Selling on Value, Not Price
Business Issue: A leading pharmaceutical company’s leadership had grown concerned. Less expensive alternate therapies were beginning to erode market share for drugs that accounted for a large portion of the company’s sales. The company’s customers - pharmacy directors for HMOs and hospitals, the purchasing agents for drug store chains - were coming under ever increasing pressure to contain rapidly rising drug costs. Managed care policies were changing the marketplace, and the company needed to find new ways to connect with their customers.
Company leaders had to find a way to change customers’ view of the value associated with the company’s products. In order for the company to continue to succeed in this new environment, customers needed to recognize the total value of its products and services, not just unit price. Senior management determined that sales account representatives would need a new approach to their negotiations.
Process: Beginning with a series of diagnostic interviews, Accordence consultants explored the dynamics of the pharmaceutical marketplace. Different divisions of the company’s account force dealt with different customer needs – sales to government agencies, for example, needed to be handled differently from those to managed care organizations. By developing a clear understanding of these dynamics, Accordence consultants were able to focus closely upon areas of the highest value to the company.
Working closely with account representatives, Accordence consultants designed a client-specific program of instruction in negotiation methodologies. Training systems and tools were carefully tailored to match the needs of account representatives, including specific case studies and simulations that were based upon actual negotiations conducted by employees. Special care was also taken to ensure that the new negotiation methodology was integrated with other methodologies used by the sales and marketing organization -- allowing Accordence consultants to focus directly upon building skills that would be of greatest benefit to account representatives.
Accordence consultants then worked with company leaders to update their internal account management systems. The tools and methodologies developed by Accordence were coupled directly with both the procedural and automated systems developed by the company to handle its accounts.
Results: Partnering with Accordence consultants helped the pharmaceutical company to establish a new paradigm for its negotiations with customers. Faced with a volatile marketplace, account representatives adopted a new approach, using collaborative methodologies to understand the reasons for their customers’ buying decisions. The training provided by Accordence consultants, in conjunction with the company’s improved account management tools, has given account representatives a way to work with its clients for mutual gain and a strong basis for continued success.