One of my favorite bloggers, Tim at HIStalk, has blogged about the healthcare IT sales process from a vendor perspective. I’ve been involved in the sales side as well as the technology side for some time and I agree with most of the stuff the guy Tim interviewed had to say.
On selecting which customer to concentrate on:
My biggest indicator of a person’s influence in the deal is their level of honesty in the dialog. If they are only interested in setting up demos or “events” but can’t articulate coherent business reasons for the project, then they probably don’t carry much influence, regardless of their title. Maybe I’m a jaded sales rep, but if I can’t get them to have a meaningful discussion about the project other than “send me some specs on XYZ” then I’m not going to win that deal and I’ll focus on other accounts.
One of my favorite tactics to flush out reality vs. pretenders is to threaten to pull out of the deal. For example, “Based on the information that I have about your project so far, I am not sure that my product is a good fit with your goals. This is a very difficult and expensive sales process and I don’t want to waste your time or my company’s resources on this…..blah, blah, blah.” Their response to that is very telling about how much influence they have.
On sales strategies:
Academic medical centers have the “ivory tower” mentality. You have to be very deferential to them. Community hospitals are more like “good ole boy” networks. They want to know you and be your friend. IDNs and corporations are tougher to read but the locale often is telling. Stereotypes are ususally somewhat true. Small town folks are more “homey” and want to hear about your kids. Big city folks want to get right down to business.
On blunders hospital buyers make during the purchasing process:
Tons. The biggest blunder is to look at negotiation as an adversarial process. While I don’t necessarily subscribe to the “Win Win” school of thought, no deal is a good deal if someone feels screwed. It will always come back to haunt you.
Specific mistakes that hospital IT buyers make:
1. Not understanding the true market price. Even if the vendor says you are getting a 50% discount, how do you know they didn’t double the price and mark it down 50%? Happens all the time.
2. Not making apples to apples comparisons. Make sure you know what is included. Every vendor bundles things a little differently.
3. Understand the true total cost of implementation. Don’t simply focus on the price on the proposal. What resources are included and what resources are expected on the hospital side? You would be amazed how ignorant people can be about this.
4. Treating the vendor as your adversary, rather than your partner. If I am treated well as a vendor I am much more apt to fight for that extra discount than if I have been treated poorly. I can think of a specific example where a customer wanted an additional $50,000 discount and I knew I could get it from my boss. However, I never fought for that discount because the CIO treated me so badly, lied to me, manipulated me, etc. I joked to all my friends after the deal was signed that I had added a “$50,000 pain in the ass fee” to their final price.
5. Don’t forget that the vendor has taken the same negotiation classes that you have taken. Most of the “tricks” these classes teach don’t really work. We have all mastered “the flinch”, the stalling tactics, threatening walk away or “hard stop”, “intentional misunderstanding”, “bracketing”, whatever. Honesty and sincerity are a much more efficient approach. If you haven’t built trust by the time you sit down to negotiate, then you have already done a bad deal.
6. Falsely using Vendor X’s price to get me to match their price. If I am sitting down at the negotiation table, I already have a good understanding of why you are picking me over vendor X. If you don’t really prefer me or them, I know that too and my price has already taken that into consideration.
7. Nothing is free. The vendors know the market price and where they need to be. If you are getting a super super low price from one vendor, you better figure out why. Something is missing. Does that car come with a steering wheel?