Why Transactional Sales Are Dying in Healthcare And Whats Replacing Them With Marney Reid and Erika DeLeon

Speaker A: Foreign

Speaker B: welcome to Connect to Develop, where we bridge healthcare strategy and leadership insights.

Speaker A: Welcome back to Connect2Develop. I'm your co host Marni Reed and today we're digging into how business development and sales strategies have really evolved in a world where customers just have more information and more options than ever before. So we will talk about the old transactional sales model and how in our opinion, it really doesn't work. And that teams are shifting now more towards a relationship driven approach that creates strong M partnerships between companies and their customers. Before we dive into that, I want to give a personal nod to someone who really shaped how I think about sales and leadership and that's Jeremy Lehner, author of the Point Guard Approach. Jeremy was one of the most influential managers I've had. He really taught me that great salespeople don't just focus on a number, they focus on KPIs and exceptional customer service that really open opportunities. And then after that, honestly, what I think the most important part is the after the close, right, or after the sale, and that's maintaining exceptional customer service. And to take something out of his book, strong sales teams don't close deals. They create opportunities and they see the whole court. They set others up to win. That's really the mindset that we're going after in today's episode.

Speaker B: Yeah, Marnie, such an important conversation. I'm glad we're covering it. I guess the first place that we'll start is really on this section around why transactional sales are dying to begin with. And so let's start with, I think just the industry obvious across healthcare. And that's really this idea and this notion that healthcare leaders are just overwhelmed. When you think about all of the aspects of the business that they are overseeing and responsible for, they're really navigating more information, more vendors, more innovations and increase in demos, more competing priorities. And probably, you know, if we were to interview a subsector of them, it probably the majority that say that they are really overwhelmed with all these areas or it's probably more than ever across their career. And the greatest risk around having so much information and feeling overwhelmed by that information is that you come to a place where you have so much that you're looking at that you ultimately don't make a decision. Not necessarily that you're making bad decisions, but that you're just really not making a decision. That's exactly this whole concept called the jolt effect, which, you know, was fairly new for me until recently, but really it's this whole framework and idea around you Basically get lost into not making a decision. And I think this extends far beyond sales. We see it in leadership, we see it in healthcare systems, we see it in organizations trying to adopt new technologies, launch new initiatives or really just solve persistent challenges. I would argue even see it in our personal lives as well. Ultimately the volume of choices has really increased, but clarity hasn't always kept that pace. And so when buyers are overwhelmed, the safest answer often becomes, let's wait, let's revisit next quarter, let's gather a little bit more information. And while that might feel like the cautionary step to take, it often does come with its own cost. But. And the challenge for today's organizations isn't simply helping buyers understand their solution, it's helping them confidently navigate a decision in increasingly complex environments. And um, that shift from selling to product to creating more clarity is one of the biggest reasons transactional sales are becoming less effective and more relationship driven approaches are becoming more important than ever.

Speaker A: Can't agree more. And really transactional selling, that old pitch, push close, you know, the coffees for closers famous adage just contributes to that indecision. I've experienced that before, back when I was a device rep, way long ago. And especially when a health system or practice leader already feels overwhelmed with everything that you just mentioned. When you add that pressure, it not only just pisses them off, but it makes them just not want to move forward. Especially as we see oftentimes in healthcare that if it ain't broke, don't fix, fix it kind of thing. And so pushing someone for a yes, it just creates too much skepticism, that doubt. I really don't like going into a long term relationship, which I feel as a sales rep I was building that relationship with having almost, you know, not bullied per se, but really kind of put someone into a corner and got them to say yes when they weren't yet sure. I really feel that, you know, a customer just needs to be educated, they need to be allowed that time to build that credibility and trust from you. They need to know what they're getting into and the ROI and you know, what's at risk potentially of not going, you know, with you or anyone else. And so oftentimes what I see really good sales leaders understand is taking that amount of information that the customer has at their fingertips and positioning the customer to be in that driver's seat. Because most of them are researching. They know what your competitors are priced, they know what they're like. They've probably talked to em a lot before and I still believe to this day that the people that win every day for an account or for a sale or whatever you want to refer to it, are the ones that take that time and solve that solution and really lock step with their potential client on how they've solved the solution, what they're going to do, and then once again following through that exceptional customer service. So this next section really covers that whole concept of the partnership. Right? It's not the sales pitch. And this is where Simon Sinek's work becomes so relevant. People don't buy what you do, they buy why you do it. I, uh, had a CEO once in the very first surgical device company they worked for. And he said the best story wins. And that's not a story about, you know, really talking about a lie or fabricating something. It's why do you get up every day? What is your personal tie to the product, service, technology that you have? And in healthcare, where the stakes just are so high that why matters? This day and age, especially more than ever, they want to know that, you know, the pressures that they have on their team. And you've got to articulate how this is going to impact their practice overall. And when they feel understood, when they feel listened to, they feel like they've got an actual partner and they're going to trust you to move forward into, you know, that next step of the relationship.

Speaker B: I would add that it's also operational because going back to the why, and I love Simon, Simon Sinek's work, by the way, is just phenomenal. But if you're going back to the why is being strong, but your integration process and how you service a customer is weak, then that trust, that really critical trust, just ends up collapsing. I've seen organizations invest heavily in their branding, their messaging, their business development, and the onboarding experience is poor, the communication is inconsistent or the implementation is disorganized. All of that goodwill just disappears right away, quickly. I mean, I've seen it and ultimately trust isn't built through a sales conversation or just a signed agreement. It's really this validation through execution. This is where strategy and operations meet. They intersect. You can't build trust externally if you're, uh, disorganized internally. And that just creates chaos downstream, upstream, in all directions. The organization that consistently earns long term partnerships are the ones that align with what they say, with what they actually deliver, which ultimately is the end goal out of all of these engagements.

Speaker A: I love that. And especially too if we go back to that whole point guard approach, in my mind, a Good sales rep, right? They're going out there, they're prospecting, they're meeting with a client, they're understanding their challenges, they're solving for those challenges. And then they are, in part, the entire integration. And so, you know, getting back to the point guard, right, the salesperson, they see the whole court, they see the plays, they get ahead of things. You know, one of the best ways that a sales rep can add value and be more than just that vendor and be part of the operations is touching base with customer service. You know, was it show shipped? If it is a product, you know, touching base with the customer, you know, did it arrive? Do you need help? Can, you know, is there anything that I can do to help set up if there, you know, is a setup or whatnot? And just making sure that if anyone at any point called you and said, hey, where is this? Or what point are we? You have the answers, you know, what's going on, and if there is for some reason a holdup or anything like that, you're already ahead of that game. And really, that whole concept of being the point guard is you aren't just someone that passes off the ball and then just sits there. You're passing off the ball, and then you're backpedaling or you're moving forward or you're rerouting the strategy and decision. And I think that's so critical in this day and age.

Speaker B: And what you're describing, all of that that you just said, you're describing the modern health care salesperson, right? Not a closer, not a picture, not a script reader. It's really a strategic facilitator and partner. Someone who understands the customer's world, meets them, uh, not only where they are in their leadership, but in their overall business. Right. Anticipating their needs, connecting the dots across the organization in this, you know, the true matrix fashion, building that trust through insight and education. And this is exactly what the Challenger sale found. You know, buyers want someone who can reframe their thinking and not necessarily just respond to the needs in a transactional format.

Speaker A: Absolutely. And, you know, as we're on that concept of reframing the thinking, that really gets into another favorite book of mine. And this is more for the early phase company, Right. Like if you're not standard of care or if you're not, you know, in the, you know, majority of offices. Right. And that book is called Crossing the Chasm with Jeffrey Moore. Erica, you know, I love how you phrase this. So can you talk about what that chasm is and how to get through it, yeah, absolutely.

Speaker B: So, you know, what I would say is small companies, especially when they are in the framework of scaling fast, and that's just the reality of where we are. Things are moving quickly, everything is developing quickly. There's new products, new innovation. And so small companies, to stay competitive, they want to scale fast, they want traction, they want market share. Growth isn't necessary for longevity for your investors. Everyone needs to see the momentum and they want it through revenue. But here's the truth. You cannot scale until you have a stronghold. You can't build a stronghold without transactional sales. So you're building. The companies that successfully cross that chasm aren't the ones chasing the most customers, they're the ones learning the most from the customers they already have. And that is so, so critical. Before you can scale, you have to understand what problem you're truly solving for, who you're solving it for, and what outcomes you're consistently delivering. Because if you don't have a repeatable success, scaling just amplifies the problem, right? It's like that whole thing of rinse and repeat, right? But this is rinse and repeat in a way that is driving success. You need the appropriate advocates, you need the proof points, you need the success stories, you need the time to build in the relationship. And frankly, honestly, none of that happens overnight. And that's why this transactional way of doing sales just doesn't work.

Speaker A: And especially for early stage companies, you know, the bigger ones, they may or may not have to follow this as much, right? Because they're already, you know, one of the first names that pop out when people ask, oh, is there a company that has X, Y and Z? But for those smaller companies achieving that growth, you just referred to your first customers. They're not just revenue points, they are reference points for future customers, despite the size of the contract. They are so key because they're the ones that you use as a reference. They're the ones that hopefully are so happy with you, especially post close, post sale, et cetera, that they say, you know what, this is so great, go talk to, you know, my colleague over here or so and so over here. You know, they're the people that are your biggest advocates, your biggest champions. And if you want to cross that chasm which defines whether you're going to make it long term as a company, you have got to make sure that your first X amount of clients are your biggest champions.

Speaker B: So with that said, let's unpack that a little bit more.

Speaker A: Right?

Speaker B: Moving on to the next section, which, what we're defining is the new model that is trust based education driven strategy aligned growth. So if transactional selling is fading, then that's truly what's replacing it. That's what we're seeing. And it comes down to four things. And we've kind of really drilled this in trust, right? Trust is so critical. We know that once that trust is, you know, that relationship or that trust is burned, it's really hard to kind of regain that traction. So kind of nurturing and protecting that trust factor is critical in building that over time. Educating, right, education is going to be a key component. Making sure that those that you're working with are informed. They have the information that's needed to be able to kind of drive that scale and growth. The strategic positioning, the operational excellence, which you know, I could talk about all day. But let's really start with one of my favorite concepts from the trusted advisor is that uh, trust is built through credibility, reliability, intimacy and low self orientation. In other words, people trust you when they believe that you're genuinely invested in helping them succeed. And this is reciprocal, right? Like I think we can speak to this as individuals, as consumers, as contributors, that that's the same type of trust that we want and we also want to impart in the work that we do. And in healthcare specifically that just means showing up consistently. Educating without immediate selling is another component. It's just so important to provide the necessary elements of information and not just going into the sales pitch. To our point, that just doesn't really work anymore. Understanding your customer's world is key. Uh, you know, as I just referenced, like meeting people where they are in their business, right? Not in a way that feels transactional, but actually getting to know their business and you meeting them where they are and then putting their success ahead of your quota. You know, at the end of the day, like your partner, your customer, your client, they're not going to want to feel like they're just part of the agenda, that you're just checking a box. They really to feel that you are a strategic partner and that you're putting their success in front of whatever your agenda is.

Speaker A: And they can feel it, especially this day and age with so much information at their fingertips. You know, let's go back and I'm sure you know, our listeners are going, if you say the word education one more time, I'm going to jump off a ledge. But I think we really need to unpack what we mean by education. And I think Daniel Pink said it best in his to sell is human the best salespeople are teachers. Education has really become one of the most powerful trust building tools. And med tech companies really have this figured out when you help people in general better understand what their challenges are. Because oftentimes you're coming in and these people might be so bogged down with other immediate, um, things that they need to solve for. They don't even know the solution that you're bringing is an actual challenge that they're facing. But when you can highlight that with confidence, give them the ability to take time to make that decision, you are truly an educative partner. And then I love what you talked about with strategic positioning. You know, that challenger sale book that you referenced really taught us buyers they just don't need a ton of information, right. When you come and you just, I think they call it like the verbal spewage, right? All over everyone where you tell them everything about your product or service and why it's so great and everything that you have. And by the end they've hardly said anything. You walk away, you high five yourself in the parking lot and that person never returned your calls or your emails. They want insight. Spend the majority of your first meeting, whether it's a phone call or an in person meeting, Talking about maybe 10% of the time, ask a ton of questions, get to know them, get to know their business. Then the second meeting really is much more of the informative. Hey, I've heard what you said. Here are some specific things that our portfolio of services or products or whatever it may be, I think we could solve for these things. Can I go into more detail on them? That really spins a whole night. When you walk away as a potential customer from a sales call or sales meeting and you've talked more than anyone in that call, you start thinking about that person that was on the other line or on the other side of the desk a lot differently. And, and that's really where that value creation happens. And Erica, if you can, you know, go into really that fourth pillar, which is your wheelhouse of operational excellence, right. You already talked about, okay, you get the sale, you have to make sure that everything along the adoption, you know, into that new product, service technology goes well. And we call that really the post sale or post close. And I think when you look at operational excellence, it's really back to that good old sports attitude of offense sells tickets, but defense wins championships.

Speaker B: Exactly. That's so true. And you know, when we talk about operational excellence, it's interesting because our minds immediately go to efficiency, which makes sense, right? Operational excellence is going to drive efficiency in a business that is an ultimate goal and everything within it, right? Anything that's an input from a process standpoint is going to yield an efficient output. That is what we're building when we're talking about operational excellence. But operational excellence also covers so much more in terms of really having a successful model, right. We have to look at leadership skills, we have to look at communication. Communication is key because when communication is clear, the expectations are aligned, right. And implementation goes smoothly and customers notice there's no bottleneck, right? Because communication is clear. No one is wondering what's going to come down the pipeline. It's just happening at a smooth pace. Strong operations reduce friction and reduce uncertainty. They reinforce trust. And at the end of the day, people aren't just buying a product or service, they're buying confidence that you deliver the outcome as promised. And when strategy, customer experience and execution are all aligned, that's when organizations create lasting partnerships, right? That is when the relationship factor becomes so key because you've delivered on a product that you know, that's exam, you set the expectation and you delivered. So Marnie, if I'm a small to mid sized company competing with some of the larger entities, right, the big companies out there, how does our uh, team compete?

Speaker A: Great call out. And I think this is where, you know, technology sometimes is a big barrier, right? But I think in the small company era, it's a win, right? Because startups are nimble, they're fast, they listen to customers, they can pivot really quickly. These large organization, it's meeting after meeting after meeting. It's so many different departments and business units that have to come together just to make a change, that the client says, this would be really valuable and I need it before moving forward. And so as long as you're a company with investors, because let's be honest, someone has to invest in that, sees the big picture and they're willing to let you do a slow build at first to, you know, make that first sale, acquire that first customer, hear what they have to say during the onboarding integration, make adjustments to the product or service as they go, then that's what's going to make you win. Because you can't outspend the big players, you can't out logo them and you sure as heck are not going to be able to deploy as many resources. But you can build that white glove customer service approach and then your integration and operations project can truly be a partnership to solve for the actual needs. And so I'd say I'd put a small mid sized company up against a mammoth any day, all day, just in terms of the customer service feel. And that's where you really create the lifelong clients and where once again, those first clients sometimes become your biggest advocates and oftentimes your biggest referral lead source.

Speaker B: Let's unpack that a little bit more because you're hitting on some really key points because, uh, the smaller companies, you're right, they really aren't deeply entrenched in having those large systems and processes that create the scale that some of the giants have. And that can get complicated, Right. It can get clunky. Uh, it can tend to come across as less innovative from an operational standpoint. Small companies have an advantage that many don't fully appreciate or probably don't even recognize. One, they can adapt faster. There's less hoops to go through, there's probably less politics, I would say as well, they're able to quickly personalize a little bit more than kind of your larger organization. And with the right leadership and investor understanding, they can spend time building deeper relationships, which is so critical. I know that's a, uh, point where I've often heard that once a company gets to a certain size, you know, how do you maintain that white glove approach personally, Marnie, as you said, right, like that personal touch that they're working directly with you and know that you are going to be executing on what you've committed on. And as you pointed out, large organizations often struggle to make changes quickly. And that's a disadvantage, I would say, on, um, the larger company side, which gives the smaller companies a tremendous advantage. But it's only a superpower if the leadership or the team within that smaller company really knows how to leverage that intentionally. The key is all around building systems that really do allow you to scale and doing that without losing the responsiveness and the relationships that have made you successful in the first place.

Speaker A: Yeah. And you know, to your point, those big companies, you know, once a company goes public, the client and the biggest and most important company is the shareholder. And that's where I personally feel like the customer service can kind of go off the rails a little bit because it's all about quarterly and annual earnings. And you know, if we were to wrap this up into a pretty bow and, you know, give the biggest takeaway, I'd say this podcast is most likely geared more towards the not huge giants. Right. The people still growing, the people who, you know, maybe have not yet crossed that chasm and are still trying to get into, you know, that early majority. But you know, if you're still going the old transactional coffees for closer Glengarry Glen Ross, you know, way, you may get some small wins to start, but it's going to hurt you in the long run. And today's healthcare leader, whether they're a physician, whether they're a practice manager, whether they're, you know, in the OR or the labs or the pharmacy, you know, they've got way too much information, they've got way too many options and they're looking for a partner. I think, you know, I saw when I was a device rep and I got out of the device game, gosh, now it's oh my goodness, it's about been about 12 years since I sold the OR. I looked forward 15, however many years and I saw Pyxis machines instead of sales reps. And so you have to prove that you are an invaluable member to the team if you want to, you know, stay relevant in sales today.

Speaker B: I mean, pretty much. Well said and great summary to such a great discussion. Ultimately, you know, I see this as really the future of healthcare growth, kind of how these concepts are navigated and implemented. And so we're excited to continue kind of exploring what that looks like as things evolve. But ultimately we are, as always, so grateful for our listeners tuning in. And thank you for joining us on Connect to Develop. Until next time, you can find more

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