate a new product and really do it justice.
• Sales incentives for the new product were not enough to lure sales reps to shift their focus.

In this case, even if the company paid high incentives, it would not have worked. The company eventually hired a new specialized sales force to sell into the new market.

Benefits of Team Restructuring

The structure of your sales force can have a significant impact on your customer and revenue. Sales force restructuring should be considered a good long term investment. The most important outcomes of a good sales force structure are:

• Greater efficiency of the sales force due to the right allocation of resources and accounts
• Balanced territories that are aligned with sales strategy
• More top performers as team members may get territories or accounts more suited to their skills, or with a more approachable customer base
• Increased productivity through balancing the workload to get a wider distribution of team members’ time, attention, and knowledge
• Higher profit margins by reducing overlaps and streamlining communication
• Improved decision making resulting from improved communications channels and an empowered organization

However, you should be mindful of the different advantages and disadvantages of sales organization structures.

Team Restructuring Process

Restructuring can be disruptive, but a well-thought-out and properly executed restructuring strategy focused on specific goals can smooth out some of the challenges.

• Goals: Identify and prioritize the problems that need to be solved and the opportunities you want to take advantage of. These will direct the development of you restructure and will be used to measure your success.
• Testing: Once you have a suggested restructure outlined, attack it with “what if?” questions to identify the strengths and weaknesses of how your business process will work within the restructure.
• Feedback and Buy-in: As you work on goals, restructure development and testing, involve the team. You are not asking them to make decisions, but allowing them to contribute. Not only can this generate valuable information, but it also shows respect. If team members are legitimately part of the restructuring process, there is a greater chance they will support the plan and contribute to its success. 
• Documentation: Once ready, the plan must be communicated to your team. Include the new structure, how it will impact the current structure and how roles will change. Along with proper feedback and buy-in, this can help eliminate surprises that can damage attitudes and productivity. Documentation will also serve as a reference for measuring the success of the restructure.
• Implementation: When you are ready to execute the plan, it is always best to do it face to face will all people involved. When detailing the restructure, it is important to acknowledge specific feedback and decisions regarding that input. Either set up or offer individual meetings to discuss the outcome, including how it affects that individual. Discuss next steps.

The development of a successful restructuring strategy depends on accurate data that typically comes from diverse sources, such as client, segment, market, and individual employee productivity data. Managing sales data from the various sources through proper extraction, transformation and loading will give you insight critical for sound decision making that will maximize these proactive changes and minimize the potential for failure.

Special Challenges for Product-Based or Activity-Based Structures

Companies that restructure the sales force to specialize by product or selling activity, deal with a few challenges:

• Confusing end customers: Imagine that an end customer who was targeted by a single rep since the last few years is now targeted by multiple reps. The customer may become unsure about who the primary contact is and to whom they should direct their queries.
• Inefficiency of the sales team: Multiple sales reps going to the same customer add to the cost of sales. The need for coordination between multiple sales teams increases for sharing customer details, which once again increases time spent on non-sales activities.
• Reduced or no cross selling opportunities: Sales reps cannot sell a product which is not in their sales portfolio. Even if they know that the customer needs a particular product, they cannot recommend it, if it is not in theirs to sell.

To negate the above disadvantages, companies can take certain steps:

• Incent the sales force to drive desired behavior. For example, pay incentives for sharing prospect customers with the peer-sales force.
• Invest in a good call logging system. Choose a CRM system which enables the reps to enter their call activity in real time. Such a system also would help them easily retrieve information as needed.
• Communicate the plan and launch training initiatives. Communicate the reasons for restructuring and outline the steps of the process clearly. Answer all questions and manage any concerns with transparency to gain the trust and cooperation of your entire sales force.
• Speed things up. While it’s important that you do everything right, try to implement the plan quickly. A prolonged restructuring process can fuel rumors, make sales reps insecure and lead to loss of productivity.
• Implement a periodic feedback process. Ensure that there are regular ‘health check’ surveys where sales reps can enter anonymous feedback. It is a good practice to have even if there is no restructuring, and it becomes more important if a restructuring takes place.

Sales force restructuring is a way to ensure sales team efficiency and alignment to sales strategy. Taking a fresh look at the team structure periodically allows you to balance territories and refocus the team’s selling potential.

Looking to boost your sales team’s performance? Optymyze enables you to drive sales performance with sales commission, territory, quota, and objective management.

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A sales rep is a sales rep, right? Whether you call them consultants, business developers, agents, or salespeople, you expect your sales representatives to be adaptable and well-informed: a completely reliable interface between you and your clients. You expect them to sell. It’s a tall order, no matter what the industry.

But sometimes their job calls for qualities that go over and above this already impressive list. When it comes to the medical field, your reps are more than sales mavens. They’re lifesavers.

Part healthcare specialist, part lobbyist and full-time sales professional, the medical sales representative is part of a unique breed. A dedicated sales rep will not only excel at product sales, but also make presentations to healthcare professionals, arrange appointments, organize conferences for medical staff, keep up to date with the latest clinical research, constantly monitor the competition’s moves, and stay on top of ever-changing national legislation and healthcare coverage. Sounds complicated? It is, and we’ve only skimmed the surface.

For those in charge of selling medical equipment, more difficult challenges lie ahead. The complex sales cycle, coupled with high acquisition costs, demand technical and medical know-how. The rep must understand the product well enough to supervise its installation in the operating room—with the surgeon and other medical staff present. And he or she must be prepared to adapt or change the product at all times, should a malfunction appear.

With so much on their plate, medical sales reps require a compensation plan that corresponds with their contribution. But is incentive compensation enough to motivate and retain such representatives? The answer will become clearer once we take a closer look at a medical sales rep’s career path.

1. Getting in Can Prove Quite Difficult

Normally, a sales rep position requires little more than a high school diploma or an associate’s degree. Nor is specific previous experience usually required. However, when it comes to medical sales, qualities many people develop in college, grad school, or specialized training programs are integral to a rep’s success. Excellent communication skills, confidence, analytical skills, and constant business awareness are only the beginning. Most candidates usually have some sort of medical background, if not a life sciences or medical degree. Previous experience working in a hospital or clinic is also par for the course.

These kinds of prerequisites can discourage new candidates while also fostering more attachment between experienced reps and their current employers. Establishing a clear and promising career path, and using a clear compensation plan can slow this trend and also make the domain more attractive to future talent.

2. Training Takes Longer

Due to the fact that companies that focus on medical sales look for deeply informed candidates, future reps might be discouraged to find out that many companies have prolonged training processes in place. Some organizations require that each person on the sales force spend time with an experienced medical sales representative before gaining his or her own clients or territories, as part of a shadowing program. Others simply place new hires at desk jobs before moving them into an actual sales role.

While a candidate applying for a manager position may easily expect some amount of training, the idea of continuous professional development might not sit so well with those interested in medical sales. Clear communication of the job’s benefits can be a first step to easing up this process. Sales enablement programs could also provide beneficial support and coaching, especially for guiding salespeople through their first deals. But in the final analysis, it’s the companies that implement clear, strategic compensation plans, on top of sales enablement programs, that will bring talented reps in the door and gain their trust and loyalty.

3. The Work-Life Balance Can Be Problematic

Imagine that you’ve recently begun to work for a medical device company, and one of your first real contacts has just turned into one of your first sales. You’ve closed the deal. Now…off to enjoy the bonus, right? Not quite yet. Remember: in this domain, not only is the sale difficult to make, but it is also an ongoing process.

If you just sold medical equipment, here come months or years of calibration, maintenance, and possibly even training of medical staff. If we’re talking about a biopart (also called a biomaterial, the product of biomedical engineering), pulling off the sale may have required you to enter the surgical area to ensure that its specifications were identical to those requested by the medical staff. And if you sold a large kit, you may have had to sterilize parts for the operation at hand while setting aside others for future use.

Such auxiliary activities may have their appeal for the impassioned salesman or the healthcare specialist, but they can certainly create a less-than-perfect work-life balance. Extra hours are standard. And a substantial amount of time may be spent traveling from one client to another, not necessarily to sell a specific product, but to answer questions about previously sold materials. Managers need to take extra care to compensate correctly for potentially hectic work schedules, especially since freelancers and self-employed medical sales reps are rare in this field.

4. The Responsibilities May Outweigh the Benefits

Because they bring specific expertise to the sales experience, good medical sales reps are difficult to find. They’re also deeply appreciated by their customers. Over time, their knowledge only grows, at times approaching that of a healthcare specialist. But with increased expertise comes increased responsibility.

Though a rep is in no way answerable for a product’s quality, he or she does occupy a potentially thorny intermediary position between the beneficiary and the product. And the stakes can be high. Imagine, for instance, that a medical device is found to have been contaminated. The rep would stand right in the middle of the storm of repercussions: recall costs, corrective surgeries, the PR disaster, and shattered customer trust in the manufacturer.

Sometimes, a medical sales rep’s responsibilities can catch up with him or her in the future, long after the actual sale. That’s because devices or bioparts might be sold one year, only to be used years later. To ease everyone’s concerns, the rep should be armed with as much information about a product as possible before selling it.

5. Information Is Hard Won

Having to manage unexpected information is hard. So is having to deal with a lack of information, which is a pervasive problem for medical sales reps. They have to be in touch with the newest products and latest research developments (in an industry that changes by the hour), as well as what the competition’s up to, but attaining this data is never easy. The same is true when it comes to getting a hold of accurate information about legislative changes. With very few official sources to rely on, reps often turn to private networks and forums such as Cafepharma.

The official information that a rep does manage to get is therefore highly valuable to his or her employer. So is the rep, whose reports may provide market insight, and can be used during new product development. To motivate reps to continually put energy into fulfilling their extensive role, a flexible compensation plan is a must. Such a plan might include the possibility of royalty payments, should the rep meaningfully contribute to research.

6. Legislation Is Always a Concern

As many medical sales reps discover, the lack of information affects more than sales. It affects the company on all levels. Reps must be fully aware of difficult-to-obtain current legislation. They also have to keep drug formularies and similar paperwork up to date, and pay attention to any upcoming changes in the healthcare field. A change in a medical plan, for instance, may bring special taxes and obligations that the rep will need to both understand and explain.

In light of the need for this kind of documentation, a comprehensive legislation depository should be created and regularly updated. Such a depository should contain all local and federal laws that impact the field and should be easily accessible.

7. Specialization Is in High Demand

With the steady rise of new pharmaceuticals and the constant improvements being made to medical devices, familiarity is hard won. This is why most reps usually specialize in a particular medical field. One the one hand, this makes each rep highly valuable to his or her employer and to other potential employers. On the other, it means that employers have a narrow pool to pull from.

It’s difficult for a sales rep who knows everything about a certain medical device to migrate to a whole new specialty. To counter this phenomenon and maintain a top sales department, employers should consider offering courses across specializations as well as other nonfinancial rewards to their top performers.

8. There Is No Formula for Success

Since each sale involves a long-term commitment to both the client and the product, the pressure on medical sales reps is high. Add that to the fact that in many cases reps have to make their pitches in front of a professional, and you can see why self-confidence is vital.

Other vital characteristics for medical sales reps include resilience and flexibility. Making a sale in this domain does not guarantee further successes. Many times, the client has to recommend the product further, to his patients or direct customers. If the product doesn’t fare well, future attempts to approach that client may fail. This is further evidence of the need for continuous job training.

If you’re a sales leader in a company that focuses on healthcare, you understand the challenges of replacing highly skilled reps, and know their loyalty affects your organization’s success. You can further your efforts to gain that loyalty by acknowledging the skills and nurturing the potential of each member of your sales force.

A flexible and generous incentive compensation plan, on-demand access to data, and top-notch sales enablement techniques – including coaching and training – are essential to this purpose. Unlike reps in some other fields, medical sales representatives don’t see their job as a stepping stone. They’re invested in the field. Make sure they reach their potential, and your own investments will pay off.