Ask manufacturer or distributor sales reps what they think about
group purchasing organizations, and you’ll get a wide array of
responses. Some value the opportunities that a GPO contract creates to
grow sales in the GPO members’ facilities. But many complain – some
noisily – about high fees, complicated contracting processes, and
barriers that GPO agreements can create for non-contracted suppliers.
Here’s my two cents: GPOs are here to stay. Sure, the landscape is
changing rapidly, with regional purchasing coalitions, local
contracting, and so on. But providers’ desire to aggregate their
purchases and achieve volume discounts, sharebacks, and other benefits,
So it seems to me that successful suppliers should find ways to work within this landscape to build partnerships and grow sales.
Here are some insights I’ve collected from folks who work closely with GPOs and their members:
- Sure the national GPO contract is just a “hunting license” – but it’s a valuable hunting license.
It gives the salesperson the opportunity to work with, rather than
around, supply chain leaders in a facility. (Often, if your company is
not on GPO contract, you won’t be welcome in the member facility.)
- However, just because you win a contract, don’t just assume that the GPO will push your products for you. Instead, meet with the GPO’s sales team and put together a strategy for helping shift business over to your contract.
- Similarly, don’t assume that your great contract pricing will be sufficient to generate demand with GPO members. The attractive pricing must be backed up with a strong sales and marketing message to member providers.
- If your company is not a contracted supplier, consider trying to work with local health systems or regional aggregation groups.
If you succeed, you’ve not only gained some business, you’ve better
positioned your company to win a deal next time the contract comes up.
- Also be sure to investigate the dozens of GPOs and aggregation groups that aren’t in the top 5.
Many provider associations sponsor their own group purchasing programs,
and there are a number of smaller independent GPOs. Check to see which
ones, if any, are a good fit with your sales goals.
To connect with some 40 GPOs, regional purchasing groups, and health
systems, be sure to attend the GPO & IDN Reverse Expo at HIDA’s
Streamlining Healthcare Expo & Business Exchange, September 25-27 in
Stay Informed On Group Purchasing Trends
- Regional affiliates and aggregation groups – multiplying, competing for members especially in non-acute
- Large IDNs – consolidating, leveraging their volume, in some cases forming their own GPOs
- Non-acute providers – big growth area for group purchasing
- Broader scope of contracts – GPOs moving into purchased services, PPI, and more
Reach Customers Through Multiple Channels
- Sell at the GPO, system, and field level (relationships still matter!)
- Work closely with your channel partners: distributor, manufacturer, GPO, buying group
- Align messages within the company: marketing, field sales, corporate sales, telesales
- Utilize various channels of communication: social media, email, advertising, and selling