Sales performance – leveraging the potential of disruptive trends

Sales Performance

If you are a VP of Sales, adjusting to constant changes in the marketplace is the new normal.  Fortunately most of the changes are minor and require only fine-tuning tactical adjustments.

On the other hand, from time to time disruptive trends emerge that upend the market in ways that few ever imagine.  These tends are often difficult to foresee and they produce transformational changes.  Sometimes the changes are in technology; sometimes they are in the business model and sometimes in the culture of the organization.  Regardless, they alter in a fundamental way – what the customer buys, how they buy, and what they are willing to pay for it.  If you are selling to one of these organizations, these are the trends that produce a new set of winners and losers.

So, what can a VP of Sales do to meet the challenges produced by these disruptive trends and take advantage of the growth opportunities they generate?  Let’s examine this question by looking at health care as an illustrative market where these types of trends have produced very dramatic and well-documented changes.

First to understand the nature of the challenges, let’s profile some of the significant changes that are occurring in the health care market and then highlight some strategies to deal with these types of changes regardless of the market.

  • Financial Expectations. In the medical device sector, hospitals are increasingly focusing on solutions that help drive down the total cost for the patient and hospital versus the incremental therapeutic advantages offered by the solution.  As a result new players are added to the decision process such as nonclinical members sitting in value analysis committees and CFOs.
  • Hospital–Physician Relationships. As was the case in the mid 90”s hospitals are once again buying physician-owned practices.  In addition, hospitals are hiring hospitalists – a physician who specializes in the care of hospitalized patients.  Since 1996 the hospitalist field has grown from a few hundred physicians to more than 20,000 making it one of the fastest growing physician specialty in medical history.  On the other hand, some physicians are creating retainer concierge practices where they have patient privileges with the hospital.
  • Technology Investments. Hospitals will spend billions of dollars on technology in the coming years.  Some of these investments will be in information technology related to electronic records.  Others will be in advanced clinical technologies such as surgical robotics that will be used by surgeons in a wide variety of fields.
  • Growth Strategies. Driven by reduced reimbursements, hospitals are implementing more aggressive growth strategies.  A case in point – large hospitals and hospital chains are hiring sales reps to call on physicians to increase their referral rates to the hospital.

The examples from the health care industry are simply illustrative of the kind of changes that are brought about by disruptive trends.  So, regardless of the industry, what can a VP of Sales do to take advantage of the growth opportunities generated when a customer base is experiencing transformational type changes.  Let’s examine a couple of ideas.

  • Augment the sales team with market specialists. One strategy is to hire a small cadre of market specialists who have the skill set and responsibility to help the sales team predict and deal with the impact of the transformational changes.  In a recent McKinsey report, the authors profiled a high-tech manufacturer who created a special “market analysis” team.  The team’s role was to “identify the emergence of disruptive technologies and to predict their business implications.”  They helped the sales force and the organization to position itself as a supplier that was ahead of the curve.  “The estimated return on the investment for the market analysis effort was 12%.”  These types of team members serve very much like the product experts used by many sales organizations.
  • Develop targeted sales training programs to help the sales team apply their skills to the new buying environment. If a customer base is under going transformation changes that impact what they buy, how they buy, and how much they are will to pay for it, then a sales force is unlikely to prosper simply by doing a better job doing what they are doing.

Traditionally a significant percentage of the sales training dollars have been committed to training new hires, developing core skills like asking questions and account strategy, and product training.  These commitments still need to be addressed.  However, it may be equally important to invest in sales training efforts specifically targeted to help the sales team to develop new skills and adjust their existing skills to buying environments that are under going transformational changes.

When customers change in a fundamental way what they do and how they do it, then from a sales perspective their suppliers need to be responsive to those changes.  The winners will be those that best anticipate the responses and implement them effectively.

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©2012 Sales Horizons, LLC

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About Richard Ruff

For more than 30 years Dr. Richard Ruff and Dr. Janet Spirer - the founders of Sales Horizons - have worked with the Fortune 1000 - such as UPS, Canon USA, Smith & Nephew, Boston Scientific, Owens & Minor, Textron - to design and develop sales training programs. During his career Dick has authored numerous articles related to sales effectiveness and co-authored "Managing Major Sales", a book about sales management, "Parlez-Vous Business" which helps sales people integrate the language of business into the sales process, and "Getting Partnering Right" – a research based work on the best practices for forming strategic selling alliances. Dr. Ruff received his Ph.D. in Organizational Psychology from the University of Tennessee and a B.S. from Rennsselaer Polytechnic Institute.
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