The medical device market in the US is expected to grow to $208 billion by 2023 (Source: Select USA). The global pharmaceutical market is estimated to be around $1.27 trillion as of end-of-year 2020 (Source: Statista).
Because of how lucrative the medical device and pharmaceutical industries are, it should be no surprise that competition in these fields is fierce. Medical sales teams need every advantage they can get to stay ahead in such competitive markets. Leveraging relational sales techniques can provide a crucial advantage.
How Building Relationships Is Different from Simply Making Contact
In medical sales, simply getting in touch with the right decision-maker in a company in any part of the medical industry is no easy feat. From C-level execs at big pharma companies to hospital supply chain managers, IT managers, and even individual practicing physicians, decision-makers are often guarded by a small legion of gatekeepers.
However, just contacting a prospect isn’t enough. It’s important to create a connection and foster a long-term relationship that keeps the prospect coming back for more even after the initial sale is made. This may involve taking extra steps to:
Learn Specifics about the Prospect and Their Organization. Understanding the needs and wants of the prospect, as well as where they go to get information, can be crucial for identifying ways to build a positive relationship and promote your brand as a trusted resource.
Act as a Resource for Situations Outside of Selling. If you asked someone a question about your business, and all they did was promote some product or service their company had, would you trust their advice? Probably not. Providing value outside of simply selling products and services by being a trusted advisor and even pointing can be key for building trust—and thus a healthy long-term sales relationship.
Personalize the Customer’s Experience. According to data from Salesforce, the top 20% of high-performing sales teams “are 2.8 times more likely than underperforming teams to say their sales organizations have become much more focused on personalizing customer interactions.” Personalized sales experiences take more time to craft, but can help to improve results.
This relational sales approach is different from simply making contact in that it requires a lot more work. However, the extra effort can pay significant dividends for any medical sales team.
3 Benefits of Relational Sales for Companies in the Medical Industry
How does building a relationship with a prospect benefit medical sales teams? There are many ways that relational sales can benefit sales reps in the medical industry, such as:
1. Improving Customer Retention and Average Spend
Successful sales teams do more than just get the client in the door—they help ensure that a client keeps coming back for more products and/or services over time. This can be crucial to driving long-term success because existing customers are far more likely to try new products or spend more than first-time customers.
According to data cited by Crazy Egg, “the probability of selling to an existing customer is 60-70%, while the probability of selling to a new prospect is 5-20%.” They also “spend 31% more” according to the Crazy Egg article.
So, building relationships with clients to improve retention can have a major impact on sales success. How big? Say you have two sales reps. One is reaching out to 100 existing customers and the other is reaching out to 100 new contacts who haven’t closed a deal before. At $5,000 base value, how much would each rep generate in sales based on the information above?
The first rep closes 65 new deals for $6,550 each by upselling to each prospect—generating roughly $425,750 in deals. Meanwhile, the second rep only closes 20 deals for $5,000 each since he couldn’t close as many upsells—generating roughly $100,000. While the second rep’s results are still respectable, they’re a fraction of what the rep with the established relationships was able to close.
2. Stable Long-Term Profits
One of the benefits of having a stable long-term relationship with a customer is that you don’t have to keep endlessly struggling to fill the sales funnel to keep the profits coming. Instead of having to desperately cold call potential sales leads all day, you can rely on a few reliable contacts to meet the majority of sales goals and keep your organization profitable.
Compare this with having to constantly prospect new sales leads and not knowing if enough deals will close each quarter for the company to avoid losing money.
Inconsistent earnings can make it harder to attract investors. So, having stable relationships that generate reliable sales can prove to be incredibly important for an organization’s long-term success.
3. Prospects Volunteering More Information
Knowing a prospect’s pain points—those issues that are causing them difficulty that your products and services can help with—is key for driving sales. However, there is only so much that research about a prospect can tell a sales rep.
One of the advantages of fostering a relationship with prospects is that it allows sales reps to get those prospects talking about their daily challenges more easily. This, in turn, can help the rep glean vital insights into the prospect’s pain points—which they can use to upsell specific products and services later on.
Naturally, prospects may have some problems that your company’s products and services don’t directly address. However, being able to provide support and recommendations for dealing with them helps to build trust and respect with prospects and customers so they’re more likely to return for future business.
When used the right way, relational sales techniques can help companies in the medical industry build bonds of trust that make meeting sales goals much easier (and more consistent). Finding ways to build relationships with prospects and existing clients is a great way to improve customer retention, increase sales, and stay top-of-mind for your sales accounts.
