My first step in implementing Sales Team Performance Management is testing the Value Proposition. I mean REALLY testing the Value Proposition.
It’s all too easy for us to get excited by some new idea, especially if its a game changer. New technology enables new markets and that means first mover advantage and no competition. All we have to do is get the message out there, then sit back and watch the money roll in. Unfortunately we come back to earth with a hard landing when the launch doesn’t quite work out that way.
Making sure we aren’t kidding ourselves about who is going to buy our new toy, and why, is fundamental to cost effective sales team operation. Here’s an example of really testing a new idea.
Case Study
One of our businesses commercialises EU funded research in eHealth. Our project is developing a new device which will diagnose a particular disease. The major claim for the (to be developed) technology is diagnosis much earlier in the progression than current practice. The incidence of this disease is growing rapidly with the ageing population. The medical device industry is also growing like crazy and outrageously profitable. We have access to the project results. If we can find the right combination of value proposition and delivery partners we’ll make a lot of money, and a big reputation.
So what’s the right value proposition? Early and more accurate diagnosis sounds like it might ring lots of bells. Let’s take it for a test drive.
What is the Benefit
Specialists in this disease are hard to find, even harder to get seen by. And they get the diagnosis wrong as much as 40% of the time. This technology will make more accurate diagnosis possible by general clinical staff at lower cost.
Who Benefits
Patients, clinicians and health care providers all benefit from screening patients prior to specialist consultation, and help with more accurate diagnosis. Patients find out about the condition earlier. Specialists do a better job, with less effort. Health care providers do a better job at lower cost and preserve limited resources for other patients.
Where’s the Value
Who makes, or saves, money sufficient to provide ROI on the cost of the equipment? On the face of it the health care provider should be saving money, but does that make the providers procurement office the customer? if so how much will s/he pay? The health care provider only makes or saves money when the clinicians change their standard practice, reducing the cost per patient. Thats something else we need to test.
Who is the Customer
Patients benefit but aren’t going to buy the equipment. Specialists benefit but don’t have purchase authority. Health care provider does have the procurement budget but only benefits if the specialists do things differently. So who is the customer?
On this final question we run into the first of several major problems.
Specialist clinicians will provide a more accurate diagnosis for patients, but its unlikely they’ll make any cost savings by changing the way they do stuff. The limitation is in the available treatments. The proven drug for this disease works only for a short period of time, after which it makes the patients problems worse. As a result the clinician delays diagnosis and prescription until the balance of quality of life and life expectancy is in equilibrium. There is no cost saving (that we have yet found) enabled by early diagnosis.
Conclusion
If we’re going to make a success of this particular technology we’ll need a new value proposition to build our strategy on. Early diagnosis may sound exciting, but won’t change anything when the specialists don’t want to do it, for very good reasons.
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