A panelist at an event I attended recently related a story about a technology company offering a new product that it had demonstrated could save hospitals hundreds of thousands of dollars a year and improve patient care.
Early on, the sales manager at the company noticed that all of the sales closed were at hospitals that were losing money. Seeing where the real opportunities were, the manager threatened to fire any sales rep that called on profitable hospitals.
Why? Because the boss realized that a profitable hospital could toy with a proposal for months, only to kill the idea. If things were going pretty well, the administrator had little incentive to take a risk on a new idea, even if it held the promise of saving money. The executive at a money-losing hospital, on the other hand, needed fast economic relief and was more likely to take a risk.
The sales manager’s point is well-taken, particularly in a sluggish business environment when lots of businesses are looking for ways to cut costs and gain an edge on their competitors.
When I worked in the food industry in the late 1970s, it became clear that customers were looking for value pricing to combat the effects of a collapsing local economy, lots of unemployment, rising fuel prices and double-digit interest rates. Our response at the time was to be the first in town to introduce generic products, low-priced groceries that gave customers an alternative to higher-priced brand name items.
The downside of selling generics was that the low prices and thin profit margins meant that the more we sold, the tougher it became to retain profitability. The upside, however, was much more critical to our long-term survival as a business.
We were able to retain our customers and even attract new ones that would stick with us until times got better and they were ready and able to spend more freely. At some point, generics faded from the scene as demand dropped off. Those same customers, however, stuck with us when better times returned.
So if your prospects seem to be doing well but aren’t buying from you, perhaps you should be looking for someone who is hurting. It might make both of you feel better.
