Your customers don’t need everything they are requesting.
One thing I have observed over the last 20 years as a value analysis trainer and practitioner is that your customers don’t need everything they are requesting. Most of the time they are either selecting their products, services or technologies based on recommendations from a sales representative or they select their specifications from a catalog. Either way, the chances that your customers require every function and feature they are requesting, from my experience, is negotiable. Here are two tactics to help you negotiate with your VA customers:
1. Value Justify Any and All Functions and Features
One of the most important jobs of a value analysis practitioner, as I see it, is to value justify each and every function (primary, secondary, and aesthetic) that a customer is requesting on their new product, service or technology. Why? Because your customers don’t need everything they are requesting. How do I know this to be a true statement?
As a value analysis practitioner, I have challenged hundreds of requisitioners on specifications (i.e., functions and features) of products, services, and technologies they are requesting. Approximately 67% of the time, I am able to identify functions and features that customers either can’t justify or explain how these new functions or features will help them do their job better.
The first thing I do (if practical) is to obtain a sample of the product, service or technology to see for myself what the customer is talking about. If it is an I.V. set, then I want to know how the customer is going to use the three access ports they requested, the securement device they like, and the very expensive drip device they want, etc. If I still have questions, I will visit the clinical department with the requisitioner to further understand how he or she will be employing the new product, service or technology in their department. These two steps most often answer all of my questions.
After our review of the request, the requisitioner will typically agree that they don’t need some of the functions and features they have requested and then decide to do more research to locate a product, service or technology with the right fit. This tactic has saved thousands of dollars annually for the hospitals we have worked with over the years.
2. Negotiate The Number of Times They Will Use a Function or Feature
If the customer in the above scenario can value justify the functions and features, I then ask how often they will be using the functions and features. What I often find is that the customer’s answer is once a month, once a quarter, or even once a year. Sometimes, their answer is, “Just in case I need it.” Well, we would all like to have redundancy in our products, services, and technologies, but the cost of doing so could be prohibitive.
For instance, let’s say that only one I.V. port is required 80% of the time, two ports 20% of the time, and a third port is almost never needed. If an I.V. set with three ports costs $5.28 and a two-port costs $4.28, we are spending $1.00 per patient day just in case it is needed. This is not a very cost effective way to do business!
A better way is to ask the customer where he or she would obtain an I.V. set with three ports if they needed it for a patient. About 80% of the time the customer will state that another department would have one available, if needed. This is when you need to negotiate with your customer to reduce his or her request to two ports which is value justified based on the data at hand.
To sum up, it’s almost impossible to negotiate with your VA customers if all you have is their requisition to guide your way. However, if you store these two tactics in your value analysis toolbox, you will find many ways to use them to negotiate with your customers for better outcomes. Best of all, everyone will feel that they are treated fairly and professionally at the end of the day.