By Lee Lewis
I advise large employers to help them transform their healthcare plans by making them better, simpler, and more affordable, and in doing so I invariably work with many vendors attempting to solve important problems. These vendors sell their products to the employers with whom I work. Most of them do not ultimately get hired, and I am often brought in to help them refine their message and improve their solution to make it work for my employer members. A common question I am regularly asked after the RFP, pitch, and presentation is, “We definitely made the sale, but the employer didn’t buy. Why won’t HR buy my solution?”
The answer to the preceding question is usually some variation of the advice that follows. This article is an attempt for me to (selfishly) answer this question thoroughly so I can avoid having to repeat myself many times into the future and can simply refer people here with a copy of the link, and also help vendors improve their sales capability to make better, more impactful presentations.
The first mistake made by vendors looking to sell to employer benefits teams is the assumption that they just need to show how their product efficiently solves a problem at a fair price. This isn’t a bad assumption—in most industries, this is sufficient: a hamburger solves my hunger problem, an airline ticket solves my distance problem, a haircut alleviates my ugly problem, etc.
Not so in employer sponsored healthcare purchasing: selling the solution to a problem is a necessary component—but it isn’t sufficient. An innovative new company must actually make three sequential sales if it is likely to be hired:
First, You Must Sell Your Problem
One vendor I was helping out created a revolutionary financial wellness solution. I loved the product; it was better than anything else in the marketplace and was poised to win their segment. Yet, sales weren’t going as planned. On one occasion they related to me a failed sales attempt: the pitch went great, the employer acknowledged it had a problem, the vendor showed they could solve it better than anyone else, at a very high ROI, and with a great customer experience. The employer loved the pitch and the vendor was sure a sale would be made, yet the employer didn’t call back and seemed to have lost all interest.
What went wrong? A few months later the vendor team learned the employer had loved the product, but didn’t have time to implement it because they decided to implement a cancer solution that year and only had time and resources to implement one major program. My vendor friends had failed to make the first major sale: selling the problem, or specifically, establishing problem primacy.
You may succeed in showing a winning product, but if the problem you solve isn’t big enough, you may not get hired.
Problem primacy is the outcome of a successful sale where a vendor made the case that the employer has a problem and that this specific problem is more important right now than any other problems that might be competing for the employer’s attention. In the example above, the financial wellness solution wasn’t in competition with other financial wellness solutions. It wasn’t in competition with the cancer solution either. It was competing to be the only major program for that entire year against every other possible program that might be implemented. The vendor lost because their problem lost: the problem of financial toxicity was smaller than the problem of cancer (assuming solutions exist to address both). Comparing it to a consumer decision, the hamburger lost to a haircut (in a world where you only get to solve one problem per period).
Employers operate under significant restraints of time, labor, and budget. Most employers plan for months for a new initiative and only undertake a couple each year. Conversely, healthcare is arguably the biggest problem in the country, and the array of addressable opportunities and solvable challenges is staggeringly high relative to the solution implement rate, so opportunities fiercely compete for priority in any given implementation cycle.
If the problem you solve is never going to be big enough to earn primacy, expand your solution or accelerate the ease of deployment. Small problems easily solved can still earn primacy ahead of large problems requiring a heavy lift.
After regrouping with the team with this new information, we did a significant dive into the problem of financial toxicity itself, just seeking to understand and quantify the root causes and symptoms. It turns out that financial stress erodes productivity, derails retirement, deteriorates health and spikes medical claims, altogether costing companies billions. The most dramatic finding: the Chief Clinical Officer at a leading national cancer center even said, “The most dangerous part of cancer is financial toxicity.” In an ironic twist, it turned out financial wellness could potentially solve for the worst part of cancer anyways.
Second, You Must Sell Why Current Solutions Are Insufficient
Most problems worth solving will have a bunch of solutions already in the market. Any vendor attempting a sale who has established that a large, addressable problem exists must pivot to explaining why the current array of solutions don’t work. Perform a root-cause analysis on why incumbent business models are ineffective or too inefficient to solve the problem, or in the rare case, why the problem has been missed completely.
This concept seems obvious but is often ignored by companies who simply assume that the existence of the problem is proof enough that solutions don’t work, or in some cases, it is widely acknowledged that the incumbent vendors are awful. Just because nobody likes the incumbent vendors doesn’t mean that presenting a superior alternative wins the day by default. Furthermore, in the case of verticals where many companies are competing (e.g. diabetes vendors), vendors will fail to differentiate themselves, instead establishing problem primacy and jumping straight to how they solve the problem, causing failure.
Vendors should be aware of both established models for addressing their problem as well as other innovators, and care should be made to address the efforts and shortcomings of both.
Incumbent products have an inherent advantage in that they are established, ‘safe,’ generally easy to purchase and possess inertia. Even deeply deficient products hold on for years after they’ve been disproven because replacing them is so costly. Vendor salespeople often take for granted the obvious deficiencies in the status quo vendors and are surprised when their sales attempts fail. Remember that few complaints arise from a dead program that isn’t doing anything or bothering anyone if it can simply lie dormant in a hidden corner of the budget, whereas a new program carries risk, work, possible disruption, complaints or trouble. The selling vendor must carefully illustrate all the problems with the current business models and quantify them for the buyer to compel the need to act.
Don’t assume that because the incumbent is expensive, ineffective and/or widely disliked that the benefits team is eager to replace it.
New competitor products must not be ignored either. Some vendors, particularly those in an innovative space, assume their buyers have not seen or heard of the vendor’s competition and sell exclusively against a broken status quo. This is akin to a straw man fallacy, where you characterize your competition weakly to easily win a point.
To be effective, you must know who your new competition is, as well as the incumbents, and study their approach to understand how and where you are different and better. Remember that you can be better and more successful in many ways: lower cost, higher quality, more customization, greater transparency, superior guarantees, etc. One TPA I worked with sold a lot of business by differentiating their ease of implementation. The idea that decade-long purchase decisions were made based on how easy it was on the benefits team during the first 90 days of the engagement seems like an unlikely concept—unless you know how hard it is to switch and that your services are perceived as a commodity, then it becomes a massive differentiator.
Once you know who your competition is, and understand how and where your product is superior, do not fall into the common trap of maligning the competition! Nobody likes negative energy, and if you talk badly of your competition, at best it makes you look petty and at worst you look small and afraid. Instead, comment on business models and approaches, not naming competitors in any negative light. If you do comment on your competition, praise them and their efforts to solve a common problem and state what they do well in a manner that would be as or more persuasive than how they would describe themselves. Characterizing your opponent in the best possible light is known as a Steel Man (vs Straw Man), and it shows class and empathy, while allowing you to discuss your positive attributes in direct comparison without being disingenuous.
Once the root-cause analysis of the deficiencies in all solution models, old and new, has been completed and ‘sold’ in a simple, clear way, your actual solution may be presented effectively.
Third, You Must Sell Your Solution Well
After the problem itself and the deficiencies in the solution alternatives have been established, the final case to be made is for the solution itself resolving the root causes of the problem in a way that doesn’t repeat incumbent mistakes. It seems simple, but many sales attempts set up the deficiencies in the status quo without discussing how their solution corrects for them. Address every area you brought up during the root cause analysis and show how you resolve them. What follows are the attributes of well-presented solutions.
Successful solutions address the member experience. You should tell your audience both the best-case and worst-case employee experience scenario. Tell how you’ve thought about the use cases and how you would solve for any issues that might arise. Show empathy; if you don’t care enough about the employees of the buyer to show how your program makes their lives better, then why should the buyer care about your solution? Explain user scenarios and demo your technology, put the buyer in the shoes of the patient and illustrate how easy it is to use your program. Show them a consumer grade experience.
If you don’t care about the employee enough to go deep into her experience, the HR manager will not care about your product.
Successful solutions address the financials and make it easy to determine ROI. The amount paid and saved should be apparent and the reporting should be honest and logical. Resolve conflicts of interest; don’t pay yourself with a model that is mathematically misaligned and use an earnest voiceover to reassure the buyer you will act against your financial interest for their good. Specifics on what makes a compelling financial offering will be covered later.
Successful solutions are simple and have an easy-to-follow cause-effect story. They should easily deploy into the existing vendor ecosystem without expecting employers to redefine their entire process around your model. Successful solutions are de-risked to protect the buyer, not the opposite, and have contracts that are intentionally customer friendly.
Every new vendor swims in a sea of rejection and disappointment, punctuated by islands of bliss as sales are made and opportunities are uncovered. When a great sales pitch results in nothing, it’s easy to get discouraged, and the question “Why won’t HR buy my solution?” is common. Performing a three-sale analysis on your value proposition can help to understand where you are failing your desired customer, and how even a flawless sale in one category is insufficient if you haven’t made a convincing case in the other two.
Lee Lewis is the Chief Strategy Officer & General Manager of Medical Solutions at the Health Transformation Alliance and an Advisory Board Member at Validation Institute. Lewis is a Rhodes Scholar Nominee and graduated Magna cum Laude with University Honors from Brigham Young University. He has worked for years to bring large employers sophisticated health plan audits and direct purchase specialty drug procurement. In April 2019, Lewis received the Health Value Award for Outstanding Benefits Advisor Award for Jumbo and Large Groups.