Selling to the Healthcare CFO
By Ibby Smith Stofer
Some of the most memorable interactions in my career include the time I spent with sales trainees when I worked for one of the top medical device companies in the country. During sales training, we would occasionally do role-playing. I assumed the role of the CFO for a healthcare provider considering new technology.
Although it was rare for the hospital or healthcare system to allow a manufacturer’s (vendor) representatives to meet with the Chief Financial Officer, we felt that the cost of our technology needed the CFO approval and wanted the sales team to know how to engage with them. Too often they were ill prepared to discuss how their product would meet the financial concerns and priorities of the hospital. Focusing on how to improve patient care or patient safety could overlook the most pressing concerns on the mind of the CFO.
If the vendors met with the CFO, the discussion was often one-sided. The CFO’s primary concern was identifying the cost and savings associated with the proposed product. Sales representatives were rarely prepared to discuss how their solution would achieve cost reduction. They preferred to delay providing the pricing until the last moment for fear of being eliminated early in the decision-making process. During my role-play as a Hospital CFO, I would insist on knowing both the initial and ongoing costs. As the vendors avoided or attempted to delay those questions, our meeting was less than enjoyable.
No longer are CFO’s solely interested in numbers and costs. Just as healthcare dynamics, legislative decisions, insurance deductibles, population health initiatives, and acquisition strategies change, so have the roles of the CFO’s in a healthcare setting.
Today the CFO is most likely chairing cost reduction initiatives, assessing strategic merger or acquisition activities, and developing the hospital’s market messages. This role can include pricing transparency, and developing a strategic advantage through acquisitions, mergers and community involvement. On top of all that, he or she will still oversee both the capital and operating budgets with declining margins.
In an article by Health Leaders Media, it states “CFO’s are feeling the pressure to trade in their spreadsheets for crystal balls, when what they really want is a good way to integrate long-range financial planning with the tactical cost reductions they are implementing every day.” This article provides further insight into the challenges faced by healthcare CFOs of today. The Becker’s Hospital CFO Report provides additional insights in “20 Pieces of Advice from Hospital CFOs”. This advice explains how to formulate questions and relate products to help the CFO achieve results. Whether selling devices, software or services, knowing how to relate to the CFO’s priorities is important.
I believe the old saying: “to really understand the true needs of a customer, one must think and act like the customer.” Most sales professionals cannot walk in the shoes of the CFO, or for that matter, any of the healthcare leaders they depend on to be successful. They can, however, have a virtual experience by accessing the wealth of information available to them via the internet from professional associations and organizations.
One of the available resources that I have relied upon to help me stay current is the Healthcare Finance Management Association (HFMA). They offer webinars and articles that can offer insight into the changing roles and processes that many customers use to determine capital projects. One article I recently read summarized a roundtable on using financing to increase cash flow. Reading the insights of leaders in any field gives you valuable awareness on how you may be able to offer solutions to the customers’ challenges.
I also have found that joining LinkedIn groups offer great opportunities to not only identify key decision makers but to gain insight from the articles and posts associated with the members. These posts can be great conversation openers and demonstrate the genuine interest that may go beyond your company's product or service.
As in most industries, the decision-making roles and priorities are frequently changing, and it is up to the sales rep to stay current with these changes. Success requires each member of the team to understand the issues and challenges as well as the processes customers use.