Category Archives: sales

Earning Trust from Hospital Customers: 5 Tips

If people like you, they’ll listen to you, but if they trust you, they’ll do business with you.       – Zig Ziglar

We regularly talk with a lot of doctors, healthcare executives, and key opinion leaders in our work, as we help med tech clients identify meaningful unmet needs, determine the desirability of new products, and create persuasive messaging.

One thing that comes out again and again is the importance of trust. As famed salesman Zig Ziglar pointed out, trust leads to sales. We’ve heard many clinicians say they don’t buy from a company, they buy from a rep.  Sometimes they don’t even know what brand of device they use. But they do know they bought it from Tracy, the sales rep they know and trust. And they know that next time they need devices they’ll contact Tracy, wherever she is.

Do your customers trust you and your company? Have you given them reason to?  What would you need to know to win and maintain their trust?

Here are five tips for earning the trust of prospects and customers:

  1. Grow a relationship, not just a transaction. Show up when you’re NOT asking them to buy.  We constantly hear that companies disappear and seem to no longer care, once the sale is made.
  2. Take it further and tell prospective customers they shouldn’t buy from you yet.  Tell them only when you have earned their trust, will you talk with them about purchasing.
  3. Provide them with value – white papers, referrals, relevant tips – without asking for anything back. Customize what you provide to their needs, desires, and situation.
  4. Be honest about what they should and should not buy from your company. You’ll earn credibility points when you suggest they buy certain things from competitors.
  5. Ask what specific things you can do to win their trust. Then tell them which you will do, and do those things. Remind them along the way that your aim is to earn their total trust.

Once you have earned their trust, you can grow the relationship further and your customer can be your ambassador within their hospital system and a great referral source. Then you’re not just a vendor, you’re a valued partner. And that’s the place you want to live in the hearts and minds of those you serve.

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Resources:

Earning Real Customer Loyalty: The Challenge for Med Tech Companies

The Promise & Challenge of Customer Intimacy for Med Tech Companies

Med Device Companies To Hospitals: Do NOT Buy Everything From Us!

The Promise & Challenge of Customer Intimacy for Med Tech Companies

No, it’s not about low lights, mood music or negligees. Customer intimacy is a business philosophy that commits you to deeply connecting with your customers. The deeper you connect, the more you sell.

Fundamentally, there are two main aspects to customer intimacy: One is really understanding what customers want. The other is giving them what they want. And that makes for very loyal and profitable customers.

When you are customer intimate, you focus on specific customers and let go of others. You precisely tailor your offerings to what your customers want and need, and do (almost) whatever it takes to make them happy. That requires really tuning to customer desires, both stated and unstated. And it may mean using big data analytics to make optimal recommendations to customers – like Amazon does with products, Pandora does with songs, and LinkedIn does with business contacts.

As a result, your customers are thinking “How do they know me so well?!” And of course, if you are practicing customer intimacy, you also genuinely care about your customers.

Sounds good, right? Here’s the rub: Most every med tech executive will say they are committed to connecting with their customers. In thought, they are. But in practice, it’s often a different story. Customer intimacy is hard to achieve. It’s a long-term strategy that requires organizational commitment, a relentless “tuning-in” to customer problems and desires, and both responsiveness and creativity to solve those problems and fulfill those desires.

Customer intimacy also challenges and turns traditional revenue goals right-side up. How? Customer intimacy is about maximizing the lifetime value of a customer. It is absolutely not about about lowering prices to hit quarterly or end-of-year numbers. In terms of KPIs, long-term relationships trump short-term profit. This can be a tough sell in solely numbers-driven organizations.

On the other hand, because it is challenging for med tech companies to practice customer intimacy, those that do will: 1) gain a significant competitive advantage in a very tough market, 2) build a barrier to commodization of their products and services, and 3) create a unique and powerful brand promise that can be core to their very identity. And as Zappos, Southwest Airlines, and Nordtrom all attest, bottom line, customer intimacy can be highly lucrative.

The first step is to decide if you have what it takes to be customer intimate over the long run. Consider: Money aside, how deeply do you care about your customers? Do you commit resources to really understand them? How far will you go to satisfy them?

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Resources:

The HBR classic by Michael Treacy & Fred Wiersema: Customer Intimacy and Other Value Disciplines

Interesting Forbes magazine article by business technology expert Joe Weinman on how digital and big data is transforming customer intimacy into “collective intimacy”

Earning Real Customer Loyalty: The Challenge for Med Tech Companies

When it comes to customer loyalty toward med tech companies, the most common story we hear from hospitals and clinicians goes like this:

“The sales reps give us a lot of attention when they want to sell us something. Once we buy, we rarely hear from them or their company. All they care about is making the sale. There is no relationship or partnership. All they are to us is another vendor.”

Turns out that for most med tech manufacturers, their healthcare customers either feel no loyalty, or place their loyalty with the rep. While hospitals and clinicians may have a brand preference, it is quite rare that they feel strong loyalty toward a manufacturer. In fact, surprisingly often, clinicians don’t remember the brand of the devices they use, even those they use day-in and day-out.

What’s causing this absence of loyalty to the companies that make and sell important and often life-saving equipment? I believe there are two factors at play.

  • The business model of many med tech companies puts short-terms sales over long-term relationships. Hitting quarterly numbers (even if it means greatly discounting prices) trumps maximizing the lifetime value for a customer. As a result, downstream marketing does not invest in sustaining long-term customer relationships. That clearly hurts customer loyalty.
  • Many med tech companies still think they’re in the business of selling boxes or software. Really, they’re in the business of improving healthcare. But when their focus is so product-centric, it’s hard to see the need to invest in building strong relationships. This sets up a dynamic in which customers choose between product A or B. The promise of partnering to help hospitals and clinicians provide better care over the long-term isn’t even on the table. This too takes away the opportunity to create customer loyalty.

That said, some reps are so good that they overcome these obstacles and are able to engender extremely strong loyalty from their customers, like in these two stories:

“It was almost midnight and we suddenly had a serious malfunction with our new ventilators. We called Sandy, the manufacturer’s rep, who happened to be 8 months pregnant. She immediately came by and with profuse apologies got us up and running. Then she came back the next day and provided a more permanent fix. When we need new vents, we buy from Sandy. Doesn’t matter what company she’s with. We trust her and whatever she recommends for us.”

“Dan advised us not to buy his company’s newest monitors yet. He said they were still working out some connectivity kinks and to wait until next year. He recommended we buy from his competitor if we really needed new monitors right away. That was a huge trust-builder. We’ll stick with Dan forever!”

These are true examples and the kind of thing we hear occasionally from clinicians when we’re doing research for our med device clients about how to generate customer loyalty. These reps are like gold and should be valued as such. You want these reps to stay committed to your company.

However, to get healthcare customers to be loyal not just to your reps but to your company is a big lift. It requires a long-term investment in what we call customer intimacy. It also requires a different business model and compensation structure. And it requires a cohesive strategy for prioritizing what customers want and need over what your solutions and technologies can do. Finally, it requires you to convincingly demonstrate to your customers how committing to buying from you over the long-term (i.e. loyalty) will measurably improve their situation.

In the always-changing healthcare space, I believe that the few med tech companies courageous and committed enough to fulfill these challenging requirements will be the big winners.

Why Selling New Technology into Hospitals is Hard: Overcoming the Status Quo Bias

You’re pitching your company’s new device or software solution to a hospital. You believe your product is clearly superior to the outdated technology the hospital is currently using. You know they have the money to switch. Standard economic theory would predict that the hospital decision-makers would rationally choose your product since it would provide them with greater utility. But the hospital decides to stick with what they have. What’s up??

There are a lot of barriers companies face selling into hospitals. One of the most pervasive and misunderstood, is the tendency for customers to make non-rational decisions to stay with the products they have. By non-rational, I mean the decision is based on an emotional preference, not an objective judgement that the current technology is as good as or better then the new one. Psychologists call this emotional preference the status quo bias. It’s a big deal.

Research in behavioral economics shows the status quo bias significantly affects important life decisions like health care plan choices, selection of retirement programs, stock market investments, recommended medical treatments, and all kinds of purchase decisions. It’s one of several biases scientists have identified to explain what appears to be irrational decision-making.

Think about it in your own life. The food you eat, the places you go, the clothes you wear, the things you buy… how often have you stayed with the familiar rather than trying an alternative?

While there are many explanations for the status quo bias, here are three of the big ones:

  1. Uncertainty: Good or bad, clinicians or IT directors know what to expect from the technology they use now. Switching to your product means taking a risk; they don’t know if it will perform as promised. As the old saying goes, “better the devil you know than the devil you don’t.” Scientists call this loss aversion.
  2.  Transition costs: It’s not just a matter of buying your product, it’s also all the  costs – time and money – involved in switching from what they’re using now. Training staff, updating clinical protocols, adapting workflows- all these things go away when a hospital maintains the status quo.
  3. Minimizing regret: People feel worse about problems that come from changing to a new product (action) than problems that come from sticking with what they have (inaction). To avoid regret,  hospital decision-makers choose inaction and keep the technology they have.

How can you overcome status quo bias so that customers buy your superior technology?

  1. Connect emotionally: Acknowledge and empathize with the tendency people have to stay with what they know. Give relevant examples of when that has worked for hospitals and when it has backfired and led to significant negative outcomes.
  2. Recalibrate their status quo: Change the reference point from the status quo being doing nothing to the status quo being doing something. Make the case that most hospitals are switching to new technologies- that’s the norm. The question is which to choose, and when.
  3. Reduce their risk. Demonstrate that staying with what they have is the risker option because it guarantees negative outcomes (be specific, e.g. more IT downtime, unnecessarily complicated workflows, less time with patients, incompatibility with EMRs or other devices, etc.).
  4. Reframe transition costs: Recognize objections related to transition costs. Acknowledge those that are true, then dismiss the remainder with evidence of savings that will result from switching.

Try it and let me know what happens. When you can overcome the status quo bias in these ways – and you can! – customer trust and sales can increase dramatically.

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The classic from the founders of Behavioral Decision Theory: Kahneman, D., & Tversky, A. (1982). The psychology of preference. Scientific American, 246, 160-173.

 

 

 

The Biggest Mistake with Most Med Device and Life Science Customer Research

I put on a workshop last week at the WLSA Convergence Summit on how to determine which new ideas to invest in — and which to avoid.

One key idea was the right way and wrong way to get and leverage customer input for new medical devices.

Wrong:  Ask customers what features they want in your products or services.

Right:  Ask customers what outcomes they want from using your product or service.

Most of the time, when we ask customers about solutions, we are abdicating our responsibilities and setting ourselves up for failure.  It is not the responsibility of customers to figure out what features will provide the experience they desire or achieve the result the want. What customers can meaningfully talk about is what experience and outcomes they want. Once we know that, then we can back into why those outcomes are important. Then we translate that understanding into a product requirement and validate its accuracy and importance.

For example, we might hear respiratory therapists tell us in focus groups that they want the mask to be a certain shape. That’s a solution. If we took that solution at face value and passed it on to the engineers and designers as a recommendation, we would likely be misleading them because we don’t yet know the desired outcome. Instead we dig deeper to reveal why RTs want the mask to be a certain shape and what outcome it will achieve. We learn that the outcome is about maximizing patient comfort in older patients, not about minimizing air leakage. We can then propose and validate a measurable requirement designed to achieve that outcome, such as “Maximize comfort for older patients wearing a mask for more than one week.”  Now the engineers and designers take over to bring the requirement to fruition.

Bottom line, asking the right questions gets customer input that leads to better products that solve meaningful customer problems.

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Resource for more info:  HBR article about designing useful outcomes-focused customer research.

 

Healthcare Sales & the Transfer of Enthusiasm!

“Nothing great was ever achieved without enthusiasm.” 

— Ralph Waldo Emerson

A new friend of mine Jerry Schneider reminded me today of a very powerful definition of sales: Sales is the transfer of enthusiasm.

The first key to conveying genuine enthusiasm with healthcare products and services is having clarity about what you are enthusiastic about.  Sounds obvious but it’s often taken for granted. Clarity comes from focus. That means one feature, one benefit. One emotional hook.

Try this next time you’re in a selling situation. Determine the one thing about your product or service that is unique and valuable, and hits an emotional chord.  Talk about it, show it, prove it. Again and again. As you do, feel your enthusiasm grow! Feel your customer’s enthusiasm grow!

This is the transfer of enthusiasm. This is what makes the sale.