Reference no: EM133312487

Case Presentation of Price or Property

When Janice Thompson started her job as a Prodio salesman, she thought it would be easy. After all, the service he sold saved customers thousands of dollars. "What we do," said Evin Martinez, director of sales, "is verify all the credentials that a doctor or other health professional has when they are hired by a hospital or clinic. It turns out that it can take up to six months to verify all the licenses a doctor must have. We can do that with our proprietary software solution in less than 30 days." She gave him several case studies showing savings of over $100,000 due to income that was being lost, waiting for the doctor's credentials to be verified and another $50,000 on average for eliminating staff used in the verification process. So he started calling the hospitals and asking for the head of human resources. Several times, they passed it and the conversation would be something like this.

"I would like to meet with you to discuss an exciting new service, Prodio, which takes care of the accreditation of your employees. The best part is that it only costs $250 per doctor, saving most hospitals over $150,000! "$250 per doctor? That's crazy! I have no budget for anything like this! No thanks"

So Janice called Evin and said, "I'm not really going anywhere. Can I work with someone successful to observe how they do it? " The following Monday, he found himself in San Diego, meeting with Rich Sample for coffee before making a few sales calls.

Rich recommended waiting to price until the prospectus had offered information about how many doctors he was accrediting and what that cost was, as well as how long it takes him to get information about accreditations. "You can't sell the price until you know what your current costs are," he advised. "This first call is a great example. The hospital's CEO asked me to meet with the director of human resources to get that information, which I did last week.

Today, I will present the costs and benefits and ask for the sale." In the hospital's conference room, Rich and Janice sat on the side of the table facing the CEO, Alex Maxwell, and Dianne Green, the director of human resources. "Alec," Rich said, "based on the information Dianne gave me, you'll reduce the crediting period from an average of 90 days to less than 30. For your more advanced specialties, it will go from six months to less than 45 days.

Dianne was unable to total the lost income she will save by shortening the period, but we were able to determine that she will also be able to eliminate two positions, saving another $138,000 compared to spending just under $60,000 per year." He then handed the contract to the executive director. There was a momentary silence and Janice could hear the ticking of the antique clock on the sideboard. Shirley squirmed, visibly upset. When Alec looked at her, she said, "Alec, I don't want to send two people away. And I have no other position to offer them." Alec responded, "But this is one of those things we'll have to do: financially, it's the right thing to do for the hospital." When Alec turned his attention to signing the contract, Dianne stood up and said, "Well, congratulations Rich. Janice, nice to meet you," and left the room. An awkward pause followed, which was broken when Alec returned the contract to Rich. "Does this contract mean we have to get all our credentials through you?" "No," Rich replied. "It just specifies the cost and our performance guarantees." "OK. Work with Dianne to make the transition. I'm not going to fire anyone, so until we can put them in other positions, you'll have to wait."

Questions

1. Evaluate Rich's approach to presenting the price. Is Rich's approach something Janice should emulate?

2. Presenting the price as the one that catches the eye doesn't seem to work. If Janice emulates Rich's approach. What should you do when you call to commit to having that first meeting?

3. Rich in will have to work very closely with Dianne and her people, and it does not seem that Dianee is happy with the sale. What could Rich have done to avoid this situation? How could it have been different if Dianne had been the initiator instead of Alec?