There has been an upsurge of HealthTech solutions that have been designed to address chronic problems in the healthcare space. Many of these organizations are innovation-stage startups that are vying to gain market share with large health systems.
These firms work diligently to raise money, build an infrastructure, and craft an innovative and sometimes disruptive solution that targets these chronic problems that hospital systems deal with.
When the time comes to full throttle into the market and build the sales and marketing engine, sometimes the leadership (especially if they come from a technical background) have flawed assumptions.
The Myth of the Hot Rolodex
For years there has been a persistent theme that has come up in the context of recruiting senior level business development executives.
Often the request is to find someone who comes to the table with a “Hot Rolodex” in the market that the company leadership hopes to penetrate.
[Sidebar] I am aware that there may be a generation of professionals that may not be familiar with the term Rolodex (or will ever own one!). But for purposes of clarity prior to Outlook or CRMs the physical card file system most professionals used for managing contacts, phone numbers and other information was marketed under the brand name Rolodex. So the eponym stuck as identified with one’s industry contacts.
Some call this the “Golden Rolodex” or their “Existing Book of Business” and additional names. The inference being that a senior commercial executive joining a new organization will walk new business in the door immediately based on an existing network of ready willing and able buyers eager to sign up because of this trusted relationship.
Some say this is a flawed strategy and outdated. That hiring a senior business developer or commercial leader should be based on their overall skills, market knowledge and understanding of buyer motivations.
Other adhere to the idea that the shortest distance to revenues is “buying” relationships via a new hire who can jump start the sales process.
No Free Lunch
Unfortunately, in the specific area of selling complex enterprise solutions, there is no free lunch. The reality is that sales cycles for enterprise solutions take time.
Having that coveted “book of business” or prior relationships with potential buyers of one’s solution has been statistically proven to not make an appreciable difference in accelerating the road to revenues.
Why is this the case? There once was an era where there simply were fewer stakeholders that influenced the adoption of new technology. In days past if an influential physician were onboard with your product, he or she could drive the adoption of your solution based on their influence.
This is not limited to hospitals and large systems as a model. Other market verticals use this same key opinion leader or “KOL” strategy.
The problem in healthcare is that these once very powerful key opinion leaders have become hospital employees.
As of 2022, 75% of physicians work as employees of hospitals.
Why It Matters
As the percentage of physicians working for hospitals increase, these doctors have less influence over hospital administrations on decisions such as product or service selection and new technology adoption.
Physicians are emphasized here because they were often in the past the trigger to new product/service sales. This is when they exerted significantly more influence on buying decisions.
Consequently, part of the persistent mythology in healthcare around the “Golden Rolodex” has much to do with having physician contacts who will “grease the skids” and drive a sale.
Proof
Recently we put this to the test in the market. We posed the question to commercial leaders in the healthcare technology space to see what they thought.
The survey directly asked whether it having a large network, Rolodex or book of business was an essential qualification for success in selling enterprise solutions in today’s market.
In other words is it:
Yes, it is an essential qualification?
or
No, it is not an essential qualification?
The response:
83% said NO, that it was not an essential qualification
17% said YES, that it was an essential qualification
So, based on what accomplished commercial professionals who are on the front lines with customers have experienced, having a so called “book” of contacts has been proven to be less essential to success.
Why is this? The answer is that it is difficult to convert these customers solely on the basis of a past trusted relationship.
When put to the test in the field a past contact may be able to jump start a first meeting but it is not nearly enough when there are multiple stakeholders with multiple agendas. The decision will likely depend on the strength of the value proposition–not on the strength of one’s relationship.
So we decided to put this to the test.
Alternative Approach
So what should the approach be to getting traction in hospitals and large health systems?
More and more successful HealthTech companies are taking a gated enterprise approach to building a sales engine.
For example, one company selling a SaaS based solution to large hospital systems created a highly effective machine that moved large customers through their qualification process.
Marketing and sales would work hand-in-glove to map the market and identify the clinical, financial, legal and information technology influencers that were essential to a sales decision.
Marketing would engage initially with promoting relevant content targeted at each of the different audiences that would influence the sale. A content marketing and promotion campaign was undertaken that was tailored to the specific pain points and areas of interest of each of these various stakeholders.
This approach was shown to be highly effective at capturing customer mind share by breaking through the noise and hitting influencer hot buttons.
Prospects would have to demonstrate their interest and willingness to learn more as they progressed along the customer journey. It was only after these qualified prospects had passed through the qualification “gates” that sales would engage directly with the customer-not before.
This proved to have a much more meaningful, productive and efficient sales engagement with a well-educated and interested prospect.
Data Driven or Relationship Driven
So times are not as they once were obviously. But more needs to be done to bust the myth of the “Golden Rolodex”.
Today customers in the healthcare space crave solutions to their very challenging problems. Take a page out of the playbook of those who have leveraged information to educate their customer into making better decisions.
Buyers of sophisticated health technology products are looking for insights and data that address the attainment of their goals and challenges.
Relationships are important and still are an essential part of the buying process. However, the currency that builds trust in today’s market is data, insights and solutions first that leads to solid relationships.
JP Boyle & Associates, Inc. helps HealthTech organizations build effective teams with leaders that possess insights into what customer’s needs are and how to align with theses.
For more information on how we can help you, please contact us to begin a dialog.
