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.
Working with a GPO, a medical device manufacturer can get their products into dozens of clinics or hospitals as part of a single deal, and a few such deals can provide the bulk of a company’s sales in a year.
Understanding the needs of a GPO and maintaining positive connections with its prominent members is important and many Med Tech companies allocate significant resources to managing these key accounts.
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 GPOs.
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 GPO?
GPOs are membership-based organizations that negotiate contracts with vendors on behalf of their members.
GPOs leverage the collective purchasing power of their members to negotiate favorable prices and terms for a wide range of products and services, including:
- Medical devices
- Medical supplies
GPOs seek to help healthcare providers save money and improve operational efficiency by streamlining the purchasing process and facilitating better supply chain management.
Key account management considerations for GPOs
Here are some considerations to keep in mind when selling to GPOs:
- The decision-making process- GPOs typically have a centralized decision-making process, with a small group of individuals responsible for making purchasing decisions on behalf of their member healthcare providers.
When pitching to GPOs, it’s important to understand who the key decision-makers are and how purchasing decisions are made.
- Contract negotiations- GPOs negotiate contracts with vendors on behalf of their members.
This means that when selling to GPOs, it’s important to negotiate with the GPO directly and understand their terms and conditions for contracting.
- Budgets and financing- GPOs primarily focus on cost savings and negotiating favorable pricing for their members.
When pitching to a GPO, you want to demonstrate the value of your product or service in terms of cost savings.
- The benefits- GPOs don’t provide direct patient care and focus primarily on procurement and supply chain management.
When selling to GPOs, it’s important to focus on the features and benefits of your product or service that can improve operational efficiency and reduce costs.
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
- 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 a modern work management platform that provides top-of-field software tools for companies of all sizes and technical proficiency.
- Easy to use- FreeAgent’s modern user interface is quick to learn and easy to use, encouraging teams to work within the platform, driving up adoption and aligning your work processes.
- User-configurable- With FreeAgent, the power is in your hands. You can customize and personalize FreeAgent to fit the specific needs of your business and teams without external support.
Plus FreeAgent offers:
- Robust integration- FreeAgent’s flexible toolset and extensive integration library supports teams and businesses of all types and structures.
- Simple and transparent pricing- With FreeAgent there is no guessing about cost or value.
- No user minimums
- No hidden fees
- All essential tools and features are available with every package
With FreeAgent, it’s really that simple.
To see FreeAgent in action, get a demo, and discover for yourself how we are leading the way to a better workday.