Sales Challenges in the Future
By Ibby Smith Stofer
One of our recent blog articles entitled 10 Years of Changes in Healthcare Sales goes over how healthcare purchasing decisions and the sales process have changed over the last 10 years. Today we will focus on some of the challenges healthcare sales will see today and in the future.
The decision making process throughout healthcare has changed through the merger and acquisition mania of the last decade, as well as the growth of the Integrated Delivery Network (IDN) models. Because of this, selling to an IDN aligned hospitals or merged healthcare providers can be challenging.
When selling in healthcare it is critical to develop an accurate customer profile including the key individuals, the buying process they use, and how their decisions are actually made. Begin by understanding the current configuration of the account. Are they a group of hospitals who are still making independent decisions, or is there a centralized decision-making group for medical devices? Knowing this fact alone will significantly impact your sales process.
Knowing what the customer’s buying process is, and where they are in the process is critical to your sales process and ultimate success. There are usually multiple phases that healthcare providers move through when making a decision to change suppliers or products. These include:
Phase 1: Recognition of a Problem:
The purchasing/buying process begins when someone in the company recognizes a problem or need that can be met by acquiring goods or services.
Phase 2: Description of the Need:
This phase involves determination of the characteristics and quantity of the needed item.
Phase 3: Product Specification:
Obtaining the input from the second phase, the buying organization has to develop the technical specifications of the needed items.
Phase 4: Supplier Search:
This phase pertains to the search for the qualified suppliers among the potential sources. Today, over 70% of the time, the “buyer” does both online and reference searches before ever contacting any companies.
Phase 5: Proposal Solicitation:
The lists of qualified suppliers are now further shortened based on some critical factors that may include: price, delivery, payment terms, insurance, and acquisition options, just to name a few. After evaluations, based on the specified criteria, some firms are asked to come over for formal presentations. The proposal will include product specification, price, and other details.
Phase 6: Supplier Selection:
An organization may also attempt to negotiate with its preferred suppliers for better prices and terms before making a final decision.
Phase 7: Order Routine Specification:
After the suppliers have been selected, the buyer negotiates the final order, acquisition method, technical specifications, quantity needed, expected time of delivery, return policies, warranties etc.
Phase 8: Performance Review (References):
The final phase in the purchasing process consists of a formal or informal review and feedback regarding product performance as well as vendor performance. The buyer may contact other end users and ask for their evaluations which are in turn given to the supplier. They may rate the supplier on several criteria using a weighted score method or aggregate the cost of poor supplier performance to come up with adjusted costs of purchase including price.
The Trap of the “Me Focus”:
Too often in sales the focus is on the sales process and not on the buying process. Remember, it is no longer sales leading the customer, rather, it is the customer who is leading the decision to buy.
Aligning your offer to the customers priorities and strategic initiatives means taking the time to demonstrate the value of your product, or the solution you are offering. Your value statements must align with the customers. In order to achieve this try answering these questions in advance.
- Can you improve patient safety?
- Can you reduce costs?
- Will your product or service cover the full range of sites?
- Are you able to provide standardization and incentive pricing tied to volumes?
- Can you support their current configurations?
- What are the advantages or disadvantages of deferring or a do-nothing decision by the customer?
Knowing the answers to these and other similar questions will allow you to present solutions aligned with the customers goals.
Understanding The Market:
Another tip is to invest time in understanding the market as well as the targeted customer. Join associations and groups that are aligned with the areas of healthcare that you target. For example, if your strongest support is from the Chief Nursing Officer you would seek out professional organizations and groups whose membership is clinical. If your call point is the Chief Information or the Chief Finance Officer, you would select organizations based on these professions. The topics and discussions among these groups or associations are a great place to increase your knowledge and understanding of the concerns, trends and interests of the members (your customer target).
Being involved in the relevant organizations will allow you to develop conversations that relate to the customers interest and demonstrate your intent to be an advisor, consultant and trusted colleague. Attending meetings and conferences may allow you to meet face to face with those who are elusive and difficult to connect with using other methods.
In these meetings, be prepared to discuss topics that are current and of interest to their work challenges. For example: if you are talking to a head of supply, they may be challenged by the sheer volume of suppliers they utilize, or the ever-rising costs of transportation and distribution to multiple sites. If you are working with the CFO, he or she may be concerned about the rising interest rates and the impact that is having on their capital projects. Discussing these topics allows the customer to discuss their issues/perceptions. It will differentiate you from others who are there simply to tell and sell. Customers want to talk about what is important to them!
As the buying processes and challenges continue to change, sales professionals must be willing to adapt and learn new ways to help their customers solve issues. In the past 10 years we have seen significant changes in the process and we will continue to see changes in the coming years. Relationships need to be strong enough to weather the ongoing changes that healthcare faces today and well into the future. It will be exciting to look back at the end of the next decade. Surely things will once again be different. Preparing for today and anticipating the future needs of customers will take hard work and effort, but the rewards are well worth making the investment.