An Electronic Edge

Edition: October 2009 - Vol 17 Number 10
Article#: 3283
Author: Laura Thill

Dave Campbell never meant to get into sales. With a college degree in aerospace engineering and a Ph.D. in fluid physics, he began his career working as a research scientist with a private company on contract with the United States Atomic Energy Commission. However, when the department was dissolved in the early 1970s, Campbell pursued an MBA and later landed a job in the medical device industry with a biomedical company in New York.

“I had done some research in blood flow, and this company offered a blood flow product,” Campbell recalls. He believed he would oversee the product line. “Little did I know, this would be a sales job managing independent distributors,” he says. The position turned out to be less than ideal. “After a few years with the company, I thought, ‘This is nuts.’ I was managing guys who made more money than me!” He left to take a position with a small anesthesia supply company.

“It was a small company – just the owner and myself,” says Campbell. Within two years after he joined it, however, the company ran into financial difficulties. “I never even saw my last paycheck,” he says. “But, I saw this coming, and I was prepared to leave.” Indeed, he had been preparing a business plan to launch his own company. “I was fired on a Friday and ran into my old boss the following Wednesday,” he recalls. “He was very surprised to learn I already had new business cards!”

Campbell was eager to begin his new venture into specialty distribution, with three or four anesthesia-related product lines. In 1980, Vital/Med Systems (Centennial, Colo.) opened its doors.

Meeting the challenge

In its startup years, Vital/Med was a relatively small business, and Campbell handled all of the company’s sales. Its primary market was – and continues to be – niche products designed mainly for hospitals. “I was working out of my home and delivering products out of my car,” says Campbell. “We [started out with] a great product line, but that was back in the day when products sold fast and it wasn’t unusual to leave a hospital with two or three purchase orders in hand.”

Originally, Vital/Med serviced customers in Colorado, New Mexico, Utah and Wyoming. Eventually, its territory extended to Arizona, Montana, Idaho and Las Vegas, Nev. Covering the vast expanse of the Rocky Mountain states presented a challenge, says Campbell. “Hospitals are few and far between, so it can be a lot of effort for a small return,” he points out. And, travel expenses are so great today, it can be difficult to recover that cost, he adds. But, through some creative steps, he has met this challenge.

His solution was electronic marketing. “Five or six years ago, we created a respectable Web presence,” says Campbell. Being a niche distributor that specializes in high-tech products, he never expected to do much online selling. Still, he recognized the Internet not only as a means of communicating with current customers, but a tool for reaching prospective ones as well. “When people visit our Web site, they can fill out a request form for more product information,” he says. “Many of these prospects have been well outside of our selling territory. So, I thought, if we could get the e-mail addresses for the people we call on, we can alert them to new technologies coming to the market in their clinical specialty.

“When we meet with physicians, we will tell them that we’re collecting a database of customers,” continues Campbell. “We say, ‘We want to be able to send you updates of new products when they come out. Ninety-nine percent of the time, physicians are happy to give out their e-mail address,” he says. It’s the reps who often forget to ask for it, he adds. Although he always offers physicians the chance to “opt out,” only two dozen or fewer have done so. (It doesn’t hurt that Campbell can convey his experience as both a researcher with a Ph.D. and a CEO to prospective customers.) Today, the database includes about 4,000 physicians.

Organized by clinical specialty and geographic region, the database enables the company to target specific physician specialties. For every mass e-mailing he sends out, he may get only four or five responses, but that’s no problem as far as he is concerned. “These are four or five doctors I didn’t have before,” he points out. “Plus, they tend to be the decision makers. In fact, at press time, Campbell was scheduled to meet with an Arizona-based cardiac surgeon who had responded to one of his e-mails. “This doctor is one of the biggest names in Arizona,” he says.

“It’s almost impossible to make cold calls to hospitals today,” he continues. “And, leaving voice mail doesn’t really [generate] responses. With e-mail, you may not get a lot of responses, but the ones you do get [really count].” If anything, Campbell wishes he had leveraged the Internet much sooner.

Then and now

Without the Internet, Campbell says it would be close to impossible to reach physicians in hospitals today. “Back in the 1980s, it was the physicians who made the decisions,” he says. “If a doctor liked my product, [he or she] would have [his or her] nurse fill out a requisition and I would leave with a purchase order.” Today, sales reps are lucky to meet face-to-face with a physician, he adds. “Usually, we must meet with the materials manager, who must work through many committees, and the process can take months,” he says. Not to mention that many providers are shying away from new technology in the economic downturn, he notes.

In fact, one of Campbell’s greatest challenges is to convince his customers that new technology can result in better, faster and, in the long run, less expensive ways of doing things. “I am looking to change the way procedures are done through new technology,” he says, but that’s not easy considering the drawn-out process whereby administrators and clinicians discuss what technology is, and is not, effective.

Starting one’s own distributorship would be difficult today, he continues. “But, regardless, if a distributor is going to be successful, [he or she] must live by the right guidelines.” Most important, this means getting buy-in from significant physicians who are decision makers, he says. “Distributors must pay close attention to what their [physician customers] have to say,” he adds.

It also helps to join an association of similar-minded companies, Campbell continues. “I joined the Independent Medical Distributor Association (IMDA) in 1990, 10 years after I started Vital/Med Systems, which enabled me to build my company’s reputation with manufacturers,” he says. “Start ups really don’t have that relationship.” Campbell received IMDA’s highest award, the Ernie Douglass Award, in June 2004.

A different approach

Many independent specialty sales distributors are relatively small players, notes Campbell. They are the “B-list” vendors, and they typically aren’t on GPO contracts. As a business owner, Campbell knows all too well what this is like. He spent many years watching his reps become frustrated with countless rejections. Campbell was confident from his company’s inception that his products could improve patient outcomes and reduce costs. The problem was, how could he and his sales team show these customers that Vital/Med Systems provided this technology?

At the insistence of his spouse and business partner Kathy French, Vital/Med decided to try a different approach. “She said, ‘You need to have conversations with people at the highest levels,’” recalls Campbell. His feeling was, “Been there, done that. Lots of luck.” But she made the calls and, soon after, the senior product decision-maker for the local HCA system agreed to stop by Vital/Med’s office for a half hour on her way to work “to see firsthand what our company was about,” he says.

Campbell took the cue, and prepared a brochure on Vital/Med Systems as well as a PowerPoint presentation on its role as the source for innovative healthcare technologies. “After the better part of an hour, as she was leaving, she was talking about partnering,” says Campbell. Just a couple of weeks later, he was making his presentation before senior executives of HCA’s Continental Division. “We presented what we do and why we’re important,” he says. He pointed out that in its 25-year history, Vital/Med Systems had introduced technologies that, while the standard of care today, were unheard of when they were introduced – names they would recognize, such as Arrow, Ballard and even the company that later became known as Guidant.

It was during that meeting that Campbell learned of the A list and the B list. A revelation of sorts came to him, namely, that big IDNs don’t have time to recognize everybody, so they focus their attention on the A-list members. Given that, what’s a B-lister to do?

Moving up the list

Campbell decided that rather than fight the existence of the A and B lists, or even the fact that Vital/Med Systems was on the latter, he would, quite simply, move his company to the A list. He devised the following strategy, which he believes will work for other B-listers as well:

• Sell your personal brand before you sell your products. Explain – and sell – who you are and why you are important to the IDN.

• Aim high in the healthcare system. Connect with the “C” suite and the vice presidents. “It’s an executive-to-executive play,” said Campbell.

• Aim low as well. You have to enlist the support of the people with whom you and your reps must deal with day to day.

• Make sure that everyone in the company – sales reps, customer service reps and others – sell the brand every day. The reason is, before you can sell products, you have to have access to the customer, and the only way to do that is to convince him or her of your value. That is, move to the A list. “That corporate meeting with the local HCA organization moved Vital/Med to their A list!” says Campbell.

Campbell shared some additional tips:

• When you get your audience with senior management, be organized. Use PowerPoint to tell your story.

• Prepare a handout on your company that tells your story as well as the story of specialty dealers. This is your chance to sell your history of innovation. (Campbell’s brochure includes bios of key employees; a history of Vital/Med Systems, including technologies the company has introduced to the market through the years; and a brief take on specialty sales and marketing.)

• Use terms like “partnering.”

• Focus on outcomes and the bottom-line impact of the technologies you can bring to the customer.

• Offer something of value for free. Campbell offered to keep the HCA product chief informed of new technologies he came across at the various clinical shows he attends around the country, even those technologies that he would probably never sell. In return, he asked if she would take a look at technologies that he was considering taking on. She agreed.

Although Campbell’s strategy was an “executive-to-executive play,” the fact is, Vital/Med Systems’ reps still have to sell their own value – and that of their company – at the individual hospital level. The company’s reps have brochures of their own to help them do that.

“Hospitals aren’t stupid,” said Campbell. “They want to run profitable operations. But they think they can only do that with the A list.” So become part of the A list.