In the past, medical device purchasing was largely based on physician preferences. As the buyer, doctors called the shots in the hospital. So the sales rep focused predominantly on the needs of the doctor.
Sales reps maintained influence, loyalty, and status as trusted advisors by going beyond the call of duty to support their client doctors. Akin to a concierge or butler, the rep was at the doctor’s beck and call. Their worth as a rep closely aligned with the success of the doctor.
The selling environment has shifted away from the doctor and toward the hospital enterprise. In short, to win on the new playing field, medical device sales reps need to create concrete value for the hospital enterprise.
The Key to Success is Enterprise Selling
Building a sales strategy on “value” can be tricky since the term means different things to different people. From the broad customer perspective, value analysis is the search for equivalent or better performance of a required function at the lowest possible cost. For hospitals, value-analysis is the mantra for efficiency across the supply chain, while maintaining required levels of safety and quality of patient care.
Value analysis teams, programs, and/or committees (VACs) have come to dominate purchasing decisions. These teams evaluate hospital products, services and processes. Influencers range from administration, purchasing, materials management and finance to nursing and medical staff. This transition to value-analysis has thrown hospital suppliers into a tailspin.
Why? For starters, hospitals have defined their value equation increasingly as cost cutting and supply chain management, historically antithetical to vendors of hot new medical technology. A brief perusal of hospital cost cuts turns up the following activities:
To meet new value analysis demands, sales strategy must be based on hospital business preferences. In both the hospital VAC and the B2B enterprise environment, purchasing power is distributed and the customer is not clear-cut. The value proposition from vendors must address the various stakeholders inside and outside the VAC. The following diagram illustrates a new vendor value proposition.
The traditional value proposition — products that deliver clinical benefits and sellers that provide support — doesn’t disappear. Instead, vendors should expand their traditional value proposition to include a range of classic enterprise business objectives.
What does this mean for the sales force? Unless vendors can move away from the clinical comfort zone, sales reps will hit a wall with limited access to the enterprise. The issue can be resolved with the right mix of people and training.
The options are clear:
In either case, winning in the new medical device marketplace will be defined by the ability of the sales organization to deliver compelling value propositions and build new alliances with a diverse audience. And success will come to those who help their most important hospital customers transition into efficient enterprises.
Learn more about our medical device practice.