Reference no: EM132253276

When Bob Starr began his job as a salesperson for Prodio, he thought it would be easy. After all, the service he sold saved clients thousands of dollars. “What we do,” said Nancy Gordon, chief sales officer, “is verify all of the credentials a doctor or other health care professional has when hired by a hospital or clinic. As it turns out, it can take up to six months to verify all of the licenses a doctor has to carry. We can do it with our proprietary software solution in under 30 days.” She gave him several case studies showing savings of more than $100,000 because of revenue that was being lost waiting for the physician’s credentials to be verified and another $50,000 on average for eliminating staff used in the verification process. So he began calling hospitals and asking for the head of human resources. Several times, he was put through and the conversation would go something like this. “I’d like to meet with you to discuss an exciting new service, Prodio, which handles credentialing. The best thing is it’s only $250 per doctor, saving most hospitals well over $150,000!” “$250 per doctor? That’s crazy! I’ve got no budget for anything like this! No thanks!” So Bob called Nancy and said, “I’m not really getting anywhere. Can I work with someone to see how they are successful?” 315 The following Monday, he found himself in San Diego, meeting Carmen Lopez for coffee before going out on a few sales calls. Carmen recommended waiting to give the price until the prospect had offered information regarding the number of doctors it was credentialing and what that cost was, as well as how long it took. “You can’t sell price until they know what their current costs are,” she advised. “This first call is a great example. The hospital CEO asked me to meet with the director of HR to get that information, which I did last week. Today, I’ll present the costs and benefits and ask for the sale.” In the hospital’s conference room, Carmen and Bob sat on one side of the table facing the CEO, John Blankenship, and Shirley Price the HR director. “John,” said Carmen, “based on the information Shirley gave me, you’ll reduce the credentialing period from an average of 90 days to under 30. For your more advanced specialties, it will go from six months to under 45 days. Shirley couldn’t total the lost revenue you’ll save by shortening the period, but we were able to determine that you’ll also be able to eliminate two positions, saving another $138,000 versus spending just under $60,000 per year.” She then handed the contract to the CEO. There was a momentary silence and Bob could hear the antique clock ticking away on the credenza. Shirley squirmed, visibly upset. When John looked at her, she said, “John, I don’t want to fire two people. And I don’t have other things for them to do.” John replied, “But this is one of those things we’re going to have to do—financially, it’s the right thing for the hospital.” As John turned his attention to signing the contract, Shirley stood and said, “Well, congratulations Carmen. Bob, nice to meet you,” and she left the room. An awkward pause ensued, broken when John handed the contract back to Carmen. “Does this contract mean we have to do all of our credentialing through you?” “No,” replied Carmen. “It just specifies the cost and our performance guarantees.” “OK. You work with Shirley to transition over. I’m not going to fire anyone, so until we can place them in other positions, you’ll have to wait.”

Questions

1. Assess Carmen’s approach to presenting price. Is her approach something Bob should emulate?

2. Presenting price as the attention getter doesn’t seem to work. If Bob does emulate Carmen’s approach, what should he do when he calls to gain commitment to have that first meeting?

3. Carmen will need to work very closely with Shirley and her people, and it doesn’t appear that Shirley is happy about the sale. What could Carmen have done to avoid this situation? How might this have gone differently if Shirley had been the initiator instead of John?