In today’s market, no rep is an island
Customers are bigger and more complex than ever. Stand-alone hospitals and medical practices have given way to IDNs, with interlocking sites of care, managers, processes and cultures.
Accordingly, the stand-alone sales rep of days past is giving way to a more team-oriented person, that is, someone who can work with others within his or her company and outside it to address the needs of today’s customer. For distributor reps, that means working in a more coordinated fashion with manufacturer partners; for manufacturer reps, it means continuing to rely on their distributors’ customer relationships while providing product expertise. For both of their corporations, it may mean reorganizing the sales force and management structures.
“We believe that the most optimal way to provide superior service across the entire continuum of a typical IDN is to structure ourselves in a way that mirrors the IDN,” says Ron Barth, executive vice president, Medline Industries.
More than ever, sales reps need to keep their ears and eyes wide open in order to better understand their increasingly complex customers.
“They really need to know that as much as there is a sales process or methodology they try to adhere to, there’s also a buying methodology in their customers’ minds,” says Ken Watson, national sales director, Mercury Medical. “If they’re not in tune with the buying processes of hospitals, they will have an uphill battle.”
Change is here
The change has been brewing for some time, though not everyone has caught on.
Scott Adams, publisher of Repertoire, thinks in terms of three different types of sales reps. “There’s the skeptic,” he says. “He or she is the same rep who, in the ’90s, thought Hillarycare would go away. But about 43 percent of physicians are employed today; and when you look at doctors under 40, it jumps to about 59 percent.
“Then there’s the milkman, who still thinks, ‘If I show up at my accounts every week, and take care of them like I have for the past 15 years, everything will be fine and nothing will change.’ There are still some independent accounts like that, but statistics show that more and more are [IDN-owned]. You won’t keep the business just showing up by yourself any more.
“And there’s the old-schooler,” continues Adams. “This is the rep who believes, ‘This is my account; I’m not taking anybody else in there; I will control it and I will keep the business.’”
In fact, says Adams, all three approaches are old school. “Today’s rep has to be the quarterback,” he says. “They have to be in the play, they have to be working with the team. They may control the account, but they either hand off the ball or pass it when they need to. If I’m going in to talk to a 50-physician practice about POL, I’m better off bringing in a lab specialist than trying to do it on my own. If it’s a group practice that was recently acquired by an IDN, it’s probably better that I hand it off to a strategic account manager.”
One way forward – centralization
As customers grow in size and complexity, their internal processes, wants and needs become more complex too – and, in many cases, more centralized.
“You definitely see everybody moving in that direction,” says Watson. “You see it in standardized purchasing protocols, which IDNs are posting on their websites. They’re trying to control who’s coming in, who’s credentialed and who’s not. This has been going on for a lot of years, but it continues to gain momentum.”
Some IDNs employ software solutions to help them control their product review and value analysis efforts. “It’s like a [customer relationship management program] for purchasing,” says Watson. “It’s a good process, very organized, but it can also create huge delays in the evaluation and implementation of new technologies or process improvements.”
Distributor and manufacturer reps have to be prepared for another contemporary phenomenon, says Watson. “When one hospital joins another system, there are a lot of cultural issues to deal with. They may switch out vendors for a multitude of products. It’s all over the board.”
Alignment
“The challenge of quality of care vs. quantity is driving more and more IDNs towards deeper integration,” says Bob Atkins, director of national accounts, Mortara Instrument. “One of the ways for them to meet that challenge is to reduce the variability of both process and results, which in turn mandates centralized product selection and purchasing decisions. By necessity, this reaches across the continuum of care.”
Adam Bishop, vice president of PDG (Physician Diagnostic Group) sales, Alere, says, “As the number of IDNs continues to grow, decision-making and product selection are becoming increasingly more centralized and standardized, as they look to meet the changing needs of their healthcare systems. With teams in both acute care facilities and primary care offices and clinics, Alere is well-positioned to provide solutions for both hospitals and POLs.”
“We are seeing a trend to more centralized procurement and control, with an emphasis on having the clinical personnel in front of patients rather than placing orders,” says Brad Clark, general manager, Henry Schein Medical’s Healthcare Services Team – Eastern U.S. “Value analysis committees have always had a significant role in the acute care setting, but now, IDNs are developing non-acute committees composed of key providers and clinicians to make product decisions. This promotes consistency, compliance, and ownership throughout the continuum of care.
“Our IDN representatives must be fully aligned with the IDN’s initiatives and goals,” he continues. “The role requires strategic planning on eliminating waste and improving processes throughout the IDN. These individuals must now be experts in driving change that results in better patient outcomes, patient satisfaction, and system savings.”
Over the past five years, Henry Schein has seen a significant increase in its corporate account executive team, says Clark. “Several of these individuals have been field sales consultants (FSCs), who have focused primarily on the independent and mid-market segments, showing our ability to adapt by responding to our customer needs. Today, our FSCs and healthcare services team work conjunctively for optimum service levels and outcomes for our customers.
“Our manufacturer partners have naturally adjusted to customer needs by also creating strategic account representatives that align well with our team,” he continues. “Standardization of products for large customers is now decided in the board room rather than the field.”
New organization, new skills
“The role of the field rep has changed in that, in addition to their traditional role of recommending product, they must now be aware of and manage multiple contract requirements,” says Atkins. “As more and more practices become part of integrated IDNs, the field rep must learn to manage the multi-layered relationships between the account, the IDN, the manufacturer and the distributor.”
Mortara has organized itself to eliminate the silos between acute care and primary care, he says. “We retain our primary care, or non-acute, representatives, but have a common management structure with our acute care team. This has allowed us to more effectively manage a collaborative effort when approaching an IDN. Additionally, our dedicated primary care reps are learning more about national and IDN contracting, as it continues to become more relevant to their efforts. They are then working to help their distributor reps manage the total process.”
Says Bishop, “The most effective primary care distributor reps are expanding beyond their traditional call points in offices and clinics, and making connections into IDN corporate purchasing. They see the opportunity to provide broader solutions to the customer.”
The Alere sales team has adapted accordingly, he adds. “We continue to look for ways to bring our acute care and primary care teams together to service IDNs and foster collaboration on behalf of the customer. Alere continues to work closely with our distributor partners as we both meet the needs of the IDN customer.”
Still a broad spectrum of needs
“There is still a broad spectrum of decision-making structures, ranging from highly centralized with a focus on standardization and reducing variation, to a more autonomous structure that provides individual facilities with the flexibility to make local purchasing decisions,” points out Scott McDade, vice president, health systems and corporate accounts, McKesson Medical-Surgical. “More sophisticated systems frequently opt for two distributors, because this provides specialized distribution capabilities to meet the unique needs of each care setting, compared to a single-source supplier for the entire system.”
As IDNs mature, the role of the account manager changes, he adds. “To successfully work with sophisticated health systems, reps are prepared to provide business insights, be experts in contracting, and demonstrate operational expertise – in addition to their core skills in relationship building. They really serve more as a consultant than a traditional salesperson, focusing more on the customer’s business issues than their own company’s solutions.
“They should use their insight and unique perspective to deliver value to customers and inform them of their changing needs and the individual requirements of each setting. Our account managers have done a great job of expanding their knowledge and skills to serve the different specialties involved and the complex needs of these customers.”
Too much for one person
There is obviously considerable variability in the level of integration among IDNs across the country,” says Barth. “But, with bundled payments becoming increasingly prominent, the prevalence and level of vertical integration is certain to grow as we move forward.
“Furthermore, as bundled payments increase, product standardization and uniformity of care across the continuum will become progressively important. As a result, we are engaging customers in a way that goes far beyond providing superior service to just the acute care hospital, and are now having regular dialogues on how to best serve their entire integrated network.
“Medline believes that it is very difficult to expect a single person, such as a traditional acute care sales representative, to effectively manage and service the unique needs of each care point within a large, vertically integrated health system or IDN,” Barth continues.
“Our acute care sales team has been in place for several decades,” he says. “Similarly, we’ve had a post-acute care team that has been in place nearly as long to service our large LTC customer base. But, we also now have a physician office team, an ambulatory surgery center team, a home care and hospice team, and even a managed care team that interfaces with the payers. We even now have a retail team that works with the large retail pharmacies that are increasingly partnering on a regional or national basis with healthcare providers and networks.
“While these teams have unique skills to service their particular market segment, we operate them under what we refer to as a ‘One Medline’ mentality,” says Barth. “Once we identify the needs and concerns of the particular IDN, our business practices and approach with the individual care segments are very well-coordinated and work in unison. At a corporate level, we are committed to providing a single point of contact to represent our company and ensure our reps are operating in unison and consistent with the desires of the customer.” Medline has expanded its executive-level corporate sales team to serve as that single point of contact.
Tomorrow’s rep
“Moving forward, our hiring will continue to be more specialized to meet the disparate needs of our customers,” says Barth. “We will continue to expand our executive level team to represent us at the highest level of what are becoming fewer and bigger customers. But, we will supplement that team with specially trained representation and clinical support to help deliver a superior experience up and down the full continuum within the health system or integrated network.”
“As our customers evolve, so will our sales teams,” says Bishop. “We expect professional agility and the ability to work with distributors and across IDN-associated facilities and departments in order to meet the needs of the customer and the patient.”
Says Atkins, “Our sales rep of the future will be more skilled in account management techniques as well as IT integration. As the market continues to move toward integration, led by larger and larger IDNs, it will be necessary to focus more on the relationship and a little less on the transaction. As a manufacturer offering capital equipment for diagnostic testing and monitoring, we see IT integration as a critical issue. As such, our reps will need to be well equipped to serve as valuable resources for our customers.”
Scott McDade says, “The account manager continues to play a vital role in delivering value to our customers to make sure that each health system is fully realizing the benefits offered by the breadth of our solutions. In addition, our national accounts team provides more focus on this evolving segment of the market. As the needs of health systems continue to change, we want to make sure our team is well equipped to provide the best level of support.
“Account managers will need to understand each of their customer’s value drivers and economics – so that they provide valuable consulting to each differentiated care model,” he continues. “Like today, we will expect our team members to deliver value through their unique perspective, a focus on helping customers grow their business, and their understanding of changing markets.” Successful account managers will also be expected to work with their manufacturer partners to develop solutions that help customers resolve issues or achieve their goals, he adds.
A fiduciary role
“I’m looking to hire hunters with excellent strategic sales skills,” says Watson. “They have to be computer-savvy. They also need to treat their accounts like clients and not customers. By that I mean they need to look at their accounts in the fashion that serves their clients – more of a fiduciary role. If they can build that kind of relationship, they can challenge their clients to be open to new processes and technologies.”
Manufacturers will always rely on their distributor partners, he continues. “You still want to have the person who has the relationships, experience and know-how to introduce new technologies into hospitals, to gain their interest and close deals. That never changes. But as a CEO once told me, where there’s no money, there’s no mission.
“That’s why today’s distributors must be prepared to have an economic value proposition discussion with their customer. In the past, if you had a great product, if you were a good salesman and it was a hot technology, you could get in because of who you were. Now, even with the bedside clinician, if you don’t talk about patient throughput, added revenue, reduction of cost, it’s going to be a very, very difficult sales process.
“We’re trying to train our salespeople to be consensus-builders around both clinical and economic value propositions.”