Medical sales – transformational changes demand sales strategy shifts

Transformation changes affecting medical sales

Transformation changes affecting medical sales

Historically, once a new medical device was launched, add-on innovations were introduced over time that increased the cost.  And, all that turned out okay for both the customers and the suppliers.  However, due to the trends in the health care industry more providers and patients are no longer demanding the latest and “greatest” a/k/a most expensive.  Everyone involved is weighting healthcare options more carefully – seeking value at a lower cost.

As a result the future will likely consist of faster, smaller, but less expensive medical devices as companies find that adding new bells and whistles will not yield the major revenue gains of yesteryear.

A second trend is new medical technologies relates to the continuum of care.  Historically physicians stayed within their clinical sphere – and medical technologies were similarly focused and sold. Increasingly, new technologies are being developed to work across an integrated continuum of care – a strategy supported by the Affordable Care Act and Accountable Care Organizations (ACOs).  This means that physicians will need to communicate on test results, diagnoses, and treatments.  Medical technologies such as mobile devices to monitor patient performance are being developed to support meeting this challenge

These trends as well as the fact that hospital consolidation continues, hospital-physician alignment grows, hospitals continue to look to consolidate suppliers, and patient satisfaction is increasingly a cornerstone of hospital reimbursements, mean what and how hospitals buy and what they are willing to pay for it are all changing.

How do these transformational changes impact sales?  Three considerations stand out – all of which will have an effect on the sales process and how we should train medical sales people.

  • These trends will shift the purchase of medical devices away from solely relying on physician preference and clinical value. Physicians and hospitals will be looking at upgrading and buying new medical technologies through an additional prism – economic value.
  • Since hospitals are likely to face a 15-20% reduction in reimbursements, they will be looking to reduce end-to-end supply chain costs versus focusing just on purchase price.  Hence they will be looking for their vendors to become partners versus suppliers – that requires an entirely different strategic approach to the sales process.
  • As a result of the first two considerations, additional players will be engaged in the buying process – for example: more involvement of senior level executives, contracting personnel, and in some cases a greater influence of technologists.  This impacts the background information required for sales call planning, who will be required to participate in the sales cycle from the selling organization, and what the value discussion will look like. It can introduce selling situations where the buying process is significantly different where salespeople are calling on new call points with different concerns, objections, etc.

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©2013 Sales Momentum®

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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