In Arthur Miller’s iconic American play Death of a Salesman, the lead character Willy Loman struggles with being marginalized at the end of his career. After years of self-delusion, lies and denial, Willy finally accepts that he is obsolete.Perhaps this famous play is relatable to some of the hundreds of aesthetic industry sales representatives in the U.S. who were furloughed over the past few months due to the COVID-19 government mandated lockdowns? After interviewing numerous industry executives and unemployed sales reps, it’s clear that the large armies of capital equipment sales and clinical support people face a very uncertain future.Even in 2019 when the Ax industry was at the top of the growth bubble buoyed by the strongest U.S. economy in history, customers were already pushing back on being besieged by the over-capacity and redundancy of dozens of sales reps from an endless line of manufacturers and distributors clamoring to get their money. Filtering out sales reps cold calling on busy practices was a full-time job for front desk staff, as they had to shield their doctors and providers from this relentless stream of obnoxious industry reps.  Any medical professional attending a large medical society or trade show was intimidated to even step into an exhibitor’s booth, where they would be swarmed by hungry sales people demanding to scan their badge and start the sales closing process of emails, calls and relentless selling pressure that would go on for years. Like mercenaries, these predacious reps typically moved from one manufacturer to another bringing their ”customer list” and relationships with them and using this coveted asset to command ever-larger compensation packages as they traded-up along the way. The top tier and most aggressive capital equipment sales reps would frequently earn $1 million per year in base salary plus commissions and bonuses. Their managers would share this windfall as well, and their companies would break previous sales records, albeit with typically poor gross margins due to the cost of SG&A. This practice of overpaying sales reps came under scrutiny over the past few years when major pharmaceutical firms, large healthcare companies and private equity investors acquired aesthetic device manufacturers and immediately realized that the top reps were earning more than the executives in most cases. The reaction was to cut expenses by eliminating these over-paid salespeople, with the illusion that a rookie sales recruit could learn the product in a few weeks and net the same result as veteran reps who had developed long-term relationships with practices and learned all the closing tricks that work. Like a luxury car salesman, these ”big game hunters” wore designer watches, lived in large suburban homes and drove expensive leased cars. They typically lived far beyond their means, running up debt while always counting on another giant paycheck in the future to fund their lavish lifestyle.  As the global pandemic decimated the aesthetic industry in less than one fiscal quarter this year, displaced reps were forced into increasingly desperate methods of financial survival. Some began selling PPE from China, such as masks and gowns, while others got more creative and began pitching UV lights and even disinfecting equipment via their social media accounts. Many of these schemes involved claiming they had ”secret access” to scarce supplies, while others relabeled existing equipment and doubled the price.Given the prolonged lockdown and economic recovery period, which is now measured in years rather than months, it’s very unclear what percentage of salespeople will be brought back by manufacturers who saw their revenues drop to virtually zero during the lockdown and are slowing starting to recover. The cancellation of countless company sponsored weekend workshops, large for-profit trade shows and medical society meetings seriously challenges the value of salespeople who would literally travel to several of these events per month to generate new leads or pressure existing accounts into buying more products. Thus, budget managers at each company are carefully scrutinizing the number of reps they will re-hire and the compensation packages they will offer. They are also weighing these overhead costs against more modern methods of sales, including ordering apps, online stores and even using distributors.Will our industry be forced to evolve past the old model of expensive armies of mercenary reps in an effort to survive this massive downsizing and protracted economic recession? And will the high-flying and over-paid sales reps wake up to find that, like Willy Loman, they are suddenly obsolete? These are hard questions that must be addressed by every manufacturer in this fiscal year.Please feel free to contact us directly at: info@miinews.com© 2020 Medical Insight, Inc. |