The COVID-19 crisis required healthcare institutions to prioritize the immediate needs of patients and frontline healthcare workers above routine operations, forcing industry-wide recalibration. However, market-leading healthcare firms are also using this unprecedented period to pivot their commercial operations; using technology, collaboration and virtual selling techniques to engage customers. Industry players are improving operational efficiency and building a stronger core to serve key accounts while continuing to deliver value that increases patient outcomes.
Healthcare market leaders are incorporating five imperatives that address both immediate and long-term revenue management. Alexander Group, a revenue management consulting firm, provides insights on how to succeed using a customer-focused, agile and technology-driven approach to drive sales while navigating current market disruptions.
Imperative #1: Invest in key alternative customer-facing resources
Selling is an enterprise-wide effort that adds value for customers and patients. Emergent needs now require field sales and internal sales to unite over customer issues. Market leaders are employing customer-facing specialist expertise in the forms of product, patient care, technology and trained resources to continue to drive customer goals of improved patient outcomes.
The Alexander Group Healthcare Study showed that from 2014 to 2020, investment in post-sales customer success roles grew faster than investments in traditional sales representatives, with market leaders employing an average of 50% more customer-facing resources per $100 million. In today's environment, leaders are realigning staff to implement a solution-based approach to emerging customer problems.
Imperative #2: Build out digital marketing and sales channels
Virtual selling is now the norm. Market leaders are aligning their in-house and field sales to better serve key accounts with social media and email campaigns while adjusting their messaging to be relevant during disruptive times. Sales teams quickly gained virtual selling expertise to secure new customers while using collaboration tools for key accounts. Platforms like Microsoft Teams and Zoom saw a stunning 30% increase as people at all levels of organizations adopted digital sales and communications tools.
Market leaders are twice as likely to invest in digital strategies as their competitors, recognizing the value in reaching their targeted audience efficiently. The Alexander Group Healthcare Study showed that market leaders are more likely than low growth companies to rate "building a digital strategy" as a key to their growth (86% vs 29%).
Imperative #3: Focus on winning key accounts
Key accounts offer the best access to growth opportunities. The top 50 Integrated Delivery Networks (IDNs) control the majority of products and services at U.S. healthcare institutions, serving facilities with more than half of all U.S. hospital beds, according to Definitive Healthcare.
Alexander Groups research shows that more than 50% of revenue comes from key accounts, up 15% in recent years. Key account managers (KAMs) have the primary responsibility for nurturing and expanding these high-value client relationships with market leaders recognizing the importance of the role. Staying engaged with current key accounts is imperative as market leaders recognize that new problems spawn new solutions, bonding customer to vendors for the long-term using a solution-driven approach.
Imperative #4: Align sales compensation
Market leaders tie outcomes and growth strategy, while making adjustments to reflect current market disruptions. Leading organizations must now shorten planning cycles to adapt to rapidly evolving trends, focusing on customer retention and revenue preservation while adjusting sales compensation to reflect current business realities.
Virtual selling is critical but is not expected to replace the traditional face-to-face sales model. Professional healthcare sales representatives have a unique skillset, making their sales compensation a necessary investment for future growth. Alexander Group research shows that on average, 35% more sales representatives at market leader level achieve or exceed quotas, as compared to their low growth peers. Higher pay (typically 17% more on average than low growth companies) and better performance result in 55% lower turnover.
Imperative #5: Use cost-effective resources for the post sale
Recently, market leaders quickly implemented meeting and collaboration tools to keep internal teams connected to key accounts. Diverse customer teams quickly mastered online communications platforms to strengthen customer engagement.
Market leaders differentiate their customers based on opportunity and need, sharply defining the roles and critical skills needed to deliver on their mission. Junior sales reps, field support, clinical specialists, customer success and other non-traditional roles provide high levels of customer support at a lower cost. The Alexander Group Healthcare Study revealed that the percent of total sales resources that has shifted to alternative roles increased from 30% in 2016 to 41% in 2018, indicating acceptance of these non-traditional titles and the role they play in customer-facing relationships and patient outcomes.
Today's focus, tomorrow's growth
Market leaders have embraced these five imperatives to stay engaged with clients during the COVID-19 crisis, incorporating an agile, "learn and adapt" mindset. This approach allows them to stay engaged with key accounts, streamline operations and develop plans within an uncertain environment. This agile mindset is critical to cope with the constant change that is part of the healthcare business environment.
As part of its efforts to help healthcare organizations navigate the challenges of COVID-19, Alexander Group provides multiple platforms for commercial leaders to share best practices and engage with each other as they prepare for the after:
Unable to attend?
- Schedule a personalized briefing on the latest commercial operations research findings and roundtable highlights
- Visit the Alexander Group COVID-19 Response Resources webpage
The Alexander Group recognizes the challenges facing businesses during these uncertain times and can help you prepare for the next phase. Contact us to learn more.