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Jul
30

Employers don’t buy. People do.

Buying decisions are often “illogical”, if you base the definition of “logic” on doing what appears best for the organization.
Those same decisions are quite logical, if you think about them from the perspective of the people making the decision. Unfortunately, few “sellers” understand that.
I’ve been dwelling on this for several weeks, as I’ve spent more than a few hours speaking with incredibly bright investment analysts about various potential investments in the managed care “space”. The conversations usually follow the same path…
Smart analyst (SA) – We’re trying to understand the value proposition of Company X…
Me – Well, Company X claims they save Y% on this or that type of medical service, which is more than their competitors.
SA – Wow, that’s a lot. How much of the market can they capture?
Me – Probably about xx%.
SA – Why not more?
Me – Well, their program requires the employer to make an investment in IT &/or training &/or change a business process &/or do things a bit differently.
SA – But in order to save all that money, that’s a no-brainer.
Me – You have to think about it in the context of the insurance market, which has been very soft for years, so there’s not a lot of capital available to invest in process or IT, staff to do the work, or hours to train staff who are processing claims.
SA – But in order to save all that money, that’s a no-brainer.
Me – Not necessarily; the person who has to make that decision has other priorities too, namely getting other critical IT projects that deal with compliance issues done, keeping claims moving to resolution, answering queries from her boss about progress on her boss’s boss’ pet project, and budgets are coming up too.
SA – But if Company X does the IT work, won’t that speed things along?
Me – Again, not necessarily; the vendor’s IT staff needs someone at the Customer – on the other end of the phone line – to work thru issues…
SA – So, let me get this straight. Company X can save an employer a gajillion dollars but employers won’t use them because some bureaucrat has other priorities?
Me – Yes, you got that straight.
SA – that makes no sense.
Me – [thought but not said] – not to you it doesn’t; to the “bureaucrat’ it makes all the sense in the world.
So what does this mean for you?
Employers don’t buy, people do. The ‘sale’ isn’t to an amorphous entity, it is to an individual or individuals, who succeed or fail in large part based on their decisions, the impact of those decision on other priorities, and whether their culture allows/accepts/rewards risk.
Don’t think about ‘business objectives’. Think about the person you’re talking to, who they are, what they do, and how you can make them successful while minimizing downside risk.


6 thoughts on “Employers don’t buy. People do.”

  1. I will share this and also suggest that this simple lesson needs to be given in every marketing class – graduate and undergraduate.
    The only thing I would add is the “resistance to change” that I have encountered in every single organization I have had interaction with. The resistance to change is a common personal trait.

  2. The bureaucrat’s seem to always win over innovation and new technology…until some bureaucrat gets props for suggesting the technology.

  3. Quite true. I have been in the health care business for 30+ years. I can’t tell you how often I saw priorities and corporate goals change, simply because there was a change at the top.
    The market did not change and buying patterns did not change. But priorities did.

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Joe Paduda is the principal of Health Strategy Associates

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A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.

 

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