Traditional business development lore holds that the key to deal closure starts with getting in the door – ideally with a referral, and then presenting a compelling value proposition. Most experienced business development experts also understand that having a sufficient relationship with the buyer to establish both trust and likability are very important.
Buying decisions are made by people. And people are different – individually and in groups. Buying in complex organizations usually happens with both a formal and an informal process which may or may not be aligned. No two organizations are alike. The reason close rates are so low is due to a misunderstanding of the detailed dynamics of buying decisions in individual organizations, leading to a lack of knowledge in how to leverage them for specific types of offerings to specific prospects.
Here are the 4 most important dynamics of the buying process:
1. Your Target Buyer(s)
Start with the goal of identifying and getting in front of the buyer(s). For products and services of any significant complexity, price, and operational impact there is almost never just one buyer. Sure, there is a senior executive who ultimately owns the applicable budget, but typically you have multiple people comprising a formal or informal buying group or team to talk to and convince:
- Budget owner
- Executive of major accountable functional area
- Executives of other significantly impacted functional areas
- Senior staff of executives above
- Other internal and external stakeholders potentially including influential board members, community representatives, regulators, professional organizations, advocacy groups, etc.
2. Buying Authority
It is critical to understand and account for each individual’s buying authority.
- Are they the only one or one of several decision maker(s)?
- Do they have veto power?
- Are they an influencer?
- Who do they influence?
- How much weight do they have individually, and combined, in driving a buy decision?
Importantly, there may be both official and unofficial answers to these questions. Answering them accurately can be a delicate process – especially as it relates to reality versus the party line. Often using expert outside resources with a variety of information gathering techniques exploits both direct and indirect means to obtain accurate and actionable intelligence.
The end result of this information gathering should be a buyer group social map indicating the buying group players, their roles, and their weight in driving buy decisions.
3. Decision Making Drivers
What will each person on the buyer group social map respond to? What will gain a positive buy recommendation or decision from each individual? Our research and experience suggest these areas of focus to maximize deal closure rates:
Individual Value Propositions
Individual buyers in the same organization typically respond to variations on a value proposition. You need to discover and respond to what each individual values. It may be:
- More customers or market share
- Financial return on investment
- Better healthcare outcomes
- Greater employee, member, or patient satisfaction
- Implementation or operational ease
The point is, that if you know what each person in the buying group values you can leverage that information to tailor your value proposition so it has the greatest impact.
Healthcare organizations, like all organizations, are managed by executives with political perspectives and agendas. While ideally these would not influence decision making for the organization as a whole, in reality they certainly do. Knowing these things about each member of the buyer group can be crucial to your sales positioning and messaging to each individual:
- Are certain executives more or less likely to disagree with their peers or bosses?
- Are there political imperatives to placate community or advocacy groups, or maybe regulators?
- Are there individuals who can and would like to enhance their internal power with the right type of solution?
- Are there others who are not in a position to take any risk?
Related to political incentives, there can be very personal decision making drivers of very different types for individual buyers. Perhaps a new executive on the team is looking to make a splash. Maybe an executive is planning to leave the organization for personal reasons and is able to take more risk than before, or wants to leave a legacy that your offering can deliver. And there are always personal relationships with seller affiliated individuals through marriage, fraternities, charities, previous employers, etc. to account for and leverage.
Getting access to this level of critical information on buyer drivers can be a sensitive process. Again, we recommend use of outside resources specializing in this type of direct and indirect intelligence gathering.
4. Buying Process
Typically, there is both a formal and an informal buying process to understand and leverage.
The official process for acquisition and procurement involves procedure, protocols, and paperwork to be sure you are legal, reliable, and probably sustainable. There may be a Purchasing Department with ties into the Legal Department. There may be contracting officers who will have to get involved with actual detailed contract terms and terminology. The process itself may require a formal Request for Proposal and competitive processes with multiple bids, depending on the product or service or its cost. There may be proposal submission requirements and deadlines with which to comply.
It may be the case that you can be successful selling through an informal process. But you will inevitably end up having to also comply with the formal process anyway so you need to understand what it is and respect it. The good news is that this information is usually readily available from the prospect.
Discovering the informal buying process can be more challenging since they are not documented and often not necessarily acknowledged. And most challenging of all they usually differ by situation.
Organizations make buying decisions in different ways. Some have one accountable person who listens to all input and then decides. Some require consensus. Most are a combination depending on the scope of operational impact of your offering. Even then, the exact approach often depends on the type of product or service being offered, to whom, and the total projected cost and complexity of the process for acquiring and operationalizing it.
Sometimes a competitive bid situation can be avoided in the right circumstance. Sometimes the weighting of decision factors can vary from the formal process requirements. Maybe a particular department prefers to invest in pilot projects prior to full commitment. Maybe a department informally requires comprehensive demonstrations to all stakeholders, while another doesn’t value demonstrations at all but likes performance guarantees. There can be almost infinite variation in informal buying processes.
This informal process must be discovered and complied with. Ignoring it (or not knowing it) and only paying attention to the formal process leads to very low success rates. Again, it may require less direct methods to discover the real if informal buying process for each specific situation.
To learn more about how to close Healthcare B2B Deals, check out the free eBook: