By Jim Poggi
How thoughtful questions, better data and a team approach can help physician office labs improve efficiency and strengthen their bottom line.
You hold a scheduled meeting with one of your best lab customers and ask them what they think of some new technology. Maybe it’s an exciting new waived chlamydia/gonorrhea system or a new waived fentanyl test. Would they like more information? Would a demonstration from the lab manufacturer make sense?
Their response: “We have been told to ‘do more with less.’ So, I guess that means new technology is out of the question for us.”
The experienced distribution account manager knows this sort of response should lead to more thoughtful probing to better understand the objection. In selling lab products, “no is the gateway to yes” is often true even when the objection is a softer “no” such as this one. Some probes that make sense here include:
- “Can you help me understand what ‘do more with less’ means in your laboratory?’”
- “How does your lab plan to implement a ‘do more with less’ program?”
- “Can you give me examples of how you are planning to ‘do more with less?’”
- “Who in your practice is the sponsor of this program?”
- “Who should I talk to in order to know more about it?”
The probes following the first, simplest and most open one will follow depending upon what you hear. It is likely that the direction to “do more with less” is direction dictated by the practice owner and/or the financial buyer who may be a member of the practice, or located at the IDN if the practice is owned. “Do more with less “is likely a response to a financial decision maker believing the practice or even just the lab needs to provide more profit to the practice.
This objection is not a threat if you remain confident, engage in thoughtful and non-threatening questioning, and are prepared as their lab consultant to show them how the lab can be more productive and produce more profit with the same level of staffing.
Develop a tailored plan to address the objection
To successfully counter this objection and secure your current business and set the stage for the possibilities of selling new solutions, you need to develop a well-detailed and thoughtful plan. Depending on how serious the practice is about their adherence to a comprehensive “do more with less” program, you will need some or all of the data and resources I will provide in this column. I have deliberately developed the elements of the plan to counter a worst-case scenario.
Things you need to know include:
1. Who is behind the “do more with less” strategy?
And, how can you gain access to that individual?
2. How firmly developed is this strategy?
Is it a core value or a slogan?
3. Do you have coaches at a high level in the practice or IDN?
These are people who can help you understand the landscape and get you the data you need.
4. Do you understand how efficient the lab is now?
For example:
- Are they automating the frequently performed tests? Do they have a high waste level of reagents?
- Are they sending out tests they could do in house?
- Are they performing tests they should be sending out?
- Are the personnel frequently idle?
- Do their personnel need re-training?
- Do they have systems that are obsolete and should be replaced?
- What does the lab staff think will improve efficiency?
- Are they using your company’s electronic ordering system effectively?
To understand whether any of these things are true, you need to set up a meeting with your trusted lab manufacturer’s technical resources to evaluate the lab and make suggestions for improvement. You need to be prepared to document them in a business review meeting as your work to develop a better “base case” of efficiency for the lab.
5. Do you have the ability to obtain the send out and monthly in-house testing data?
You will need it. Your lab manufacturer should be able to provide the in-house testing data and be able to answer the question about whether they should add new tests or send out more tests. You will need a coach in-house to help you get access to the send-out data.
6. You need the CPT code data on the tests they are performing and those they are sending out.
See the sidebar to scan the QR code to view the latest data.
7. Who are your team members?
You, your manager, your corporate accounts manager and your key lab manufacturer are typically those needed to develop a compelling argument and alternative program. Customer service may be helpful if your customer needs help learning your company’s electronic ordering system.
8. What is your discussion forum?
Do you have quarterly business reviews with this customer? Can you call for a special business review to specifically address and understand what they mean by “do more with less”?
What are the elements of cost to a practice?
If you go into a meeting with financial decision makers, you need to be prepared to discuss how to become more profitable. The Medical Group Management Association (MGMA) and other practice management authorities have modeled the costs of primary care and specialty practices. The following information is based on MGMA’s data. Before you engage with your client’s financial management, I strongly advise you to work with your manager and trusted lab manufacturer to be confident in the modeling you plan to present and be able to confidently provide objective, well respected sources.
Here is a typical cost summary I have found in my research. Personnel, including support staff and physicians, historically comprise about 65% of the cost to the practice. Reagents make up about 5%. Physical plant (rent and utilities) make up 5% to 10%. Administration, billing, legal and other costs make up the remaining 15% to 20%.
Remember and point out that a properly managed lab is a profit center, not a cost center. Sharing this data is not intended to create a debate about the specific costs of an element of this data, but to point out that a modest percentage of costs leads to potentially significant profitability.
When you meet what should you be proposing?
You should begin by thoughtfully listening and asking questions to gain clarity on their objectives. Share an empathetic viewpoint: “We understand the importance of profitability and efficiency in your practice and, as your lab consultant, we are prepared to offer some suggestions that we believe will make a meaningful difference in productivity and profitability. May we share our thoughts with you now?”
To be credible, think about developing two alternative scenarios. Strategically this is better since it gives the account two choices rather than one option, and it makes it easier to say “yes” and harder to say “no.”
If you have learned new information in the meeting, or if you still need to collect more information, you must request a follow-up meeting. One way to position it: “We have learned a great deal from you today and desire to provide you with our best, most comprehensive thinking on solutions we wish to offer for your consideration. In order to do so, we need a little time to gather information from the lab as well as our lab manufacturer. Can we agree to meet in another month?”
Pick a time that makes sense and stick with it. If they ask what data you need, be specific and go back to my list or one you have developed locally. Ask for access to their internal data if you have been denied this information. Be confident. To be a high-quality consultant, you cannot work without the right set of data. If they refuse, ask why and politely disengage. Sometimes patience is a better strategy than persistence, and strategies such as “do more with less” typically do not move forward in thoughtful, comprehensive, consistent and long-lasting ways. Stay in touch and wait for the right time to re-engage to offer your solution.
So, is “do more with less” a threat? It can be, but it is also an opportunity to work thoughtfully with a team who can help you gather data, consider options to make the lab more efficient and present realistic options to improve the efficiency and profitability of the lab.
Remember, they say: “do more with less.”
We say: “work smarter, not harder.”
You have the products, team and tools to develop the right solutions and present yourself as the lab consultant they can count on for solutions that benefit them. “Do more with less” can mean counting on you and your trusted lab manufacturers more than ever. It’s up to you to make it happen.
Key Takeaways
- “Do more with less” should prompt thoughtful probing to uncover the practice’s goals, decision-makers and definition of efficiency rather than ending the sales conversation.
- Account managers need solid data on lab utilization, staffing, testing volumes, send-outs, costs and workflow to identify opportunities for greater productivity and profitability.
- A coordinated team of the distributor, manager, corporate accounts and lab manufacturer can turn efficiency concerns into tailored solutions supported by credible business and laboratory data.
- When proposing solutions, listen first, present two realistic options and follow up with the information needed to position the lab as a profit center rather than a cost center.