You meet on the Medica trade show floor – and the match appears to be ideal. They have the right business card, the right background, and even the right market segment experience. They say all the right things – and pitch you on a future that meets all your targets – and a relationship is established on a handshake. But all too quickly, it goes nowhere, and you’re left wondering where it all went wrong.
The relationship with your channel partners is perhaps one of the most critical components of a successful medical device market strategy. Choose wisely, and the benefits are win-win. Choose wrongly, and your launch will most likely end in a costly split.
So how do you find the right channel partner? For Scott Newton, Co-Founder of myCaribou, it all starts with a clear channel strategy. “I’ll admit – I’ve been the person who had the business cards, and it was easy to get an audience just based on the company names I represented. I’m not saying that a relationship can’t be born that way, but having a strategy minimizes any time wasted.”
A company’s channel strategy and partners selection process must go hand-in-hand, explains Newton. “Manufacturers should be looking at exploring the channel options within each country. For instance, should the strategy be national, regional, full-line, specialty, direct rep, agent-based or a hybrid? These are all critical factors that manufacturers should be thinking through before they start even considering a channel partner.”
Allison Prowse of Mespere Lifesciences agrees. Mespere is a small Canadian manufacturer of multi-organ hemodynamic monitoring solutions with big growth plans. “Especially with international sales, having a channel strategy is vital because you don’t want to waste time for every new territory or market you need to enter. You need to make sure that you have a strategy in place that is clear on what kind of partner you need. That way, you can make it through any registration process quicker, be able to get to market sooner, and make sure that they have an understanding to be able to support you.”
myCaribou’s Channel Optimization Platform helps manufacturers select the most resilient channel structure based on their product and chosen market. Click to learn more.
For Newton, having a clear channel strategy helps ensure you’re selecting the right partner for your given market. “I once worked with a European medical device manufacturer that launched a successful channel partner strategy that was a hybrid mix of sub-distributors and a direct sales force. And yet, when it came time to expand into Canada, they treated it like the 51st state. But no U.S. state has a public health system, spans six time zones, and supports two official languages!
Prowse has had similar experiences. “When we first started having products available, we got approached by a lot of companies from India that were interested in representing us,” she explains. “We said, okay, that’s a huge market, let’s go in there. One of our main selling points is that we can offer this type of hemodynamic monitoring at a lower cost in a market such as India, where they are cost-sensitive. So we thought it would be a home run.”
“But we were naive with the partner we signed with, and they had asked for exclusive rights for the entire country. Looking back, we should not have done that because India is such a big market. You need to have more people to cover the whole territory effectively.”
Another area where Newton sees partnerships go awry is in the lack of call point synergies. “I see a lot of examples where assumptions are made based on product mix only and the importance of call points are overlooked.”
“For instance, although Cardiac OR’s and Cardiac Cath labs treat the same disease state, they are very different call points within a hospital…or say a distributor calls on patient transport, but ignores occupational health and safety, they may not sell anything.”
Prowse adds that this can overshadow other traits that are critical to a successful partnership. “In our case, we quickly started noticing that one of our distributors did not really understand our product after all – and where it should be used – so they were approaching the wrong type of doctors where our solution wouldn’t be a good fit for them.”
Prowse says that experience emphasized the need for a country-specific channel strategy so you can assess your partners based on a set of criteria to avoid these scenarios. “Your strategy determines what boxes each distribution partner needs to tick.” Request a copy of myCaribou’s Partner Selector Assessment Tool.
Because they are a small company, when Mespere partners with a distributor or an OEM partner, that partner very much acts as an external sales team, making strategic alignment even more critical.
“Now when we start talking to partners, one of the first things we do is determine fit,” says Prowse. “Do they have competency in the field in the area where our products are being sold? Do we share the same values? Do our goals align? If all of those boxes are checked, then we’re like, okay, this will probably be a good partner for us.”
“Then the next step would be evaluating if their understanding of the market is better where they’ll be representing our products. As the local representatives, we want to determine if they have the experience to know how our products will succeed in the market. Do the unique selling points we’ve identified be accepted in this market? What will they need from us to be successful in terms of support? If there is competitive technology, are they familiar with it? What is the price point so that we can come up with the right approach.”
She estimates they lost a year trying to get this partnership to work but ultimately pivoted to remove the exclusivity clause and have found success with a new channel strategy for the region that involves multiple distribution partners.
“Since doing those pivots, we have had multiple sales, entered in multiple tenders and won them, and now have success in the Indian market.”
myCaribou can help you find and evaluate the right partner fit for your brand. Book your demo today.