While the enterprise sales process is challenging regardless of industry, these challenges are all the more difficult when it comes to healthcare, which is why we’re outlining a few ideas for startups selling to hospitals.
Firstly, why is healthcare particularly challenging to sell into? Perhaps most importantly, the stakes are higher in healthcare. The end impact ultimately will be on the patient and the quality of care that is provided, and thus startups must pass a higher bar before achieving buy-in from a hospital. More specifically, that bar must somehow address the quadruple aim within healthcare of improving health, improving quality, reducing costs, and improving the clinician experience. A second challenge is the multiple decision maker structure as health systems typically have more decision makers versus the average enterprise sale. Hospitals have a variety of different stakeholders, that may have different goals as well, which adds additional complexity to the sales process. Lastly, health systems are incredibly complex organizations and therefore accordingly wary about the deployment of new software from both a technological aspect as well as an employee training perspective.
Given the added complications associated with healthcare, we have several ideas for startups selling to hospitals:
1. Pursue Multiple Tracks With Different Stakeholders And Have A Clear Value Proposition. One of the first steps to any process selling into a health system should be to learn about the different decision makers in the organization and their various goals. After doing so, ensure that your own internal team has the relevant experience to build relationships with the assorted stakeholders. This includes accounting for some level of healthcare expertise, as well as ensuring you have sellers that understand the regulatory compliance components and also have the technical expertise to speak to end users. Lastly, startups should also considering beginning parallel process with the legal team to preempt any contract review issues. Along with pursuing multiple tracks, however, it is always important to find a champion within the enterprise that can act as a leader for the sales process and has the support of the executive team. Finally, after having identified the key individuals on the health systems side, the second piece will be to have a clear value proposition for each contingency. Are you enabling the team to increase revenue or decrease cost? What is the expected ROI, and what metrics will be tracked? On the flip side, there are several questions startups should ask their champion upfront to help map the process. This includes questions such as, how have you gone about purchasing systems like this before? Who has been involved in the process and how we can help bridge communication to other parties? Having answers to both sets of questions and building the right story around the unique value proposition will help expedite what the long sales process.
2. Master Your Pilot Strategy & Timing. Given the higher stakes in healthcare, most health systems will begin software deployment through a pilot program. In the spectrum of ideas for startups selling to hospitals, taking advantage of the opportunity to demonstrate a track record is very important. New software companies must be prepared for the pilot program, with a clear strategy for conveying the product’s value proposition. Furthermore, it is helpful to think about the timing of the pilot in advance. Most health systems have tight budgets and specific fiscal year planning timelines. Therefore, the probability of the pilot converting into a paid contract might dramatically increase if it is well timed in advance of the next fiscal cycle. Many of these systems also have budget they have to use at the end of the year, or they lose that budget during next year’s budgetary planning, so keep this in mind!
3. Make Implementation Easy. The last set of ideas for startups selling to hospitals is centered around implementation and client retention. Especially on the software side, companies should consider that a health organization might see the value in the product but is wary of integration friction. Health systems have a myriad of existing systems and processes in place, and the ability for a new technology to integrate into legacy processes is of utmost importance. Therefore, think about scale early and develop a focused strategy to achieve broader system-wide adoption. Furthermore, consider thinking about customization early, as out-of-the-box solutions rarely work in healthcare. Whether its a difference in state regulations or general system preferences, each healthcare organization is different and understanding these nuances upfront will reduce any surprises during the implementation process.
If you liked “Ideas For Startups Selling To Hospitals” and want to read more content from the Bowery Capital Team, check out other relevant posts from the Bowery Capital Blog. Special thanks to Meha Patel for her contribution and work on this post.
Below we have compiled a list of metrics that could be relevant for most B2B marketplaces and hope that it serves as a framework for tracking KPIs for success.