How distributor reps can discuss the financial aspects of capital equipment sales with customers.
Capital equipment sales take patience, preparation, asking the right questions, and – perhaps most important of all – collaboration.
In the November issue, Repertoire highlighted how distributor reps can make the most of their conversations with customers in this product category with the proper preparation and planning, understanding current market dynamics, how conversations with customers about equipment differ from other product categories, and collaborative best practices between distributor and manufacturer reps.
Part II examines how to approach the financial aspects of the conversation with customers and follow up needed to ensure continued success.
Participating in this story are:
- Kyle Allan, territory manager, MedTech MedCare
- Kevin Barefoot, partner and director of Point-of-Care Lab and Primary Care for MedTech MedCare
- Jake Barga, territory portfolio manager, Midmark
- Jonathan Bowman, senior director of Sales, Alternate Care, for ZOLL
- Dominic Seymour, territory manager, MedPro Healthcare Sales Solutions
People buy on trust
With capital equipment, people like to buy from those they trust, said Dominic Seymour, MedPro Healthcare Sales Solutions. “So building those relationships, having impactful meetings – not just check-in meetings – but being able to bring something to the table for a certain facility upon every meeting is really important, such as introducing a new piece of technology that might offer them an additional revenue stream. That’s a great way to build trust.”
Trust is also built from presenting customers with frank conversations on deliveries and delays. “If I’m sitting in a capital distribution rep’s shoes, offering lead times on capital equipment is important, but so is understanding the shortages that are out there.”
It’s important to know what’s important to your client. You might have one customer that’s a research hospital that cares a lot about having the latest and greatest piece of technology, and price is no object. But, down the street, you’ve got a different hospital that’s more price conscious. “One size doesn’t fit all; understand each of your customers in depth, how they pay for things, how they budget for things, all of the above,” Seymour said.
Don’t start with price
Probably the biggest pitfall Seymour sees in capital equipment sales is when a rep starts with price, whether it’s the lowest price or the highest price. “I’ve seen certain reps go in super low to just try to win the business, only to have the customer not get their needs satisfied,” he said. “I’ve seen other reps go in with the highest because they want a higher commission, but they are totally overselling it. They still might get the deal, but in the end, the customer is going to be feeling that pain on the back end.
“I don’t want to talk about price right away,” Seymour continued. “I tell them these things are pretty intricate. There are lots of levels and options.”
If a customer is demanding price right away, Seymour recommends offering a ballpark figure with multiple levels – a high, mid and low option. “Offer them some aspects of each and then explain that you’d like to have a deep dive into what their needs are so that you can figure out what the appropriate solution is for them.”
Usually that’s a great starting point, as long as the customer knows that you’re trying to work with them to get them to the right spot. It adds to their level of trust with the rep, that you’re not just in it for a quick sale, but you’re in it for the betterment of their facility and oftentimes their community. “Some of these hospitals are very small and their community relies on them,” Seymour said. “So, some of these are big purchases for these facilities, and it’s got to feel good for them to know that their rep and/or their distributor is looking out for their best interests rather than their own.”
More than just price
It is important to understand that the financial discussion is more than just price. That is of course part of it, but ROI, operational efficiency, regulatory compliance, patient satisfaction, patient outcomes, staff engagement, total cost of ownership, reliability/up time, reducing waste and risk avoidance are critical components in the total financial picture of the customer’s equipment purchase decision that must be considered, said Jake Barga, Midmark.
“Manufacturing reps can provide tools and content that empower the customer to make well-informed, data-driven business decisions through various means such as detailed proposals, ROI and TCO calculators, case studies, white papers and executive summary proposals as well as in-person and virtual sessions to share market insights and trends,” he said. “Thoughtful questioning and zeroing in on what’s going to make the customer’s facility more efficient and profitable is ultimately what we’re looking to accomplish together.”
Price transparency is critical to mutual customers. Whether they are considering a replacement purchase or planning a new build, it’s essential to make sure that contracts are current.
“At Midmark, we typically follow up initial discussions with an easily digestible email containing all necessary details: product numbers for distribution to quote, images, lead times and links to product landing pages. The manufacturer representative takes on the responsibility of explaining the rationale behind design choices and the price differences among various product offerings and options to the client. This is accomplished in a follow up, in-person or virtual meeting to agree on the details prior to order placement.”
Finances: Do your homework
When it comes to preparing for the financial details of the discussion, customers understand that equipment costs money and that the purchase is essentially an investment. “Yes, the conversation can be challenging, but going in with a confident mindset in the product and the preparation you put in will give the end user confidence that your product is worth listening to and hearing about,” said Kyle Allan, MedTech MedCare. “If you’re just focused on selling the product and blabbering about features and benefits, your win rate is going to be lower. If you approach a sale by uncovering the end user’s needs and winning their trust, the conversation is going to become a lot easier.”
Reps must understand the customer’s budget and their internal approval process to get a sense of how interested they are. “There are a lot of backend things that we’re not privy to right away, but if you do some investigative work to understand those aspects better, it will help you better guide the sales conversation.”
Homework and due diligence matter. Resources like trade magazines, local news reports, hospital directories, LinkedIn, and construction reports can help reps uncover what it is about the customer that makes them who they are, find out where they went to school, find out their background, etc. “Those are little things, but important, because at the end of the day it’s relationship building,” Allan said. “You don’t want just one order, right? You want to develop a long-term relationship that is almost like a friendship, so when that customer becomes close to you, your success rate goes up. You can’t go wrong with a deep knowledge base.”
Knowing where your product pricing falls into the market is also key. Financial constraints are real, so if your product is more expensive than your competitors, does the end user know why that is? Is there a better warranty? Are there clinical benefits?
Love the logistics
Mastering the logistics of the entire sale is going to help your reputation. “Going above and beyond I believe is necessary to differentiate yourself,” said Allan. “Constant communication and follow up with the manufacturer, distributor, and/or end user is necessary from the procurement periods and timelines of delivery, dates and installment methods – all these things work successfully in tandem to build a full successful sales story.”
If a new install renovation build is successful, customers can trust you with a project of any size. You need to also understand where your product falls in the market. “As a manufacturer rep for a multitude of capital product lines under MTMC, we represent top names and compete against top names,” he said. “Knowing how to sell against your competitors via the GPO advantage, actual clinical advantages and the
features is so important.”
Understand their options
Reps must understand how providers are planning to pay for a piece of equipment. “Whether it’s a third-party financing, whether they’re going to pay cash for the whole thing, who’s got to approve it?”
A lot of times there are category managers, value analysis managers, and multiple levels of people involved in the purchase, Seymour said. “Ask the right questions up front, and always go into those meetings super prepared with a full list of questions already thought out,” he said. “I would never fly by the edge of my seat and just say what comes to me. I would always go in very prepared with questions that get me to the spot where I think I could actually offer them a set of quotes.”
How does the customer like to buy?
The financial part of the sale starts in the pre-call planning phase of the discussion.
“Unfortunately, this is the area most salespeople gloss over,” said Jonathan Bowman, ZOLL. “Knowing how the customer typically makes purchases is key.” With CRM’s today, there is no reason why a salesperson should not be prepared with past purchasing from the customer.
As an example, Bowman recently needed a part for his RV immediately. He called three places. The first two provided no options other than he should call another one of their stores. The last one Bowman called not only found what he was looking for at another location, but they offered to get it the same day. While on the phone, the customer service rep asked this question when cost came up: “To make things easier on both of us, what are you seeing on Amazon?” Bowman was driving and couldn’t look, so the service rep did it for him and matched the price instantly. “What’s the lesson? Be prepared, know your customers better than they know themselves,” Bowman said. “This comes from asking questions, I can’t stress that enough.”
“Quote less. Sell more.”
Bowman said he learned this phrase from one of the best big deal closers he ever worked with. It simply means try and avoid giving a price before demonstrating your product. This will be difficult to do in most cases. “But again, asking good questions and helping the customer to see that a quote is not the first step but rather the last step,” he said.
The quote should summarize all that was agreed upon during the sales process. “If we are just an order taker in the eyes of the customer, then our strategy will be ‘quote and hope,’ and hope is not a strategy.”
Therein lies the key. Have a plan (strategy) with each customer and each rep you work with. Don’t assume they will buy your product because they have purchased from you in the past. “You can’t avoid all pitfalls, but not having a plan/strategy is like taking a trip cross country and only using a fold-out map,” Bowman said. “Use all the modern resources you have. Most GPS today will tell you what to avoid, construction areas, accidents and weather. Having a good plan and executing on that plan by using all the resources available to you today is tantamount to being successful.”
Be honest
There are times when, to gain trust, Kevin Barefoot, MedTech MedCare said he isn’t afraid to refer the competition. “There are times when we just don’t have a fit and I know it could cause a problem for them,” he said. “It could be for a scale, it could be for a certain kind of table, it could be a certain kind of diagnostic device, but I know that’s going to make the customer trust me more and understand that I have their best interest at heart.”
Learn from your mistakes
Do not over promise and under deliver. “I kind of chuckle, because we as manufacturers or distribution reps can agree, we all mess up sometimes,” said Allan. “We’re never perfect. Nobody’s perfect. Especially in this job where we’re pulled in so many different directions and we only have so many hours. We get very eager in the beginning stages of a big sale.”
Allan said he has been victim to letting the excitement and eagerness carry over into the post-sale process where it created unnecessary problems. “So, whether it is miscommunication on delivery timelines, installment requirements, or missing parts needed to make our equipment run, learning from our mistakes is key,” he said. “I’ve learned that slowing this process down and being thorough is the best way to go about it. Yes, a quick turnaround time or a deadline is important to meet, but if you blindly quote before finding out a customer’s true wants and needs, you sometimes can find yourself in a sticky situation that really could have been avoided.”
The power of presence
“Some of the best reps that I see, both reps and distributor reps, show up on site for a big shipment to make sure everything is good and nothing is broken,” Seymour said. This also allows the rep to leverage new meetings because of their on-site presence. They’ve just helped them with the project successfully, so it opens up additional discussions about future projects, he said.
“Strike while the iron is hot. Once you’ve helped them with something, don’t let it go. Try to figure out how you can be of more service.”
Do your part
Allan said he treats his distributor partners like customers. “When it comes to distribution, they have an array of equipment they can touch and sell,” he said. “Why should a distributor rep push my equipment? Find out how they’re incentivized and find out if your equipment can increase their bottom line, but also be someone they can rely on and trust. Response times, quick access to your product information and SKUs, being there for the delivery or training – these are all things that you should include in your approach.”
Get the details right, he said. “When we’re delivering tables, for instance, I wipe them down, all the dust is cleaned off and everything is all good, so I know the delivery is clean. When it comes to the end users, we’re brought in as the clinical experts on our product, so that is our chance to show why our product can meet their clinical needs. Sometimes the product can sell itself, but they’re also investing in your reliability and service. You have to do your part as a rep to make sure that not only the equipment is up to speed, but everything pre and post is intact.”
Ear to the ground
MTMC represents a lot of lines from well-known brands, and not just in capital equipment. “Those lines can help me gain an audience,” said Barefoot. Barefoot will often be in front of the customer to discuss a well-known brand when the opportunity comes up to propose product lines he has for other categories. It could be autoclaves, colposcopes, women’s health equipment, AEDs, etc. “It could turn out that I’m in a meeting with them about a more aggressive tier for, say, their flush syringes or safety hypo needles, and then we start talking about their sites and need for AEDs,” he said. “With the portfolio we have, it’s amazing. I could have somebody that I talked to just checking in to see if they need COVID/flu combo rapid test. I may call their distributor rep and say, ‘Hey, I’m going to reach out to this person and just see if they are looking at doing an early stocking request of a COVID/flu combo test.’ Next thing you know, we’re talking to them about equipment.”
The joy in a job well done
The hunt for equipment sales is fun, but the satisfaction of helping somebody with a really big solution and knowing you did a good job is extremely rewarding over things like disposable sales, said Seymour. “Some of these projects can be extremely rewarding, but they can also hurt. You could work on a project for three years, only to lose it in the end. There are no points for second place.”
But finally getting to the finish line, establishing firm relationships and then helping them through a high dollar sale, “there’s really not much more gratifying in sales because of the amount of effort that you’ve had to put in and oftentimes a lot of your own money,” he said. “Being an independent rep, we have to spend our own dollars to cultivate these. So sometimes over the course of a two-year deal, you’re spending a lot of time and money traveling to help customers. It’s important to put your best foot forward up front and make sure that you’re doing everything you can to get that sale for you and your family, for your manufacturer.
“But also, we believe in what we sell,” Seymour continued. “It is satisfying to know your customer is going to be sitting nice with your product in there. Some of those relationships that you cultivate over big deals are the ones that last the longest. There are people I met eight plus years ago that I helped with a big deal, and they’re still good customers today because we had to meet so often about some of those projects. So just like fishing, catching the big one is always very nice, but sometimes it takes a lot of time to do so.”
How to be dangerous
Equipment sales brings something new every day. “It sounds cliche but walking out of an account knowing you have a satisfied customer, and the potential earnings that comes with results like that … it’s an empowering feeling,” said Allan. “It’s why most of us are in the business, to earn for our family, and for me personally, it’s part of my competitive nature. As a rep, it’s exciting to work with so many different types of positions and people, from c-suite executives to an admin in an office or clinic and everyone in between.”
Reps have to learn how to call on all these different markets and people and call points. “But that can make us really dangerous in our role, because we have the diversity and ability to sell to different markets and people,” he said. “You become a jack-of-all-trades, and in reality that’s what makes us successful as manufacturer reps – we have a knowledge base with so many different products and we’ve learned so much over the time that we really can be trusted for all different types of sales situations.”