Latest / Clinician to CEO : Export Your Medical Device With Confidence By Overcoming Go To Market Roadblocks For Medtech Growth / #214 | How to Choose the Right Export Distributor for Your MedTech Product (For Clinicians)

Transcript

#214 | How to Choose the Right Export Distributor for Your MedTech Product (For Clinicians) · Clinician to CEO : Export Your Medical Device With Confidence By Overcoming Go To Market Roadblocks For Medtech Growth

• 0:00
  So the one thing that you're gonna learn in today's episode is how to choose a distributor that becomes a genuine commercial partner Welcome to Clinician to CEO, the podcast helping clinicians simplify your go-to-market strategy so that you can
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  stop guessing and turn your working prototypes into international med tech businesses.
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  I'm your host, Hakeem Adebiyi.
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  Let's get started.
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  The three things that you're gonna discover today are, number one, how to tell the difference between a good distributor and someone who just talks a good game.
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  Number two, the five mistakes that cost med tech companies years of growth.
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  And number three, the questions you should answer before signing any distributor agreement.
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  So if I was to ask you what's one of the biggest decisions you'll make as a med tech founder?
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  I know that some people are gonna say it's raising investment, other people will say getting regulatory approval, and there'll be a whole raft of answers that people will give.
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  For me, it's choosing the right distributor, because if you get it right, they'll open doors for you, they'll accelerate adoption, and they'll really help you grow.
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  And if you get it wrong, then you'll spend years wondering why sales never materialize in the way that you thought they would.
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  Now, I've worked with distributors in virtually every market around the world, and what I want to impart to you today is the five mistakes I see founders make time and time again, and obviously what you need to do
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  to avoid those mistakes.
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  So mistake number one, choosing size over focus.
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  Now, I understand why it happens and I've seen it so many times.
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  Founders will assume that the biggest distributor is the best distributor.
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  And sometimes, with certain products, it may be the case.
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  But most of the times, it actually isn't.
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  Because a distributor with hundreds of products may have very little time for yours.
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  And I personally would always rather work with a distributor who genuinely believes in the product than one which has a huge catalog and barely notices the product that you're asking them So ask yourself, will your product be one
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  of their priorities, or is it just gonna be another product in the brochure?
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  'Cause obviously, if it's just gonna be another one in the brochure, that's not a good distributor for you.
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  Mistake number two, getting caught up with how they pitch you.
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  Cause every distributor, I can assure you, has a great presentation.
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  They all know the market.
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  They all have fantastic relationships.
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  They all say they can sell your product.
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  I've never met a distributor that, that, that isn't great in their own mind.
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  The real question is, what evidence have they given you that they can do all the things that they're saying they can do?
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  So what you need to do is ask for examples.
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  ask how they've launched similar products, and actually ask if they've actually ever sold similar products before.
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  Ask how they're gonna introduce yours into the market with specifics.
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  Don't get carried away with the fact that this distributor is super confident what you need them to demonstrate is capability.
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  Mistake number three, is confusing a distributor with a strategy, and this is a, a mistake I see all the time that basically manufacturers and founders will sign a distributor and think that is their go-to-market strategy.
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  It's not.
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  It may be part of one, but you have to understand from them and with them how are they actually gonna create demand with your product?
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  How are they gonna make sure that clinicians hear about this product?
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  What marketing support are you actually gonna provide?
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  How are you gonna measure adoption?
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  What performance metrics are you putting in place to make sure that you know when they're doing well?
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  And if the answer is simply, "Oh, the distributor's gonna do it," then you don't actually have a strategy.
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  You effectively are just hoping that things are gonna go right, and I've never seen a distributor fail simply because they weren't any good.
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  More often than not, they failed because the manufacturer chose the wrong partner, set the wrong expectations, if they actually set expectations, or they didn't support them properly.
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  So we need to ensure that you do all those things.
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  And that leads on to mistake number four, giving away exclusivity too early.
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  Now, obviously, exclusivity sound attractive because it makes the distributor feel committed.
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  It makes you feel like they're gonna focus on your product.
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  But somebody being committed doesn't mean that they're going to deliver.
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  You need to have measurements in place, because the success is measured by results.
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  And exclusivity really should be earned through performance because you don't wanna give everything away on day one.
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  However, If you are gonna give exclusivity, then you need to engineer it that exclusivity can be removed if they don't achieve certain parameters.
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  So one of the key things here is to ensure that you actually have very clear success parameters so that either, number one, you're not giving exclusivity day one, and it's when they hit those milestones that you give it,
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  or number two, you give them exclusivity for that commitment, but then you ensure that if they aren't, hitting those parameters, then you have written into the contract that you can take exclusivity away.
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  You want to protect your business.
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  and That then lead me on to mistake number five, never actually defining success.
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  So many partnerships fail because nobody agreed what success actually looked like.
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  How many customers are you expecting that you should be getting delivered from that distributor?
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  How many evaluations to how many customers are you actually getting from that specific distributor?
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  How many evaluations are you expecting them to deliver?
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  How much revenue does that then mean?
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  'Cause obviously then you have to get the pricing in there and agree all those parameters.
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  And how often are you going to review performance?
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  Because without clear expectations Every conversation that you have starts to become subjective because you've not clarified what you want and what they're expecting, and therefore there's no joined-up thinking.
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  The best distributor relationships are managed and they're clear.
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  You never want to be assuming cause that way madness and failure lie.
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  So now over to you.
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  A little exercise for you.
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  So before signing your next distributor, I want you to answer these five questions.
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  Number one, why are you going into this specific market?
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  What's the reason why this market is good for your product?
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  Then that then leads on to why is this distributor the right distributor for you?
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  Then clearly, and most importantly, what evidence tells you that they're going to succeed?
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  Not what they say, but what specific demonstrable evidence have they got that they've shown to you that says, "Right, yeah, these guys are gonna succeed."
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  Then how will we measure success?
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  And lastly, what happens if they don't deliver?
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  What's the consequences?
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  Now, if you can't answer all of these confidently, you're probably not ready to sign, and you need to make sure that you can answer all those before you sign.
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  Now If you've already signed with a distributor, then my advice to you is to go back and run through these questions and then actually start working with that distributor to answer those questions and have these solidified.
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  And if you can, then actually go back to them and reopen that contract or that distributor agreement that you've signed so that you can actually put some of these things in there, like success parameters, what happens if they
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  don't deliver, et cetera.
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  So you can always retrofit it if you've got a half-decent relationship.
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  And actually, if they don't want you to do that, it's a bit of a red flag, to be honest.
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  So in closing, choosing a distributor isn't just about finding someone who you think can sell your product.
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  It's about finding someone who can help build your business.
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  So if you're choosing a distributor or you're struggling to get the performance you expect from your existing distributor network, I'm really happy to help.
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  So to that end, just DM me on LinkedIn using the link in the show notes and type distributor support, and I'll get back to you.
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  Hakeem: Thanks for tuning in.
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  Hakeem: Until next time, thanks for listening.
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  Hakeem: Keep challenging your assumptions and keep growing.