(Editor's note: This is the first part of a two-part series).
With the laboratory industry currently experiencing price and revenue erosion, those who market their lab's services feel significant tension to land new business. Adding to this anxiety is a common procedure for the physician's office to give the patient a prescription or generic requisition and instruct her to "go where you usually go for lab draws." This accounts for insurance company-contracted labs, but it also suggests the apathetic provider's attitude of, "I don't care what lab you use." When the doctor obtains a specimen in an outpatient setting, either a favored laboratory or insurance contract will rule the decision.
Sales reps from large reference laboratories that sell to hospitals and smaller community labs must contend with competitive pricing pressures and group purchasing organizations.
In conclusion, not only is the art of selling laboratory services demanding, but also a number of industry confinements make acquiring new business problematic.
The Old Stand-By: Solution Selling
The past several decades have seen a type of selling approach called "solution" or "consultative" selling dominate the industry. Using this model, salespeople lead with open-ended questions designed to emerge background client information and recognized customer needs. Well-respected sales training companies, programs developed in-house and a plethora of books have all touted the solution/consultative selling methodology. They consider it the most efficient and professional approach: discover the client's "pain" and address it with their custom solution. "Always the beautiful answer who asks a more beautiful question," as e.e. cummings (early 20th century American poet, playwright and author) once said. This could well be the mantra for solution selling when interacting with prospects.
The Problem With Consultative Selling
The issue arises when a sales representative finds the vast majority of customers appear perfectly satisfied with the lab(s) they use. Hospital/corporate-owned providers feel a sense of indebtedness to utilize the services of "the hand that feeds them" -- not to mention heeding the owner's plea to support the institution by utilizing its compendium of services.
An independent lab salesperson-from the outside looking in-may ask, how can anyone compete with hospital ownership and (ostensibly) satisfied clients? It's not a level playing field considering these political situations. Secondly, reps find that with accounts that could potentially use the services they offer, they have no valid raw material on which to build a "solution" sales presentation.
Setting the Stage
Most people love to buy, but they hate to be sold. A marketer should be mindful that, at least initially, representing him/herself as someone trying to sell something is an ineffective strategy. Instead, the rep can explain his aim is to help the office-both with internal efficiencies as well as with patients. To put a positive perspective on the conversation, the rep should inquire what attributes the client values from their current primary laboratory. Another way to obtain similar information, especially from a provider, is to ask:
"If, for some reason, you became dissatisfied with your primary lab service and you wanted to interview other labs, what are the most important features you look for?"
A majority of people will typically respond with several basic items (obviously, in a specialty-specific context): good turnaround time, result quality, easy phlebotomy patient access, reliable pick-up, consistent report delivery, insurance acceptance and, quite possibly, EMR interface. It remains essential for the sales rep to document the client's opinions. To exist in today's competitive environment, the seller's lab must be closely aligned with the customer's list of "must-haves."
Commoditization Is a Choice
Successful lab reps constantly seek competitive differentiation. To the average salesperson (or those newly hired from outside the industry), this may appear an enormous task. Unfortunately, many marketers make the mistake of believing their laboratory mimics their competitors. This leaves a lab-and the salesperson-with a critical choice: whether to embrace a "me-too" core strategy (and, in the context of client billing, a price-focused sale) or one that maintains a "high value" solution.
If your lab has chosen to embrace commoditization as a dedicated strategy, you need not read further. A commodity sale should only exist because the salesperson (or the lab's owners) consciously chooses it as a strategy. Labs need to recruit and develop sales and marketing professionals who create value clarity for their current customers and prospects. Insight selling enters the picture at this juncture.
Top professionals who want to puncture the client's de facto impression of a me-too laboratory must digress from solution selling. The insight selling style offers a highly effective methodology-perhaps the only way-to move past the "We're happy with our lab-we have no problems-I don't need to talk to you" response.
Skilled users of insight selling speak to either the most highly influential staff member(s) or to the ultimate decision-maker. One gains negligible impact by spending time interacting with anodyne support staff who lack ultimate decision-making authority-and, frequently, may not even care about your topic of interest.
Insight selling rests on the belief that a sales representative intimately understands his own laboratory-as well as the offerings of his competitors. Successful representatives have a good understanding of this bifurcated job aspect in the following areas:
what the competitor reps are saying (or not) to their own clients and prospective clients ("howdy" calls, provide helpful info, etc.)
the names of the competitor representatives, their tenure with the lab, how they are regarded by clients and prospects, visitation schedule, etc.
the various marketing materials distributed to clients
e-connectivity options offered (a multifarious facet)
the location of the lab (or central distribution office)
in-house testing vs. referred tests
specimen transportation logistics (employee, contracted courier, commercial overnight service)
approximate time specimens arrive at the lab (e.g., same afternoon, evening, following morning. Depending on the test, this has implications of turnaround time)
billing policies (e.g., private-pay patients, prompt pay policies, billing cycles, etc.)
price comparisons of common tests and profiles
yhe number of pathologists on staff (and area of expertise)
in-house methodologies beyond the routine (e.g., PCR, FISH, tandem mass spectrometry, DNA probe, ion-exchange chromatography, flow cytometry, etc.)
typical hold times for client services
typical hold times for the billing department
typical AM wait times at Patient Service Center (PSC)
PSC: locations, days, operation hours, cleanliness, closed for lunch policy, etc.
electronic requisitions sent to the PSC (or to the lab)
report format (e.g., historical result summary, slide picture, body part diagram, graph, interpretive comments, etc.)
requisitioning: hand-written, computerized, bar code printer
various types of supplies (e.g., flocked swab for microbiology specimens)
Armed with this kind of background information, and with adroit questioning and industry knowledge, field personnel can make customers aware of the differences between their laboratory and the incumbent.
Following the client's list of basic requirements (as outlined in "Setting the Stage"), the intrepid rep can tactfully say,
"Our lab goes beyond the list of "must-haves" you just mentioned. We feel strongly that any laboratory that wants to stay in business must offer those things to remain competitive."
This sets the tone that most labs are basically vanilla in nature (which the client would probably mentally agree with), but there may be something different about this rep's particular lab service. The conversation advances by saying,
"We work with a number of your colleagues in this area, and we have found they appreciate-and even expect-our lab's value-based philosophy that helps them improve the way they do business and care for patients."
As a sidebar comment, talking about "your colleagues" brings up a very important psychological aspect: social norms. Human behaviors are largely shaped by the actions of those around them. People are often motivated (subconsciously) by their desire to conform with the group-especially if it is a group with which they identify. Every sales rep's tool kit should include an understanding of, and the ability to use, social norms.
Peter Francis is president of Clinical Laboratory Sales Training, LLC, a unique training and development company dedicated to helping laboratories increase their revenues and reputation through prepared, professional and productive representatives. He has published more than 35 articles and regularly speaks at national industry conferences. Visit www.clinlabsales.com for more information.