Growing Market Share Without Cutting Price

Business Issue
A leading women’s health care company approached Accordence when it had trouble growing its share of the market without cutting the price at which it sold its products. This billion dollar firm grew to success a decade ago when it developed unique screening test and related equipment that it sold to human health laboratories. These tests and equipment, which allowed labs to more effectively and efficiently detect disease, gave the firm a solid advantage in the human health market in this disease area.

As another company entered this marketplace, many buyers chose a supplier based on price. The firm, which had a strong belief in the additional value of its product, now was surrounded by a few competitors selling solely on price. Buyers began moving their business away from the firm, oftentimes moving to the new competitor for price reasons and sometimes because they did not want to work with a company  that was “dictating the market”. The company needed to find a way to combat gross margin erosion at a time when they were looking to continue to grow market share.

Process
The firm needed to train a variety of their market-facing organization on strategies to deal with this business issue. Beyond the sales team, which needed to strengthen their everyday negotiations, the company wanted to train its corporate contracts group, field customer service group, legal group, and marketing team to all be on the same page. After researching the human health laboratories market, Accordence was able to devise custom role plays to prepare the company for their future interactions. Accordence looked at real problems the company was dealing with, such as its trouble uncovering the other side’s interests, a lack of realization of their own leverage, and reluctance in developing and implementing sound concession strategies, which up until this point meant caving on price alone. By customizing the Accordence teaching model to deal with these precise problems, the company developed objectives around them and a foundation for future sound decision-making in negotiation scenarios.
 
Result
The company saw immediate monetary success following their experiences with Accordence’s ICON model. This model, which spends time focusing on building objective criteria, came into play before the company’s second two-day learning seminar was even complete. Two members of the sales team received a phone call after day one of their seminar with Accordence, in which a hospital called them to try to quickly close a deal that the sales team had been working on for some time. The company was eager to make this sale, but then was surprised when the hospital tried to take “one more bite of the apple” by asking for a discount at the last moment. The firm used the skills they had gained that day and asked what objective criteria this price change was based on; using their new techniques, the hospital could not justify the new price and agreed to the original price. By not making this concession, the firm saved $110,000 in additional gross margin that they would have lost without their new teachings. In the months since working with this company, Accordence consultants have continued to receive e-mails about successes in which the Accordence model came heavily into play. Today, the Accordence model has been delivered to three other divisions within the company and is the framework by which all sales and contract renegotiations are handled by the company.

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