Meeting Customer Expectations: Rehabilitating the Sales Experience to Drive Revenue Growth for Healthcare Manufacturers
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1 Meeting Customer Expectations: Rehabilitating the Sales Experience to Drive Revenue Growth for Healthcare Manufacturers
2 CONTENTS Introduction 2 Determining Today s Revenue Drivers 5 Improving Customer Loyalty 8 How Does the Sales Process Accommodate Customers Needs? 10 Removing Complexity 12 Enabling an Improved Sales Experience 15 The Status Quo is No Longer Good Enough 18 1
3 Introduction Healthcare manufacturers are increasingly focused on growth to stay ahead of the industry s modern challenges. The traditional route to meeting revenue goals has been investing in in-person marketing, samples, supply chain improvements and competitive pricing. 2
4 Revenue generation in healthcare is changing as B2B buyer expectations evolve. Personalization and frictionless buying experiences are driving growth. B2C expectations are bubbling up into B2B purchasing, having a significant impact on how healthcare decision makers make purchasing decisions. Sales reps focus on building and nurturing key relationships with customers. This investment of time spent cultivating strong partnerships has long been essential to earning customer loyalty. Weeks, months, and even years--this significant investment is important to making and keeping sales. Ultimately, the focus on customer support prioritizes the part of the buyer s experience that happens after the sale. The reality, however, has changed. Modern commerce requires customer relationships to begin earlier. Today s customer relationships start with the first point of sale. 3
5 Sales reps who choose to react rather than proactively anticipate future needs miss out on opportunities to deliver amazing start-to-finish customer experiences. Passively waiting for orders or customer complaints can jeopardize customer retention. These customers may just decide to move on and choose new vendors. With intense competition, supply chain dynamics and changing marketplace environments, customer buying experiences are quickly evolving and developing. Healthcare manufacturers must change at the pace of the market or risk losses. 4
6 Determining Today s Revenue Drivers A 2015 survey from global business best practices firm CEB breaks down the key contributors to customer loyalty and repeat business into four categories: Sales Experience Company and Brand Product and Service Delivery Value Compared to Price 53 % 19 % 19 % 9 % The dynamic of B2B sales has changed, and buyers now demand to be served when and how they prefer. 5
7 Buyer s sales experiences are critical to the buying decision process. What do great sales experiences look like? In the past, sales were almost exclusively driven by direct interactions with salespeople. Today, procurement professionals spend less time with sales reps. The buyer s journey that purchasers experience now looks somewhat different with new resources and online information. Healthcare buyers are increasingly turning to vendors who provide the type of sales experiences they are looking for personalized, convenient and direct. Thanks to the availability of information online allowing buyers to seek out and compare vendors, the digital world now has a bigger place in B2B sales. HIMSS Analytics and Google s The Doctor Will See You Now: How Hospital Decision Makers Make Purchases highlights the significance of having a digital presence. According to their research, 90% of hospital decision makers use online search engines to help them identify vendors. After searching online, 28% made a purchase decision significantly, their purchasing experience was on the Internet. Survey respondents also showed a keen interest in product demonstration videos and online materials. Interestingly, online research informed about as many purchasing decisions (51%) as colleague recommendations (54%) did. 6
8 The sales funnel in these decisions was relatively short. 43% of buyers made purchasing decisions within six months. Only 18% took longer than one year. Healthcare purchasing professionals typically have a large number of stakeholders involved in the procurement process, yet many of their decisions happen quickly and with extensive input from digital sources. What does this data show? Procurement professionals who are dissatisfied with traditional sales experiences are seeking out alternative information, resources and opportunities. While buyers use the Internet for research and purchasing, this does not mean that sales reps are obsolete. It does mean that status-quo selling processes impede revenue growth for modern manufacturers, however. Healthcare buyers need suppliers that offer solutions without overly-bureaucratized sales processes. Creation of better sales experiences is the new challenge for healthcare manufacturers. 7
9 Improving Customer Loyalty Innovation and R&D do play a role in customer satisfaction and loyalty, but these factors are not enough to sway purchasing decisions. In fact, your customers may not perceive these improvements as major differentiators compared with your competitor s offerings. 89% 89% of B2B sales strategy decision makers agree that modern commerce puts the buyer in control; creates frictionless, transparent, and consistent experiences across all sales channels; and allows for dynamic, personalized offers and pricing, all powered by machine learning and data science. Source: Accelerate Your Journey To Modern Commerce, an April 2017 commissioned study conducted by Forrester Consulting on behalf of PROS. 8
10 As noted above, CEB s data shows that only a minority of customers see significant differences among the companies they purchase from. From these statistics, one logical conclusion is that today s customers believe most suppliers offer similar products. The value of great sales experiences grows in importance when customers think all vendors have the same offerings. Is this the death of innovation? Certainly not! Manufacturers should never stop innovating, but they should invest in the buyer experience if they want to create loyal customers for their future innovations. The buying experience is the most important factor in creating loyal customers. 9
11 How Does the Sales Process Accommodate Customers Needs? Quick, seamless solutions create satisfying customer experiences. Product quality is no longer enough by itself to capture B2B buyer loyalty. The B2B landscape is changing fast and starting to reassemble B2C sales procurement professionals want expediency, ease and personalization. These buyers are looking for vendors who can offer similar experiences to what consumers have in their everyday purchases. Buyers want the same level of control when shopping for medical devices, surgical supplies and EHR software that they already have when choosing a bottle of shampoo at the supermarket. 10
12 Data science and algorithmic recommendations increasingly allow vendors to provide personalization in B2B sales. As the healthcare industry continues to adopt modern commerce fully, more personalized buying experiences will happen online. Sales professionals can use customized information about their prospects to develop unique sales experiences so each customer they serve can receive customized attention. In the future, healthcare sales reps will spend less of their time completing administrative tasks and more time developing relationships and making sales. The result is a streamlined, reinvigorated sales process that delights customers and makes salespeople s jobs easier. 11
13 Removing Complexity Complexity is a major obstacle to a superior sales experience. R&D and other internally focused departments force salespeople to jump through unnecessary hoops to secure pricing and deals for their customers. In today s B2B environment, the customer and salesperson ultimately lose. This system is a burden. Healthcare customers know that. Unfortunately, a lot of manufacturers learn this lesson the hard way. A lack of effective communication and cooperation between departments worsens this problem. Manufacturers that offer the right product do not always make the sale, even with lower pricing than the competition. According to InsideSales.com, 50% of buyers choose the vendor that responds first with a quote. If your sales reps are spending most of their time preparing pricing proposals, you may lose the bid to another supplier. Having the right solution at the right price is worthless if your competitor quotes before you do and steals your opportunity away. Buyers have evolved, and their experiences in the B2C world are shaping their expectations in the B2B world. Companies must evolve with them. 12
14 Do these sales process frustrations look familiar? 1. Pricing deals often take days to turn around. 2. Internal negotiations on a deal or price are the single biggest obstacle to deal finalization, negatively affecting sales. 3. Multiple price or deal iterations negatively impact win rates. Each of these factors stunts sales growth. Considering each touch point the typical healthcare salesperson must go through to secure a deal, there is a significant gap between customer needs, expectations and reality. 13
15 The image below shows the most important factors that make the sales process more complicated. Together, these challenges add up to lost time and opportunities for healthcare manufacturers. After viewing this graphic, the obstacles to an optimal customer experience seem overwhelming, almost insurmountable. Six, eight or even ten people often must navigate complex processes and systems just to get a single deal out the door. Manufacturers find themselves in a balancing act between speed and quality. 14
16 Enabling an Improved Sales Experience Being successful as a healthcare manufacturer means being sales-savvy. Companies cannot rely on brand alone to drive repeat and incremental business. Healthcare manufacturers need to: Reduce deal turnaround time Provide fair pricing Eliminate internal price negotiations Through pricing optimization, manufacturers make it easier for customers to purchase the products they need at reasonable prices. Having less bureaucracy within the sales process ensures that customers can have a kinder, higher-quality sales experience. 15
17 A broad set of data science-driven pricing and configure, price, quote (CPQ) tools provide sales teams with actionable insights to make decisions with confidence and close deals quickly, accurately and profitably. Price optimization and guidance tools leverage data science to help manufacturers determine a customer s real willingness-to-pay for any product at that exact moment in time. This shortens deal cycles, boosts margin and improves customer satisfaction. 16
18 Configure, price, quote (CPQ) solutions enable manufacturers to offer the right product and, with integrated price guidance at the right price. Smart CPQ tools can also provide salespeople with data-driven upsell and cross-sell recommendations. CPQ and price optimization capabilities drive profit and revenue for the business, including 2% - 4% improvement in incremental revenue and up to 15% in incremental margin. Organizations that base quotes on segmentation analysis, customer buying patterns and market data get the most value out of deals. These companies also limit the exposure and risks associated with maverick discounting as a deal closing tactic. Healthcare manufacturers, in turn, can offer a better experience and delight their customers with a friendly buying process. Through data and analytics, sales teams have the information they need to make the sale without frustrating their customers. 17
19 The Status Quo is No Longer Good Enough The time is now for healthcare manufacturers to look beyond traditional revenue growth tactics. Consistent growth is unsustainable without focusing on the customer sales experience. In fact, manufacturers can lose revenue unless they implement a customer-centric sales process. Quality improvements, production efficiency, pricing and marketing will only go so far. Revitalizing sales methods in the face of revenue challenges does produce better sales results. B2B customers today want manufacturers to deliver a fast, frictionless, precise sales experience. Healthcare manufacturers that provide exceptional buying experiences will ultimately win more sales in the long run--delivering on their promise to let innovation guide the industry s future. Sustained revenue growth rewards the sales team that knows how to personalize, serve and delight their customers. 18
20 The eight PILLARS of modern commerce Personalized Algorithmic Omnichannel Real-Time Relationships, reciprocal loyalty & personal recommendations. Transparent The secret sauce of success. Frictionless Customer buys in whatever manner, from whichever partner. There s no better time than now. Dynamic Mobile The recipe for What the buyer sees is Fast, efficient and successful commerce: what the buyer gets. modern flow. Anywhere. Any time. Adapt. Act. Repeat. 19
21 About PROS PROS Holdings, Inc. (NYSE: PRO) is a cloud software company powering the shift to modern commerce by helping companies create personalized and frictionless buying experiences for their customers. Fueled by dynamic pricing science and machine learning, PROS solutions make it possible for companies to price, configure and sell their products and services in an omnichannel environment with speed, precision and consistency. Our customers, who are leaders in their markets, benefit from decades of data science expertise infused into our industry solutions. To learn more, visit pros.com/industries/healthcare Copyright 2018, PROS Inc. All rights reserved. This document is provided for information purposes only and the contents hereof are subject to change without notice. This document is not warranted to be error -free, nor subject to any other warranties or conditions, whether expressed orally or implied in law, including implied warranties and conditions of merchantability or fitness for a particular purpose. We specifically disclaim any liability with respect to this document and no contractual obligations are formed either directly or indirectly by this document. This document may not be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without our prior written permission
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