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Objective: Launch group purchasing services
Our team was engaged to launch group purchasing organization (GPO)-type services into the relatively untapped elective surgery center marketplace. Our client was highly proficient operating in the traditional acute care environment where the GPO business model is well established and delivers a consistent, predictable rate of return. However, given that the concept was relatively novel in the elective surgery segment and the scale of consumption was dramatically different than that in a hospital environment, we recommended prototyping the sales process prior to a full-scale launch.
Project
First we profiled optimal surgery centers for the service and then evaluated the population density of those accounts as well as the associate rate of procedures throughout the country. We then aligned the rate of procedures with the products consumed to determine market saturation opportunities. After determining the areas that offered the highest density of potential accounts and associated procedures (while minding operating expenses), we targeted Florida for the site of the prototype launch.
Next we evaluated the buying criteria and buying influences within the targeted account base. We determined through the use of IA2® (intellect, authority, and affordability) the true prospect within this segment—profit-driven businesses that did not depend on reimbursement for cash flow. The owner-physician (or group of owner-physicians) has the greatest stake in driving profitability as well as having the intellectual ability to understand the value proposition, the authority to sign the contract, and the ability to afford the service.
Finally, we determined the type of sales representative that best suited the environment. We learned quickly that the traditional sales talent employed in the established GPO segment was poorly suited for the task. Instead, the environment required dedicated sales representatives that could not only tend a territory, but actually build it from the ground up. These sales reps needed to operate within a two- to three-hour driving radius, thereby eliminating the need for air travel and minimizing excessive overnight stays. This optimized the ROI for each sale resource deployed, and compensation was heavily weighted toward incentive pay on incremental contract growth.
Results
Within 90 days we were able to establish and optimize the sales model, dramatically accelerating the client’s learning curve while containing costs and minimizing exposure to the greater marketplace. Our Sales Prototyping® process revealed that the client’s assumptions that their existing sales support infrastructure for the acute care customer base was poorly suited for the new dynamics of the surgery center marketplace. This alone saved the client substantial growing pains and the potential for costly missteps which, if executed over a large customer target base, could have easily derailed the market’s confidence in their service and delivery capabilities.
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