The degree, to which a company is seen as understanding and contributing to a customer’s critical issues, is directly proportional to being seen by the customer as a valued partner versus a transactional vendor or merely a consultant. This in turn is a direct predictor of success for both the seller and the customer.
This has never been more important for businesses to understand and embrace than it is in today’s healthcare industry. Hospitals are operating under extreme cost constraint. The customer market and the decision making process has consolidated dramatically. The purchasing process operates on a completely different level of sophistication and complexity.
In this operating environment how does a vendor differentiate itself as a valued partner, worthy of a long term strategic relationship? Or, perhaps we should ask, can a vendor differentiate itself as a valued partner in our current and evolving environment?
It’s our opinion that now, more than ever before, presents an opportunity for some MedTech organizations to rise above the competition and differentiate themselves through the value they bring to their customers.
It is estimated that less than 7% of organizations are seen by their customer as being worthy of a long term “partner” aka “trusted business advisor” business relationship, as defined by having the ability to understand and help customers with their critical issues and problems. If you could move yourself ahead of 93% of your competition and have much happier and loyal customers, would you do it? The obvious answer is yes, so why don’t more MedTech organizations do it? We believe the best explanation relates to the short term financial perspective that dominates business.
By its nature, establishing and managing a more strategic business relationship with select hospitals and hospital systems, is a long term process. There is a plethora of evidence to support its strategic and financial value over the long term, but moving from a traditional features and benefits sales approach to a strategic relationship will not likely address next quarter’s results or even this fiscal year’s results. It can, however, fundamentally change a company’s longer term growth projections.
Let’s be clear here. We are not talking about changing titles of sales people so they appear more senior or strategic. We are talking about a fundamental change in the approach to how you work with your most important customers.
How do customers differentiate a transactional vendor from a company that is worth a long term strategic relationship as a partner that acts as a trusted advisor? They look for the following:
- The “partner” understands my critical issues and my strategic priorities.
- The “partner” contributes in a meaningful way to my hospitals and/or hospital systems success and my personal success– in other words they help me solve problems. In many cases they make me aware of problems that I did not know existed and helped me solve them.
- The “partner” knows I am buying outcomes, not products or services.
- The “partner” brings strong business acumen to our relationship and helps me be more influential within my organization.
- The “partner” has identified clear actions that will get us to my objective along with a precise plan and a record of delivering results and on time.
- The “partner” engages with the hospital or hospital system even when there is not a short term opportunity for a purchase.
Becoming a “partner” is a big hill to climb. It takes leadership commitment and isn’t necessarily the right path for every MedTech organization or every hospital/hospital system. If your strategy is to be the low cost provider in your market and you can achieve your financial objectives on low margin transactional selling, then do it. But, look over your shoulder for the competitor who will try to change the hospitals or systems perspective on lowest price versus best value.