7 Potential Pitfalls Resulting in a Poorly Executed Hospital SAM Program

Many MedTech organizations now employ a Strategic Account Management (SAM) function whose focus is to work with the company’s most important customers to build a deep understanding of customer needs and provide solutions. Some companies are achieving great results while others are not.  What are the differences between those that are succeeding and those that are not?

Hospitals are very complex organizations that work under heavy financial strain.  They face very real challenges and need the support of their business partners to succeed. A well designed and executed SAM program positions your company to be that partner. We believe the issue of success versus failure lies in how different companies view SAM. Some view it as a new sales process while others have embraced it as a critical business initiative for their company. These are two very different perspectives.

If you are considering implementing a SAM program or are not happy with the results of your current program, here are 7 potential pitfalls for you to consider.

1. Do You Have The Right People?

Great sales people don’t always make great Strategic Account Managers.  Skills such as account prospecting, product detailing and closing are important for all sales people. If, however, a sales person does not possess complex skills like strategic agility, influencing without authority, business acumen and comfort around senior leaders, they will not succeed in the SAM role. You may even lose a good sales person in the process. It’s important to create a profile for the skill set the Strategic Account Manager needs and to incorporate identification of those skills into the hiring process.

2.  Think Long Term

Understandably, all companies need to be focused on delivering sales results this quarter and this year. Building a deep strategic relationship with large customers invariably takes time. It’s important that management understands and agrees on reasonable timelines and doesn’t rush to a verdict on the effectiveness or perceived ineffectiveness of their SAM program.  This is not to say there should not be clear deliverables and goals for the SAM team. Metrics should include both leading and lagging indicators of success. It is those leading indicators that should give you a good indication of the results you can expect down the road – e.g. strategic versus transactional customer discussions; level of access the SAM team has to key customer contact points, customer validation of joint strategy etc.

When you first implement a SAM program it takes time to build relationships and begin incremental revenue generation. We believe SAM teams should be given reasonable timelines for account growth. They should also have account dashboards and these should be widely distributed to and reviewed with senior management within your company.

3.  It Starts At The Top

If you view SAM as a critical business initiative then your most senior leaders should actively support the SAM program and be involved with it. This is true in any organization but particularly so in MedTech companies with multiple business units calling on the same customer under the account leadership of a SAM. There must be senior management alignment and support from the executive team.

Individual business leaders need to align together on the priorities for the broader company and actively support the SAM team. Ideally each executive team member should play a hands-on sponsorship role with at least one strategic account. This will connect them with their most important customers, help remove internal roadblocks for the SAM and send a very strong message to the entire organization that they strongly support the management of the company’s most important customers.

4.  Give The SAM Team The Tools To Do The Job

SAM teams should bring solutions to the customer’s most pressing challenges and most important objectives. They need to be supported by resources and tools that will engage the customer and focus on their needs. If SAM teams have nothing to offer the customer outside of your direct product, they will be seen as, and treated as, “sales people” rather than a business partner.

For example, if your customer is a hospital lab who is facing significant budgetary issues, can you demonstrate how your analyzer can be a revenue generator for them adding sales and margin to help them bridge their budget gap. Taking it one step further, help them to build a business case that they will use to sell the solution upwards in their organization.

5.  Not Every Customer Is Cut Out To Be A SAM Account

Not every customer will embrace your strategic partnership approach.  Since SAM team resources are expensive they need to be targeted on the best opportunities and critical customers, and they need to be focused where they will be appreciated.  You should run all potential SAM accounts through a filter to help you target customers where a SAM approach is most likely to be impactful for the customer and company.  Your filter might include a series of points such as:

  • Our ability to get access to the executive level in the customer organization
  • Customer willingness to engage in collaborative discussions versus purely transactional behavior
  • Customer’s ability to execute an agreed upon plan
  • Risk potential and impact of customer on our business

6.  Discipline To Process

For most organizations, establishing and maintaining a high performing SAM team function requires new processes and process discipline. Missing the importance of strong process discipline and an individual that is accountable for owning that process can undermine the success of SAM.

Critical process steps include:

  • Customer selection
  • Building the account team with clear roles and responsibilities
  • Conducting a thorough analysis of the customer situation
  • Establishing  and managing  macro and micro account plans –and incorporating the customer into this process as appropriate
  • Executing account plans
  • Integrating account planning with the annual business cycle of your company
  • Evaluating performance – with the customer and internally

These process steps should be viewed as a cycle that is continuously worked and revised.

Given the amount of work  involved in managing strategic accounts and the depth of the information collection, it is strongly recommended that this information be managed as a company asset and that an “account playbook” be created as a holder of this valuable asset.

7.  Compensation Drives Behavior

Your sales compensation system needs to support the SAM account structure in your organization. SAM teams often cross product-based business units and/or divisions. Do not set up the SAM to compete against sales representatives or sales managers where success is dependent on their ability to work as an integrated team.

You may also need to consider your executive team’s compensation to ensure they are being recognized for behavior that supports the broad organization’s main growth priorities sometimes as a priority over individual business unit objectives.

Parting Thoughts

Avoid these pitfalls with your hospital SAM program and watch your relationships deepen with your key and important customers.