The first step in a small business selling to the hospital market space is being able to identify the different segments that they will approach. This is one of the essential building blocks for them to craft their method to and match the correct messages to their potential clients. There are five major segments in institutional hospital selling for small businesses to focus on.
The largest in size of the segments is the Integrated Delivery Networks (IDN) which is, at its basic level, a multi-hospital system that can cover a large geographical area. The groups have come together to share resources in an attempt to provide better continuity of care for their patients, but for small business vendors the main item of note is that they have consolidated a lot of their purchasing power.
As a general rule, the larger the group the longer it will take to penetrate these types of accounts. Furthermore, it is critical to understand that even when a small business gets under contract with the IDN, it does not guarantee orders, but rather just simply provides a streamlined vehicle for participating facilities to purchase the businesses products or services.
IDNs are definitely part of the marketing mix of a small business, but absolutely not the only part.
The next level segment is the slightly smaller hospital systems, which is a group of two or more hospitals (sometimes referred to as sister facilities) that are commonly found in the same geographical area. These groups normally have system wide directors that have heavy influence on the choice of vendors. Similar to IDNs, this level generally takes longer to secure a relationship with, but delivers a tremendous amount of value once established as a vendor.
Hospital systems would be one of the foundational pillars of a small companies business develop plan.
Individual hospitals are the next segment in the order of size. This is the number one penetration point for small businesses developing their foray into health care. Individual hospitals have directors that are reachable, large enough to provide small businesses a substantial transaction size with repeatable orders and are the ultimate internal referral to escalate to their related hospital system or even the larger IDN the facility belongs to.
Individual hospitals are the centerpiece of a small businesses plan of attack into health care.
At the next level are the facilities that cover long term care such as nursing homes and assisted living. The long term care segment can provide quicker sales as their transaction sizes are usually smaller. The area of concern in creating an approach to these places is determining the decision maker that authorizes purchases. Some facilities are tied to a hospital and some are not, some are part of a group and some are standalone. This will take investigation, but it is well worth it as sales coming in the door will keep momentum going for a small business while simultaneously pursuing the larger accounts.
Nursing homes and assisted living are the section of a small business plan that generates small deposits in between the larger sales at hospitals.
The final focus of the health care market space is the clinics and surgery centers. Just like long term care facilities, they have the same challenges in locating the purse strings in becoming a vendor, but will yield faster smaller sales.
Clinics and surgery centers also are part of generating cash flow for a small company and smaller jobs to fill a fulfillment schedule or technicians calendar.
There is a sixth segment made up of Group Purchasing Organizations (GPO). They combine many facilities purchasing power, negotiate lower prices from vendors and take a fee from both sides (hospitals and vendors) for this service. Often these are very large and cover the entire country so they look for vendors that have the capacity to handle national accounts.
Small businesses should avoid these GPOs until later stages of their companies growth.
A business development plan for a small business that blends a simultaneous approach to IDNs, hospital systems, long term care, clinics and surgery centers around a main thrust into individual hospitals will have a strong foundation to build a successful business for years to come.
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