Alexander Socarrás, GM, Healthcare Sector SW Europe, Siemens Healthcare
Keynote Topic: Value Selling Defeats Price Competition
Gary Tubridy: I am here with Alex Socarrás, the GM of the Healthcare Sector for Siemens South West Europe for a talk about price competition and how value selling defeats price competition. First, Alex, let me welcome you. Thank you for joining us here.
Alex Socarrás: Thank you very much, Gary.
GT: I will tell you, defeating price competition in the European healthcare market is a tall order. Let’s start with the question of what do your customers in Europe expect of a technology supplier as you are in the healthcare marketplace?
AS: I think it is a diverse question. It depends what type of customer it is. In South West Europe, still most of healthcare is public and so we have been traditionally selling to many hospital institutions and they are, I think, when we look at the value proposition it has been about providing high-level innovation that leads to better clinical outcomes and that improves productivity, as well as the ability to support quality of life for their patients.
I think now with the economic crisis that we have in Europe, however, some of that is changing a bit.
GT: A little interest here in the question of how have you as a sales organization delivered some value that might help your customers change the way they do business?
AS: I think that what we have tried to look at is some diverse business models that really can help as enablers to our customers. One of the areas as you can imagine with the economic crisis in Europe right now, is the whole idea behind financing. Also creating diverse solutions to help our customers achieve their end objectives. Here, this is one of the areas where I think Siemens as a conglomerate with its strong financing arm that we have with our Siemens Financial Services has been able to help.
In times when many of our customers have had difficulty funding their solutions, we have been able to bring an incredible support structure from a deal financing and a solution framework approach, not only in financing Siemens-based solutions but also helping them with the overall project that they have been trying to develop.
A good example of that is what we did with a group of hospitals in Marseille in Spain where they were building two new hospital facilities, needed to equip them completely. It was a solution not only did they need imaging equipment and laboratory equipment from us but endoscopic equipment and other things there and we were able to work with our financial arm to help structure a deal that helped them achieve a turnkey approach to doing that rather than just a piecemeal approach at bringing it through. These financial solutions are really important for us right now.
GT: You delivered a whole package as opposed to a specific product.
GT: These resources you bring to bear cut across many boundaries within Siemens and that gets complex. What steps have you taken to help your sales organization, to prepare your sales organization to look at the big picture and deliver beyond the scope of the products that they have in their sector?
AS: I think that a big challenge as the market continues to consolidate and we see how some of these governments manage their problem and one avenue is what we call these PPPs, public/private partnerships. Where they may take whole institutions and contract them out to private industry.
But actually as a management industry is able to run the operation much more efficiently, much more productive, help them reduce their costs while at the same time improving services. I think this is an area that is quite interesting. What has this meant for us? It has meant that from a sales force deployment standpoint we cannot do just things traditionally the way that we have.
One of the areas that we have bolstered ourselves in our organization has been in the whole concept of key account management or global account management in creating higher-level positions within the sales organization that are still business enablers but that are at a much higher business level and capability in these individuals to be able to talk the talk to the CEOs of these institutions. Be a single point of contact for their business relationship with Siemens, which is something that in the past we did not systematically always do.
GT: Do these key account managers have a different profile from other reps?
AS: Absolutely, absolutely, absolutely, a much different profile. We want them to be more astute in finance. We want them to be more astute in strategy. We want them to be more astute in higher-level business decisions and being able to evaluate how they link the core requirements and objectives of their customers at a very high strategic level to how we, as a company, can provide solutions that link up with those key objectives.
It is basically, to be very honest, it is almost like saying we no longer even talk about the product at that point. The product is irrelevant. It is the solution, the partnership, the relationship that we have in helping them achieve their business objectives that becomes the key to enabling the business.
GT: Has this had a material effect, an impact, positive impact on the business that you do in South West Europe?
AS: Absolutely, absolutely. I will give you one example. We have been and are one of the biggest partners to a company in Spain called BR Solute, which is one of the leading providers of this public/private partnership concept that is evolving right now in the market. We also have examples of this in other countries within the South Western Europe cluster but because of that and because of the strong partnership that we bring with a turnkey solution to this company, we have been able to even this year in the crisis situation that we are in, pick up significant growth potential in the double digits in some areas because of our ability to partner with those providers.
They are providing a solution for the government and we are providing a solution to them to help enable their business.
GT: You mentioned to me earlier that in the face of all of the economic struggles while companies are cutting back on lots of different resources, you have managed to actually maintain by and large the sales resource that you have built and bring to market. Has that had an impact on the business?
AS: Absolutely. Because I think in times of crisis what customers need is stability. The relationships that we have with our sales force and those customers that have endured for years in many cases in Europe, are relationships that we do not want to lose. In these critical times when they are looking for people that they can trust because they are under a lot of pressure to deliver, we are a partner in that and a trusted partner and that trusted partner comes because we have people that have endured throughout time to be able to develop those partnerships over time and to ensure that when they come looking for someone that can help, it is us that they choose.
GT: It is an investment into the future of the business isn’t it.
AS: Absolutely, absolutely. That is why we do not want to touch what is customer facing and not just the sales people but also our service organization is very important in that endeavor as well.
GT: Alex, thank you for joining us. Appreciate your being here at the forum.
AS: Thank you, Gary. Pleasure to be here.