Over the last several years, we have had the opportunity to work with a number of companies servicing the healthcare industry.  While our discussions with sales managers and executives have spanned a broad range of topics, one of the most frequently asked questions is: “What guidance can you give our frontline sales representatives when faced with demands for price discounts or concessions?”

There is no shortage of articles addressing how to handle price demands, but we seldom read what frontline representatives identify as best practices.  So we began collecting “messages from the front.”  In other words, we began asking sales representatives (those who sell medical products, medical devices, system sales or services to hospitals, healthcare systems, clinics and medical offices) to identify “what works” and “what doesn’t work” for them when addressing demands for price discounts.

Our methodology was a simple four-step process applied over many sales organizations.

  1. We asked groups of sales representatives to brainstorm “dos” and “don’ts” in addressing demands for price concessions.
  2. We instructed the groups to identify “best practices” from their lists.
  3. Each group was asked to explain their choices and elaborated on their reasons.
  4. We eliminated obvious duplications and compiled the recommendations.

DOs: Below are the “dos” that comprise our list of “best practices” in handling price demands.


DON’Ts:
On the flip side, here are some “don’ts” that you may wish to consider as guidelines.

Parting Thoughts

In facilitating these sessions, we learned a great deal about the commonalities and differences among sales representative in the healthcare market. Some face outrageous price demands over a range of products.  Others are armed with a pricing strategy that has ample room for concessions.

Procurement professionals are more skilled and prepared.  They are more aware of pricing through the market, more knowledgeable of side-by-side product comparisons and more willing to change suppliers to meet corporate financial benchmarks.

So the question becomes, “How do we make the information useful?”  Should we build a scorecard? A checklist?  We asked our teams a final question: “What one practice would you recommend to those joining your sales team that would best help them address price demands?”  Their responses boiled the list of 28 do’s and 16 don’ts into four words.

  1. Research: discover their issues, priorities and options before you meet to discuss price and other terms.
  2. Plan: prepare a list of options that have value to your customer and can substitute for a price concession.
  3. Collaborate: treat the meeting as a way to better understand your customer’s needs; reassure your customer of your intent to address their concerns.
  4. Patience: be slow to respond to demands; don’t be defensive or over-eager to close the deal; keep the conversation rolling.