Here is an example. Imagine three sales reps (X, Y and Z) from three different manufacturers’ all vying to be the replacement vendor for a hospital that is going to purchase ten (10) mechanical ventilators at $25,000 each.
Rep X currently has the business and a lot of long-term relationships within the hospital and Respiratory Therapy department. He is a former clinician that entered sales years ago and has learned selling over the years through the school of hard knocks. Everyone knows and likes him in the hospital. After all he has been servicing the account for 15 years. Rep X knows through his clinical contacts that money is tight so he immediately offers the Respiratory Therapy department director a “deal” on the order. He lets it be known that he can offer a 10% discount and he reminds the clinical personnel that only his company offers a certain mode of ventilation with their unit.
Rep Y is a bit new school. He is not a clinician. He came to the company with significant experience selling capital equipment but his sales experience is not in medical sales. He has some business acumen and is learning the hospital business quickly. He employs a specific selling methodology and develops a detailed strategy to win the business. He interviews all the stakeholders and learns that materials management is more concerned with total cost of ownership (TCO) than purchase price. He is ecstatic because marketing has just provided him with an Excel based spreadsheet that allows a hospital to compare and contrast one ventilator with another. He knows his product will be the winner. Rep Y also knows how to successfully sell against Rep X’s unique mode of ventilation. He can’t wait to share his findings with the Respiratory Therapy department director and Materials Management.
Rep Z is also not a clinician. She has experience in selling capital equipment in another industry, but she has also been trained in hospital business acumen. She asks to meet with a variety of different stakeholders. In doing so she learns the following:
- The hospital wants to standardize on one machine to facilitate learning.
- Total cost of ownership (TCO) is more important than purchase price.
- The mode of ventilation that Rep X is promoting is viewed with skepticism since there is no clinical evidence to support it.
- Integration of the ventilator information with their hospital IT system would reduce charting time and improve documentation.
- Based on the types of patients they have and their past usage she believes the hospital only needs eight (8) ventilators and not ten (10).
- Bio-medical engineering is understaffed and would prefer that the new ventilators be serviced by the manufacturer so she is preparing a service offering with her proposal.
- Patients on ventilators are often moved from the Emergency Department (ED) to the Intensive Care Unit (ICU) or taken for a specific procedure such as an MRI or CAT scan. None of the hospitals current ventilators are easy to use during transport and many cannot be used in MRI or CAT scan.
- Rep Z builds a business case and provides a financial; model that resonates with the C-Suite, IT, the medical staff, RT department, nursing and bi-medical engineering. She recommends that two (2) of their existing ventilators be refurbished and dedicated to lower usage areas thus saving them money. She not only shows them how they can integrate their ventilator with the hospital IT system, she shows them how they can have information sent to a secure iPad or iPhone. She also offers to have the manufacturer’s medical director discuss with the hospital’s physicians different ways that they can decrease ventilator days using best practices. Furthermore she demonstrates that their ventilator can be used in transport, MRI or CAT Scan thus saving time and hassle while improving patient safety. She wins the business.
While each of these examples is fictitious you get the point. When a good sales representative increases their competency with great business acumen they can become great salespeople and significantly improve their win rate.
In our next blog we are going to provide a short test. It will give you an opportunity to test your Hospital Business Acumen. We hope that you find it interesting and thought provoking.