For companies in Med Tech, key account management has always been a vital business strategy due to the prominence of GPOs (group purchasing organizations) in the healthcare industry.
In recent years, however, another form of consolidation has taken over the healthcare space — health systems.
A health system is a partnership between community hospitals, specialist clinics, private practices, and larger healthcare facilities.
Health systems are primarily concerned with improving the quality of care and patient outcomes.
The needs and considerations of health systems are more complex than GPOs, and managing these key accounts requires a more sophisticated understanding of the healthcare industry as a whole.
In this article, we will explore how an effective key account management strategy can give medical device manufacturers an edge when competing for the business of health systems.
For even more advice on implementing an effective key account management strategy, check our Key Account Management Playbook.
What is key account management?
Key account management, sometimes called strategic account management, is the process of managing a business’s top accounts in order to grow recurring revenue and reduce churn.
Managing strategic accounts well grants you five key benefits:
- Better knowledge of your client’s business context
- Increased deal sizes and upsells
- Increased customer loyalty
- Better project management
- Better executive access
Key account management gives you insight into what your client is working on, dealing with, or planning.
Using that knowledge, you can identify opportunities to increase the number of projects you work on together or the profitability of existing projects.
You can also manage projects more efficiently, which leads to better outcomes and increased customer loyalty.
Done consistently, all of this leads to more mutually beneficial relationships with your key accounts.
The 3 phases of key account management
Key account management can be broken up into 3 phases:
- Identifying key accounts- This phase is critical for ensuring you are spending your resources wisely and targeting the accounts that offer the most long-term growth potential.
Performing a SWOT analysis of all your accounts (Strengths, Weaknesses, Opportunities, Threats) can help you identify and prioritize the accounts you should be focusing on.
For a more in-depth look at key account identification, check out our article: Identify Your Key Accounts and Unleash the Power of Strategic Account Management
- Analyzing key accounts- Once you have identified the key accounts you want to target, it is time to analyze those accounts.
Start by segmenting your key accounts into categories such as geography, industry, or customer type.
Next, gather as much information as you can about those accounts.
Learn what you can about the market position of the account, its financial performance over the past few years, and industry trends that may affect the account.
Additionally, look for any potential challenges or opportunities that may impact the account.
Lastly, evaluate your relationships within each account to ensure that you are connected with the right people.
For a more in-depth look at key account analysis, check out our article: Analyze Your Key Accounts and Unleash the Power of Strategic Account Management.
- Optimizing key accounts- With a deeper understanding of your key accounts, it’s now time to lay out a plan to grow those accounts and retain them well into the future.
In this phase, you will create an action plan, pitch that plan to the decision-makers, and monitor progress toward your mutual goals.
For a more in-depth look at key account optimization, check out our article: Optimize Your Key Accounts and Unleash the Power of Strategic Account Management.
What is a health system?
A health system is a network of healthcare providers that work together to deliver the best patient care possible.
Health systems consolidate the resources of different hospitals, clinics, physician practices, and other healthcare facilities to offer patients a more robust spectrum of services.
Health systems can be structured in a variety of ways, including:
- Nonprofit organizations
- For-profit corporations
- Government entities
Health systems seek to improve the quality of care and patient outcomes by coordinating the services of their members simply and efficiently.
Key account management considerations for health systems
Here are some considerations to keep in mind when selling to health systems:
- The decision-making process- Health systems usually have a decentralized decision-making process in which purchasing decisions are made on an individual facility or department level.
When pitching to health systems, it’s important to target multiple stakeholders across various facilities and departments.
- Contract negotiations- Health systems negotiate contracts directly with vendors.
This means when selling to health systems, it’s important to be aware of the health system’s specific contracting requirements, as well as any relevant regulations or guidelines.
- Budgets and financing- Health systems often have complex budgeting and financing structures, with funding coming from a variety of sources, including:
- Government programs
- Private insurance
- Philanthropic organizations
When pitching to a health system, you need to be aware of the specific budget constraints and funding sources of the health system and provide specialized solutions that work for all parties involved.
- The benefits- Health systems are responsible for improving patient care and ensuring positive outcomes, with cost savings being only a small part of those considerations.
When selling to health systems, it’s important to focus on the clinical benefits of your product or service and how it can improve patient outcomes.
CRM is the best toolset for key account management
There is no toolset on the market better for key account management than CRM. A modern CRM platform can help you:
- Centralize data- A CRM system provides a centralized database for all customer data, including:
- Account history
- Contacts
- Interactions
- Sales data.
This enables account management teams to access critical customer information from one place, helping them to make informed strategic decisions.
- Segment customers- A CRM system can segment customers based on various criteria, such as revenue, profitability, and buying behavior.
This helps account managers identify and focus on high-value accounts and develop specific strategies to retain and grow those accounts.
- Track engagement- A CRM system can track customer engagement and interaction across multiple touchpoints, such as emails and phone calls.
This information can help account managers understand customer needs, preferences, and pain points, enabling them to tailor their communication and engagement strategy accordingly.
- Collaborate more efficiently- A CRM system can facilitate collaboration between sales, marketing, product development, account management, and customer service teams.
This enables teams to work together to deliver a better customer experience and identify opportunities for cross-selling and upselling.
- Simplify reporting- A CRM system can generate reports and analytics on customer data, providing insights into trends, opportunities, and areas for improvement.
This information can help account managers make informed decisions and develop strategies for long-term account growth.
FreeAgent CRM provides deeper insights and better collaboration for improved account management
FreeAgent CRM is designed for today’s world of work and our robust toolset is ideally suited to supporting the varied work processes of modern businesses. FreeAgent is:
- Easy to use: FreeAgent works like you expect modern apps to work, providing a user experience that feels fresh and familiar. Teams love working in FreeAgent, leading to high adoption and greater ROI.
- User-configurable: FreeAgent can be configured by you to work the way you do. This means you don’t need outside support to add a form field, adjust a CRM automated workflow, or try out a new process.
- Customizable: With FreeAgent, apps, forms, and configurations are all completely customizable, allowing you to capture and connect your data in any way you like.
To see FreeAgent in action, get a demo, and discover for yourself how FreeAgent can help you have workdays full of impact.
