‘It is not necessary to change. Survival is not mandatory.’”
(Deming)
So we are pretty convinced that this is our industry’s next wave…
1
Tech Leaders Who Missed Their Next Wave
Burroughs • Sperry Univac • Honeywell • Control
Data • MSA • McCormick & Dodge • Cullinet •
Cincom • ADR • DEC • Data General • Wang •
Prime • Tandem • Daisy • Calma • Valid • Apollo
• Silicon Graphics • Sun • Atari • Osborne •
Commodore • Casio • Palm • Sega • WordPerfect
• Lotus • Ashton Tate • Borland • Informix •
Ingres • Sybase • BEA • Siebel • PeopleSoft •
Nortel • Lucent • 3Com • Banyan • Novell •
Quest • America West • Nynex • Bell South •
Netscape • MySpace • Inktomi • Ask Jeeves •
Yahoo! • Blackberry • Motorola • Nokia • Sony
Industry Response to this shift?
How has our industry
reacted to this shift?
Progression of Economic Value
differentiated
transformations
experiences
competitive
position
services
goods
undifferentiated
commodities
market
premium
pricing
Source: B. Joseph Pine II & James Gilmore The Experience Economy (1997, 2011)
Are there a variety of unique and innovative solutions? Or, do
vendor offerings look VERY similar.
The word that Dave and Jack used on Monday night was
“homogenized.”
Much of the medical software market has allowed itself to march
down the path to homogenized, undifferentiated products and
services that are competing on price. We call that a commodity.
(Uh-oh.)
(One could argue that the federal mandate for EMR “forced” us in
to this corner.)
Source: B. Joseph Pine II & James Gilmore The Experience
Economy (1997, 2011)
The Experience Economy (1997, 2011) (WORTH THE READ)
AND/OR see the HBR article, “Welcome to the Experience
Economy”, July–August 1998
If the fruit at your fruit stand looks the same as from the one next
door - what happens when the Customer cannot discern a
difference between what you are selling and what the other guy
is selling?
Compete on price and lower price wins? Do we REALLY want to
compete on PRICE alone?
Amazing Charts pricing
$1200 + 1195/year + + + (but still)
Practice Fusion Pricing
“All devices. Always free. No strings attached.”
Is progression to
commodity
inevitable?
(NO!)
An Example of Experience
What does Harley do? Do they sell motorcycles?
“We sell the ability for a
43-year-old, mild-mannered
accountant to dress in
leather, ride through a
small town, and have
people be afraid of him."
Clyde Fessler, former Harley-Davidson VP
“What we sell isn't actually a bike. It's the ability for a 43-yearold, mild-mannered accountant to dress in leather, ride through a
small town, and have people be afraid of him."
Clyde Fessler, former Harley-Davidson VP
So, what do they sell?
Experience: The Harley community
Experience: Rebel Lifestyle
Harley owners are fiercely loyal. They are part of a community.
They are connected to people they have not even met yet and
feel that they understand each other. They won’t switch brands,
because they would have to give up their place in the Harley
Community. I heard someone put it this way, “You think your
customers are loyal? I don’t see them tattooing your logo on
their ass!”
--They understand each other, even if they’re meeting for the first time.
Being a part of the Harley community is an integral part of how they
define themselves. Harley riders won’t consider replacing their
motorcycle with another brand. Why? Because that would mean giving
up their place in the Harley community, and that isn’t going to happen.
They are just too invested.
http://www.inc.com/les-mckeown/how-to-get-loyal-customers.html
Starbucks got us to pay $4 for a 50-cent cup of coffee. It was NOT
the coffee; it was the experience.
It is the experience. I am NOT buying a motorcycle at HarleyDavidson. I am NOT buying coffee at Starbucks.
Another response to commoditization?
VAR
YOU (VAR)
[Recap State of the Union remember the past environment]
The Buyers needed us
Back then, it was not uncommon for a doctor to call us because
he or she wanted us to come in and educate them. We had
seminars to educate people etc.
Remember when?
I know this will blow anybody born after 1985 away – but there
was no internet then. People actually got on planes and flew to
Las Vegas or NYC to see the latest computers etc. Did I just blow
your mind?
A Different Kind of Buying Has Emerged
OK, so what about today? What is different?
A different kind of buyer has emerged
Are these potential customers calling US?
Are they calling us for this information? Does it feel like the old
days?
When do they call us?
If they do call us for information, when do they call? At what
point in their process do they call us?
When Do They Call Us?
57%
Customer
Due Diligence
Begins
Many “Channels” of information on EHR
There is a HUGE amount of information out there. Medical
societies, specialty societies, government groups, government
contractors. The internet. (It must be true, I read it online.)
Customer
Purchase
Decision
It is sales canon that you want to be as far to the left on this line
is possible. You want to help set the criteria, not deal with
someone else’s.
This number is based on about a decade’s worth of research by
CEB across many industries and with thousands of sales people.
Buyers do independent research and set their own purchase
criteria all ahead of the first seller interaction.
This is why we get leads that want us to email them a price
before scheduling a meeting or a demo. They know what they
want. It is a commodity and the only variable that matters to
them is price. They actually say, “You guys all do just about the
same thing, right?”
CEB also has done a ton of research on another important aspect
of this discussion
So, we don’t want to be perceived as a commodity and may have
to disrupt peoples thinking if they view our industry that way.
We are not selling oranges on the side of the freeway.
We are creating long-term, mutually beneficial, mutually
profitable relationships. Right? We are creating capital “C”
Customers.
So is Customer satisfaction enough?
Satisfaction or Loyalty?
Let me ask you a different way, do you want your spouse to be
satisfied or loyal? Loyal, right?
Customer Satisfaction is Worthless, Customer Loyalty is Priceless
That’s the title of a book by Jeffery Gitomer but it is also
supported by serious research by CEB and others.
“Customer Satisfaction is Worthless,
Customer Loyalty is Priceless.”
CEB found that there are four key drivers to Customer Loyalty.
Source: Jeffery Gitomer
Key Drivers of Customer Loyalty
Company and Brand Impact
Product and Service Delivery
The key drivers to Customer Loyalty are:
Company and Brand Impact
Product and Service Delivery
Value-to-Price Ratio
Purchase Experience
Value-to-Price Ratio
Purchase Experience
Source: CEB
Contribution to Customer Loyalty
Key Drivers of Customer Loyalty
CEB then quantified how important each one of these items are
to differentiation.
Ideas on % for each? 25% each? Are some more valuable than
others? Surely Product and Service Delivery are the biggest
differentiators? The data do not support that conclusion.
Purchase Experience is 53%. Is this surprising to anyone?
Company and
Brand Impact
Product and
Service Delivery
Value-to-Price
Ratio
Purchase
Experience
Here’s the thing: Vendors tend to do the same things. Similar
product capabilities, similar service, similar pricing, …
So the Customer’s Buying Experience is the largest factor in
differentiation that drives Customer loyalty!
Key Drivers of Customer Loyalty
Offers, unique, valuable perspectives on the market
Helps me navigate alternatives
Helps me avoid potential land mines
Educates me on new issues and outcomes
Is easy to buy from
Has widespread support across our organization
I had a hard time with this one but the research makes a good
case and we can point you to it.
What makes up the “Purchase Experience”?
 Supplier offers, unique, valuable perspectives on the
market - INSIGHT
 Supplier helps me navigate alternatives - INSIGHT
 Supplier helps me avoid potential land mines - INSIGHT
 Supplier educates me on new issues and outcomes INSIGHT
 Supplier is easy to buy from
 Supplier has widespread support across our organization
Source: CEB
This list actually has around 20 items on it, these are the top 6.
Remember that Company and Brand Impact, Product and Service
Delivery, and Value-to-Price Ratio are vitally important. It is just
that in today’s world, they are the ticket to admission. If you
don’t have them, you don’t even get to play.
No, really, purchase experience is
53%?
So if purchase experience is the largest factor in differentiation
and loyalty creation….
WE think we need to be more intentional about defining it. We
started to refine our methodology and process. We want to work
with you on this.
A lot of sales methodology has been around for a LONG time.
AIDA has been around since the 1890s. [Elias St. Elmo Lewis is
credited with coming up with AIDA]
Attention (awareness): attract the attention of the customer.
Inform the customer.
Direct benefit: convince customers that they want and desire the
product or service and that it will satisfy their needs.
Action: lead customers towards taking action and/or purchasing.
Although this is really targeted to the marketing department, it is
still taught to sales people today.
Approaching a customer
Demonstrating
Objections
Closing
A sales process still followed today:
Approaching a customer
Demonstrating
Objections
Closing
This is what we do, right? New? Nope, This is from the early 20s
in “The Primer” by NCR’s John Patterson.
Solution
Selling
-[Patterson was famous for firing people; including Thomas
Watson Sr., who went on to become General Manager, then
President, of CTR, later renamed IBM.]
In the early 60’s IBM was training reps to be expert not only in
IBM’s products and services, but in the businesses of the
companies and industries to which they sold. I think they really
were inventing solution selling back then but I don’t think they
called it that. In 1975, Frank Watts developed the sales process
dubbed "solution selling.”
Solution selling is a sales methodology. Rather than just
promoting an existing product, the salesperson focuses on the
customer's pain(s) and addresses the issue with his or her
offerings (product and services). The resolution of the pain is
what constitutes a "solution".
Relationship selling teaches salespeople to form well established
associations with consumers in order to uncover needs and
promote repeat purchases.
Relationship
Selling
Huthwaite International developed SPIN while working with
Xerox. It is a modification of solution selling. Huthwaite did an
extraordinary amount of research to develop SPIN.
SPIN
Selling
SPIN:
Situation Questions
Problem Questions
Implication Questions
Need-Payoff Questions
Miller Heiman
Strategic Selling
and
Conceptual Selling
Situation
Problem
Implication
Need-Payoff
The
Challenger
Sale
Professional Sales Training
In response to today’s online, educated buyers, the most
successful sales reps ‘challenge’ their clients rather than simply
uncovering needs and offering a solution. Backed by extensive
research, it provides a solid approach for establishing trust and
differentiation in a competitive environment.
Some top options in Sales Training
Let me know if you want to learn more about any of this. I (Geoff
Barnes) am happy to share information and recommended
reading.