Uncovering Customer Concerns Requires Going Beyond Price

Originally contributed to LTEN’s Focus on Training Magazine.

By Steve Gielda

It’s fair to say that life sciences sales teams have encountered more changes in the past five years than they did in the previous 30 years combined. Furthermore, it appears the changes will not only continue but will accelerate.

Medical device and pharmaceutical companies face pricing and regulatory pressures and the need to reduce sales costs to improve margins. Revenue growth for many is flat (or even declining) in what is viewed by many as an increasingly commoditized, undifferentiated sector. Many customer concerns in life sciences center on a perceived lack of value provided by the salesperson during the sales process. The common knee-jerk reaction for salespeople operating in such a commoditized or undifferentiated market is to lower the price to effectively compete or win.

Evaluating sales opportunities that were both won and lost, a common culprit frequently rears its ugly head: price. In fact, in 74% of the loss analyses we conducted, the salesperson blamed a lower-cost competitor as the primary reason they lost. Yet, when we interviewed those same customers, “price” or a lower-cost competitor was the reason only 22% of the time. Quite a disconnect, to say the least…

Price can be easy to blame, and sometimes it really is a significant factor. But frequently it simply isn’t.

Digging Deeper to Find Customer Concerns

At a large life sciences company, salespeople were constantly complaining to management about losing deals because their price was not competitive in the market. Management thought the current pricing model was correct, but to be sure, they needed a deeper analysis with real feedback from lost prospects.

Interviewing past clients and lost prospects, the first things explored were the decision criteria used to evaluate against other companies being considered.

Although the definitions used by the prospects to describe their decision criteria weren’t always the same, the most common criteria mentioned were quality of patient care, physician adoption, supplier innovation, service and support, and price.

Prospects were asked to rank their top two criteria. Surprisingly, price was in the top two for only 15% of those potential customers surveyed. Instead, most prospects cared more about patient care and physicians’ use of the product.

One customer was even quoted as saying, “If the physicians are not comfortable using the product, then it would only mean more work for our hospital nursing staff.”

The second area explored was around the key influencers involved in making the decision. The company assumed, based on sales team feedback, that in most cases the physician had the final purchase authority. Unfortunately, the prospects said otherwise. Yes, the physician played an influential role, but in the end, other influencers had far more say in the decision than the salespeople understood or believed.

An Action Plan

After the analysis, the feedback surprised the salespeople and their manager. Even more, they were disappointed. They had industry reports proving that their product was the safest solution on the market. They had references that could speak to its ease of adoption and patient safety, yet they still lost. And equally important, they discovered that their competition was speaking with individuals that they weren’t.

What’s the call to action?

Ask your salespeople:
• If they know the top two or three decision criteria (other than price) that their customer is using to compare their solution to the competition. (Note: having relationships with multiple stakeholders for any sales opportunity increases the likelihood of winning by almost 3X).
• What unique capability of their solution is this customer undervaluing, and what is their plan to create stronger perceived value for those one or two unique capabilities of their solution?
• If they know which competitors the prospect is speaking to and which they’re not. Who can they talk to within the account to find out?

Unfortunately, this is a common scenario. Many salespeople don’t know the decision criteria, much less which criteria are most important to the customer. Salespeople also assume, often incorrectly, that they are working with the person most likely to help them seal the deal.

Keep Looking For the Real Customer Concerns

If you’ve lost one or more major opportunities recently, why did you lose? If your answer is price, then peel back the onion to see if there is more to the actual customer concerns than realized.

Maybe this will help. Answer the following questions about a recent lost opportunity:

• Other than price, what were the customer’s decision criteria they were using to compare you against the competition?
• Which of your unique capabilities were not considered in this customer decision criteria? Why not?
• How did this customer rank the decision criteria from most essential to least essential?
• How did this customer perceive your company’s ability to meet these criteria compared to the competition?
• Based upon the top three key influencers involved in the decision, whose criteria mattered most?
• How did the decision criteria differ from the top three key influencers?
• What did you do to validate the decision criteria you were provided?
• Who is your competition speaking to that you’re not?

If you’re not able to truthfully answer most of these questions, it’s time to look in the mirror and ask yourself if you might be making some assumptions that led you to lose your last sale.

Bring the Full Picture Into Focus

Many salespeople often spend much of their time evaluating opportunities on their own. However, experience has shown that the best plans are developed with opinions and input from multiple people, including their managers, colleagues, and even an internal champion.

These alternative perspectives can help ensure that you’re not making assumptions about customer concerns and an opportunity is evaluated from a variety of angles. When done right, it takes a little more time to explore the answers to these questions, but in the end, you will win more and lose less.

Steve Gielda is the co-author of Ignite Your Sales Strategy: A Field Guide to Accelerating Your Pipeline. You can purchase your copy here or wherever books are sold. Follow or connect with Steve here on LinkedIn.