Volume-Based to Value-Based Selling

Selling value versus volume to your reforming healthcare providers requires a shift in your engagement and account management processes. . The speed of reform has been boosted by the recent announcements by Medicare and several large private insurance companies, that they will progress more rapidly to a majority value-based payments in 2017-18. This contrasts and rubs against the entrenched ‘payment by volume’ traditional structure of healthcare payment in the US.  For healthcare vendors and suppliers, the basic sales message for many decades has been buy my product and you will increase your volume of delivered services and increase your income. In a value-based terrain, this approach doesn’t work as well as it has in the recent past.

An evolution from volume-based to value-based selling processes requires what most of us resist: change.

When leadership institutes operational change in an organization, which requires skill development, behavior modification, and cultural integration,  it takes precious time to develop an innovative mindset, with support and coaching, for targeted behaviors to develop and to be applied with customers. When it does, amazing things can happen.

“…since the training, 95 percent of the deals I was actively engaged in, we won. I’ve never sold more. I can honestly say that the COF sales training was the biggest contributor.”
-V.P. Sales, Device Manufacturing Company

The training that caused this very happy success story and many others like it is TIGI’s COF Value-Based SellingSM, a market-based training program. It explains how to identify customer “hurts”…and Hurts are the challenges healthcare providers are facing today in this reforming market. When someone has a Hurt, the greater the need or drive to “fix” the Hurt, then the greater the need for the person to take action to reduce or take away the Hurt. The clinical, operation, or financial Hurts of healthcare providers are being amplified by healthcare reform. These Hurts are driving the need to make changes and to seek/adopt new solutions.

Examples of reform-related Hurts:

• the switch to value-based payment (bundled, incentive-based…)
• faulty processes that fail to deliver a high-quality healthcare services
• issues that demotivate staff
• workflow inefficiencies which increase costs
• all actions that diminish patient satisfaction

At TIGI, we edify our clients with the ability to study a provider’s clinical, operational, financial (COF) status and engage with our client to thoroughly understand the Hurts from the provider’s point of view. Then we support the development process so our client’s sales/marketing team can credibly analyze and explain how each Hurt impacts the provider’s business in terms of COF deficits.

Our healthcare supplier clients also strategically apply the intelligence revealed by the COF analysis. These applications improve their messaging, strategic account management, and building a segment-focused value-proposition. COF therefore becomes a very valuable and very relevant decision-support strategy for both the customer and the supplier. This powerful customer-centric framework creates a common ground that expands supplier and customer conversations.

The case study below showcases how COF Value-Based Selling℠ supports the decision-making process. For each Hurt identified, a solution was positioned in terms of how the COF framework could “fix” the Hurt. In essence, it’s value talk versus volume talk.

The Opportunity

A global leader of medical technology was working with a mid-sized hospital system. The opportunity was a multimillion-dollar, multiunit sale. The sales team knew that the C-level decision-makers were conservative. The team’s initial strategy was the traditional “volume-based” sales approach. It showed the hospital how adding new assets would increase revenues.

Their approach failed (a decision by C-level to delay in favor of another project)…and TIGI was engaged to refocus their process.

In the COF Value-Based Selling℠ market-focused training program, the sales team learned how profoundly healthcare reform is changing provider decision making, and the team identified the provider’s COF Hurts resulting from reform. They also learned how to:

• Predict provider’s hurts utilizing healthcare provider public data (Medicare Cost Report, etc)
• Validate a provider’s COF indicators with value-based selling tools
• “Fix” the Hurts by connecting the supplier’s solutions to the provider’s clinical, operational, and financial deficits
• Build a credible COF business case, by monetizing the cost of the COF deficits
• Demonstrate how the solution impacts operational efficiency, and improves financial performance

After the team became grounded in COF Value-Based Selling℠, they returned to the provider, applied the COF sales process, and within 90 days, won the business.

“COF Value-Based Selling was integral to turning the decision around, and winning the deal.”
-V.P. Sales, Device Manufacturing Company

SOME SPECIFIC ILLUSTRATIONS OF COF HURTS UTILIZED IN THE COF RE-SALE

Clinical Hurts

The Provider’s Hurts centered in The Cancer Service Line – Because of unpredictable device downtime (aged equipment), the main Hurt of the provider was the inability of cancer oncologists to efficiently create therapy plans for oncology treatments. Therapy planning times were also unduly long for obese patients. So, work flow was a big problem, as was quality of the clinical results, for this busy cancer center.

To help fix these Hurts, the Sales Team offered the provider leadership a technology solution that was faster, safer, and more ergonomically designed, allowing the hospital to extend its reach into a targeted obese patient population. The solution reduced the time-to-result (KPI) in half – improving workflow significantly. And it increased accuracy and hi-speed reporting for faster, higher-quality therapy planning. Results were significantly improved for patients and physicians.

Operational Hurts

On the operational side, unscheduled downtime of key devices negatively affected staff morale, increased patient wait times, and severely reduced patient satisfaction scores. The provider agreed that newer technology could help retain valuable staff and attract new employees. Patient satisfaction would improve as patient appointments ran as scheduled and less time was spent in the procedure. The number of “repeats” and deferred appointments would drop significantly, which would improve operating efficiencies, morale, and patient satisfaction scores.

Financial Hurts

When it comes to costs, equipment downtime obviously Hurts. With the sales team’s assistance, the provider validated that the new technology, with additional dependability and functionality, could increase workflow and capacity, potentially increasing revenues (additional contracts w/insurers) and reducing cost of operations. The new technology is considered by the customer as a “mission-critical” asset that is pivotal to establish credibility and build the provider’s brand for the cancer service line, and for the hospital system.

The sales team applied the account specific information in the COF Dashboard, and applied the COF Project Evaluator Tool, and in collaboration with customer, these tolls supported the targeted improvement on the oncology service-line financials, which would result from clinical and operational improvements.

COF INSPIRES SUPPLIER-DECISIONMAKER ENGAGEMENT

As you can see, the COF framework requires hospital stakeholders from multiple functional groups to work together with the supplier sales-marketing-service teams to credibly engage and to ultimately influence key decision-makers. It is imperative for the sales team to learn, and to validate the “Hurts” experienced by the staff, the C-level, and the patients.

The application of COF Value-Based Selling℠ by your sales team:

• Builds trust in the customer relationship,
• Evolves the sales team from the “feature-function” product pitch to value-based selling
• Fosters discussion with customers of their hurts and root causes for change
• Guides customers to find Clinical Mission-aligned solutions
• Assists the customer to monetize and thereby designate the value of the solution’s impact

COF is a framework that demonstrates value to healthcare providers in this fast reforming market.