18 months ago, COVID-19 began to change our world. For the first six months Suppliers were almost shut out of hospitals and supply chain organizations unless they represented Personal Protective Equipment (PPE), etc. Even with those sales meetings, “in-person” was rare. Zoom (or other virtual) meetings took over our lives.
COVID is continuing to disrupt healthcare organizations and their supply chains. As I’ve talked to Suppliers and Providers, they tell me that supplier meetings continue to be held 80% virtually. Is that good or bad and for whom?
Traditionally the Healthcare vertical is a complex channel for suppliers to navigate even before the disruptions caused by the COVID pandemic made it even more difficult.
- Selling to 6,000 hospitals, 500,000 non-acute locations representing $500 Billion on goods and services makes healthcare a huge industry.
- How do you know who the decision makers are within any organization? Management, physicians/clinicians, Supply Chain, Product Evaluation (Value Analysis) Committees, other.
- How are decisions made? How important are price vs total cost of ownership (TCO) factors? What is the customer’s selection criteria?
- Do GPO’s add to the complexity or to the solution?
How does the transition to virtual for most healthcare purchasing interactions impact the participants? It certainly is more efficient for both Suppliers and Providers. No one needs to travel and both can interact more frequently. But what about relationship development or new product introduction? How is that done effectively on a virtual basis?
Suppliers will be negatively impacted the most because they rely on in-person meetings. They are dependent on getting solutions to the point of use to demonstrate their products and services. They also build trust and loyalty through relationships which are more difficult to develop on a virtual basis.
However, the basics of successful buying and selling strategies haven’t changed. The method and mode used has changed but the basic strategies are still the same.
Traditional successful buying strategies for Providers include aggregating your buying needs by category, knowing the market, qualifying suppliers, establishing selection criteria, selecting supplier and managing the contract after selection.
Traditional successful selling strategies for Suppliers include selling strategic solutions, knowing the customer’s needs, link solutions to the need, knowing your competitive advantage, work as a team inside your company and offer quality products/services at competitive pricing.
Summary: The healthcare supply chain market is huge and is growing as the baby boomers age! It is a very complex industry. The real challenge is to navigate through it. It is competitive but there should be room for both long-standing Suppliers and new entrants. It takes work, strategy, talent and good products and solutions. And it needs to be done with the new methods of selling, i.e., zoom.
It reminds me of a quote from Juergen Bartels:
“Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion, or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death. It does not matter if you are a lion or a gazelle. When the sun comes up, you’d better be running.”
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