Laboratory Sales & Marketing

How to Attract and Retain Top-Performing Lab Salespeople and Run a Successful Sales Team

Salespeople are the face of your laboratory to many doctors.  Hire the right sales people, and your laboratory's client base and profits can zoom sky high.  On the other hand, poor sales people, or a poorly-designed sales program, can be the source of continual frustration and problems.  One hospitalwith a successful laboratory outreach program and top-performing sales team is Central DuPage Hospital in Winfield, Illinois.

The secrets of attracting and retaining quality salespeople were addressed by Gene Heidt, Director Laboratory Services at Central DuPage Hospital in his presentation at the May 2007 Executive War College in Miami, Florida.  The Central DuPage Hospital reference laboratory has six full-time sales representatives, all with at least bachelor's degrees. Two sales reps are recent college graduates.  In two years, their sales team has experienced no turnover.  Outreach revenues at Central DuPage Hospital are growing rapidly. Total revenue was $33 million in 2005, $39 million in 2006, on track to exceed $50 million in 2007, and targeted for $65 million for 2008.  "Our sales program has been so successful because of our success recruiting and retaining top sales professionals and our systems to continuously monitor sales performance," said Hedit.

Central DuPage Hospital reference laboratory's sales force is compensated well to make selling reference laboratory services their top priority.  Each salesperson gets a base salary and commission; the majority of total annual compensation is commission.  The base salary is enough, however, for them to survive on during their first months while they are developing relationships and the flow of new accounts is slower.  Commission is on new accounts is paid out over a three-year period, giving salespeople an incentive to stick around and claim additional commission.  Sales reps receive 100% commission for a sale the first year the sale is made and an additional 35% commission in their second and third year.  Central DuPage Hospital uses a national search firm to assist in recruiting salespeople.  Sales compensation averages $120,000 per year.  The laboratory's management strategy is to pay sales people well and treat them with respect. With no turnover during the past 24 months, that philosophy seems to be working.

Another business strategy of Central DuPage Hospital is to provide extensive training in selling techniques.  The sales training program for Central DuPage Hospital laboratory salespeople consists of online sales training from Richardson , attendance at the Dale Carnegie Sales Advantage program, and field training with other representatives.  The training program takes three months to complete.

Another aspect of Central DuPage Hospital's lab outreach program is to target sales development efforts toward large group practices, long term care, jails/prisons, IPA's (Independent Physician Associations), and infertility/donor centers.  The hospital's sales representatives make cold calls in an attempt to arrange to bring in lunch for an entire physicians' office.  A successful lunch scheduling enables the sales reps to get 15 to 30 minutes of face time with the decision maker.  The performance standard is to set up 2-4 lunches per week.  Sales prospecting performance is monitored on a weekly basis.

Hospital laboratory outreach programs can learn a great deal from Central DuPage Hospital laboratory's sales and marketing program.  In particular, it is an example of how a professionally designed and implemented sales program can generate substantial benefits. A well-trained and well-compensated sales team with little turnover is crucial.  To view Gene Heidt's complete presentation, visit:  http://www.executivewarcollege.com/PDFs/03-Heidt.pdf.