Every deal has competition. In some, it is the pressure to “do nothing” and maintain the current status quo. On other occasions, it’s to use internal resources instead of investing in external solutions. In many situations it is a direct alternative to your product, service or solution.
Competition is about winning and winning requires a carefully crafted MedTech sales strategy. Here are the Top Ten competitive tactics that are often used to try and derail your MedTech sales strategy. These tactics may be employed by your market competitors or stakeholders within the buying organization who are opposed to your solution.
Top 10 MedTech Sales Strategy
- Selective Discounting– To win a major opportunity, it is not uncommon for a competitor to discount the product significantly and often with a time deadline. Often this is done when introducing a new product to gain traction in a market, for very influential customers, for customers who are making a large purchase or with new customers where there is no current business. When your competitor uses this tactic they know that even if they lose the deal they win by forcing you to match their price thus eroding your margin.
Tip: Make sure you get adequate “face time” with all the buying influences and determine where value can deflect concerns on price. Remind them why they originally selected your solution at the agreed upon price.
- Bundling– For suppliers that have a broad portfolio of products, often in different categories, they can employ a bundling strategy. For example, a supplier may offer a discount for products A, B and/or C that are at an acceptable margin (provide a reasonable contribution value) as long as the customer agrees to purchase products D, E and F which are at a high margin (with a high contribution value). The supplier packages this as an all for one deal. In other words the customer must buy all the products and in the quantities outlined. It’s a win-win for the customer because he/she is reducing overall spending while the supplier protects his/her overall margin.
Tip: If your portfolio allows this option, you can play this game as well. Make sure you walk the customer through the components of your proposal and help them understand the “why” underlying different prices. Minimize any chance your customer will sense deception.
- Creating Multiple Tiers– In this tactic your competitor cleverly creates three product offerings at different price points and allows the customer to see the difference in value and price at each level.
Tip: Assess whether providing multiple proposals (or multiple pricing options within a proposal) would elevate your position with the buyer. This may work well with some buyers, while others may find multiple pricing options to be confusing.
- Changing the Game– The customer tells you they want to buy 10 units of “X” and please provide a quote. Your competitor asks a plethora of questions in response to their request and learns that the customer needs to buy 10 new units because some of their existing inventory is tied up in repair and maintenance. Your competitor learns that they can provide the repair and maintenance cheaper and offers to provide that service. In return, they want the customer to buy the 10 units from them and all subsequent purchases. They win the business because they changed the game and offered a more comprehensive solution.
Tip: Always build a thorough “discovery” process into your sales strategy. Be prepared to use questions to discover the size, scope and urgency underlying requests and demands.
- Selling Higher– Oftentimes, a competitor will have access to or the ability to sell high in the buying organization. If they can gain access to senior stakeholders, it can be a “game changer.”
Tip: Make sure your sales strategy, when appropriate, pushes you to connect with senior executives. Since many of us sell more than one product to our customers, develop a “map” of vital stakeholders and work to develop access to senior executives and an understanding of their issues.
- Provide Input to an RFP- Let’s face it, RFPs are becoming commonplace in almost all industries. In some countries they are mandated for purchases over specific financial thresholds. The tactic that is used most often by your competitors is to incorporate into the RFP provisions, specifications and requirements that favor their solution.
Tip: If this tactic is discovered early in the sales process, address these issues immediately with the responsible parties within the buying organization. If discovered late in the process, take “exception” to the value of the requirement and offer alternative wording. You may also consider “not bidding” if the deck is stacked against you.
- Blitz Marketing- We’ve all seen blitz marketing work effectively in support of new product introductions. It can create a buzz in the marketplace that results in significant purchasing delays until the new technology is evaluated.
Tip: Remember new products can be attractive, but they can also be costly and buyers can be troubled by product trial delays, product availability, training issues and liability concerns. Help your buyer understand that the issue is much greater than a simple product-to-product comparison.
- Exploiting Product Issues– While we firmly believe that ethical sellers never resort to negative selling we know that it sometimes occurs. The competition may point out the number of product recalls that your firm has had on a particular product or your perpetual backlog on the shipment of a specific product to make it appear to be a deficiency.
Tip: Your response is to focus on your positives and broad range of benefits and values that you offer while explaining succinctly what your firm is doing to alleviate the perceived deficiency. Professional buyers understand that all suppliers occasionally have quality or delivery problems. They work with those suppliers that are honest with them and that resolve their problems quickly and fairly.
- Discount on Demo or Trial Products– It is not uncommon for a competitor to offer a price discount to hospital procurement for “trial or demo” unit(s) because they are used. This is done to protect their list price and pricing integrity.
Tip: Remember that two can play this game. Offer a price discount on your own demo or trial products. If necessary, group several devices together to make the deal happen for the very price sensitive buyer that has a limited budget and who doesn’t require new units.
- A Low Year-One Price– A common competitive tactic is to offer a low price for all products purchased on a contract in year one with built-in price escalation clauses in years 2-5. Usually this requires at least a three-year non-cancellable contract.
Tip: Remind your customer that these one-year pricing windfalls are transparent to savvy buyers. When you look at the total cost of ownership over the life of the contract, these deals invariably look suspiciously like a scam.
Savvy sellers anticipate competitive tactics when building a MedTech sales strategy. They reinforce their value throughout the customer’s buying process and don’t let themselves get blind-sided when the finish line is so close. If you don’t have a list of the competitive tactics most commonly used in your industry, develop one now and refer to it often. It will increase your close ratio and help you exceed your revenue target.