Creating Value for Healthcare Providers

Succesful companies understand it is essential to create value for customers, employees and investors and that there is a inextricable link between these three. Right now I’m going to focus on one aspect which is being talked about a lot in the pharmaceutical industry: creating value for customers.

If you ask around you’ll find the thinking on creating value in the pharmaceutical industry can range from clinical discussions on disease management solutions, to key behaviours of a successful call, to a total rethink of the whole pharmaceutical industry. “Value creation” has become a well-coined phrase to mean many things to many different people so for the purpose of this discussion and to help increase the “value” it has for you, I think it is important to define what we mean by value creation in pharmaceutical customer engagements.

For the customer, it is about delivering products, providing services and creating interactions that customers find consistently useful. In today's pharma economy, with the days of big block-busters long gone, this is about understanding each customers unique needs and providing valuable insight during the customer-interaction itself.

What is the value of the sales force to the customer?

A question I have heard a lot recently is “So what is the value of the pharmaceutical sales force to the customer?”. The reason I believe I’m hearing it a lot is that more and more across the industry customers’ doors are closing, sales growth is flat lining, sales forces are being cut, trust is eroding and profits are falling. Given this kind of market environment many are now logically extending the question to “what is the value of the sales force to our organisation?”. These are serious questions with far reaching consequences if left unaddressed by a modern pharmaceutical sales force.

During Huthwaite’s ground-breaking research and analysis of sales calls we identified a phenomenon that at first glance appeared to be counter intuitive: in a significant number of cases where customers reported that they saw the product as an interchangeable commodity, they still did not choose the lowest-cost product. Naturally, this led us to wonder why these customers were willing to pay a premium for what was essentially a commodity, and so we went back and asked them. Their answers helped us identify 4 drivers which created value in the customer-sales representative interaction itself.

1. Uncover the unrecognised problem: Sales representatives helped healthcare providers see problems in their own organisation that they would not have seen without the expertise of the sales representative
   
2. Offer the unanticipated solution: Sales representatives were able to chart a better solution or achieve a better outcome for the customer than they could have realised on their own.
3. Reveal an unseen opportunity: Sales representatives had utilised their industry knowledge and product expertise to show the customer a previously unseen opportunity
4. Be a broker of capabilities: Sales representatives brought to bear the full array of their company’s resources to produce a better outcome for the customer.

These Four Value Drivers are not based on theory or hear-say. Healthcare providers establish consultative relationships based on the specific and concrete skills and behaviours that sellers employ that ‘create value’. Products must be first-rate. The sales representative’s services must be regarded as “good” or “excellent” by the customer. But these are just the pre-conditions of the customer looking for something more than a purely transactional relationship.

With this in mind, ask yourself this question “What is the value of the sales representative to our customers?”, or more precisely “What are your sales representatives currently doing during a sales call that the customer would be willing to pay a premium for”. Now test those answers, because ‘have an excellent relationship’ and ‘we are easy to deal with’ are no longer enough to differentiate your team or your product in this marketplace.

In today’s competitive environment and when customers are under increasing time-pressure, it is the sales force that can deliver solutions to healthcare providers within the framework of a value-oriented, customer-centric relationship that will win – win market share, sustain customer relationships and erect enormous barriers to competition.

• Can you say as a pharmaceutical company you do that yet?
• Do you have metrics in place that measure how your sales force is creating value for your customers?
• Does your sales force really know what your customers value in their interactions with them?
• Is everyone on the same page when it comes to value-creation?

The pharmaceutical sales force that makes this transition to a true value-creating interaction has the opportunity to fundamentally change its sales representative-customer engagement. Further, these changes offer the first-to-adapt a fertile and virtually untapped marketplace. Those that are late to implement these changes, or is slow to adapt, may find that it is losing market share to more nimble competitors who are adding value in a way that physicians really care about.

Keep up-to-date on the healthcare industry. Join the Huthwaite Pharma and Medical Devices LinkedIn group here.

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