Channel Surfing: Exploring New Ways to Reach Customers

Medical Device & Diagnostic Industry Magazine
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An MD&DI November 1999 Column

Brian Hilgers has worked for Siemens Medical Systems Inc. (Iselin, NJ) for 11 years, but it's always his first day on the job. At least, that's the approach he likes to take as vice president of alternative sales channels, a newly created position aimed at increasing sales coverage and improving customer service. "Any time you want to do something new, you have to put on a hat as if you are a new employee and say, 'This is my first day with the company,' versus dwelling on the fact that this isn't how we used to do it," he relates.

As Hilgers explains, the old school of thought dictates that companies do not partner with other companies or share any information with them. But, in order to ensure continued success, he thinks companies need to be more progressive and open-minded. Hilgers explains the concept of alternative sales channels by way of analogy: "To me, professional athletes are no different than professional salespeople, or any other professional. You have to concentrate on what you do best—your core business, or sport. If you try to do everything in depth, you end up diluting your efforts, and you really can't grow the business. So, for areas in which you may have weaknesses, you partner up and create alternative ways of making yourself stronger and better as a team."

Siemens, a leading provider of diagnostic imaging equipment, advanced medical electronics systems, and products, is no stranger to such unconventional arrangements. Many Siemens nonmedical business units have been using alternative sales channels, and recently the company introduced such partnerships to the medical field. A prime example of this is Siemens' two-year partnership with Physicians Sales and Service (PSS), a medical supply company in Jacksonville, FL, that caters to nonhospital, private office markets in the United States. "Because of all the products and the amount of customers our salespeople are responsible for, we don't have enough 'feet on the street' to knock on all the private office doors for opportunities. So, we partnered with PSS and carved out a market that both companies support."

Hilgers warns that partnerships could also be a source of possible conflict. "What potentially could happen is that both partners that are trying to sell the product could compete for the same customer. This creates 'channel conflict.' You need to identify the rules and goals of the partnership and determine how to work together versus competing for everything." Part of the challenge, Hilgers says, is choosing the right partners and realizing that they are representing your product as well as your company.

One alternative sales channel that is showing strong growth is the use of e-commerce or Internet-based purchases. Hilgers sees this as an opportunity to reach new customers that salespeople are unable to reach on the street. "It's amazing how powerful the Web is today. Medical supplies and transactional sales products should be available on the Internet. It lowers sales costs and provides service 24 hours a day." Of course, Hilgers recognizes that there is also the danger of channel conflicts with the use of the Internet. "If someone in the state of Washington wants to buy one of our products over the Web, do we sell it directly, bypassing our local salesperson, or engage the local sales team to close the order. Regardless, you do not want two channels conflicting but rather enhancing the selling opportunity." This duplication of sales efforts is an area that will need to be worked out down the road, but Hilgers still sees such issues in a positive light—as a chance to work out solutions to unexpected issues as they arise due to increased sales.

In addition to positive thinking, Hilgers also encourages creativity in the pursuit of alternative sales channels. "Tupperware used to sell in hardware stores only. Then, neighborhood Tupperware parties became an alternative sales channel. I do not expect to promote neighborhood portable x-ray parties to sell equipment—but on second thought, if it works, why not?"

Admittedly, Hilgers faces the most difficult position of his career, but hastens to add that it is also the most exciting. Prior to his appointment as vice president of alternative sales channels, Hilgers was the special products division manager responsible for mammography, mobile C-arms used in surgery, operating room products, lithotripsy, and the accessory products business. Both the president and CEO, Tom McCausland, and vice president of sales, Gordon Rice, have supported Hilgers and helped him increase his skills in his new position. "I like to have a sense of humor and a positive outlook on everything in life," Hilgers says. "Don't look at change as negative; look at it as an opportunity to grow. Everyone, regardless of their profession, should look at what they do in life and how they can improve by working 'smarter.' Alternative sales channels are buzzwords right now, but I really want to apply the term to all industries that are seeking new opportunities to enhance sales while providing positive customer service."

Kassandra S. Kania is associate editor of MD&DI.

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