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August 2, 2007

On Selling to a Small Business Owner

by Sridhar Ramanathan

Recently I wrote about Warrillow’s bookDrilling for Gold” because I found it a terrific resource for marketing to the small medium sized business. He categorizes owners into mountain climbers, craftspeople, and freedom fighters. I’d like to share with you a conversation I had with a classic mountain climber, Dr. Roy Saldanha. He runs a moderate sized (35 employee) veterinary hospital in Riverside, California. I interviewed him to find out what sales and marketing approaches really worked best from his perspective. And I’d encourage you to pose the same four questions I ask of him to your own small business customers and see what new insights you get. You might be surprised.

First a little about “Dr. S” as his clients call him. Roy joined Arlington Animal Hospital after graduating from U.C. Davis Veterinary Medical School in 1999. Roy quickly became managing partner (the boss) as he grew revenue 35% to $2.5M with a client base of 17,000 active customers. The hospital now provides full veterinary care from preventative to emergency and orthopedic care.

I think Roy is a classic mountain climber because he is fiercely independent, passionately seeks ways to grow the business, and is willing to invest aggressively for the future of the business. In fact, he’s quite progressive in using technology to offer greater client service and improved efficiency. His technology purchases include: desktops, HP servers running Linux and Windows, Gigabit LAN, wireless LAN, and veterinary application software. He pretty much handles IT by himself but turns to Western Data (a local VAR) on a time and material basis to do projects like upgrading servers or replacing failed hardware.

How do you justify a technology purchase?

One example that comes to mind is digital imaging. Switching our facility from traditional chemical based imaging (xrays, scans, etc.) to digital was a big investment for us, over $150K. We’re probably a pioneer in using digital imaging. Why did I decide to take the plunge? Basically, to help us save time and money and to add more value to our clients. Specifically to:

  • Reduce turnaround time from 15 minutes to 30 seconds. This really helps with staff productivity and for emergencies when you don’t have time.
  • Make re-shooting easier; hard film takes longer and costs more.
  • Avoid costs such as film, chemicals, and disposal of hazardous waste. And with 5-year leasing, we actually get positive cash flow immediately!
  • Get better images -- digital images can be manipulated for different views.
  • Reduce/eliminate radiation which is always a good thing.

What is the best way for a technology rep to sell to you?

Vets are very price sensitive. It drives me nuts when sales reps think we are cheap skates. It’s true that we are not like human hospitals that can afford big IT budgets and big IT staffs. But we do spend money, about 3% of revenue. But I’d like to think that we do so smartly. As mentioned before, we’ve spent hundreds of thousands of dollars on equipment to move our hospital to the digital age---radiology equipment and ultrasound imaging. The most effective sales reps understand our business drivers. For example, the Southwest rep (distributor for ICR Co products) did a good job by saying “let me show you how I can save you time and money, and also free up your staff.” The other reps were barking up the wrong tree when they tried to push “human grade equipment” which is not a real business benefit for vets.

So the best way to sell to vets, and probably all business owners, is to show us how the purchase is a smart one. Show us the business benefits the technology will deliver. Don’t talk just about features and functions. Talk to me more about the tangible results I will get by implementing it. Some vets fear that new technology won’t be as good as the approach they’re already using. So it’s up to the rep to de-mystify the technology, show what results can be achieved, and explain why that’s better than today’s approach. Then make it a financial no-brainer by showing how leasing can help make it a cash positive decision.

Why did you choose the one vendor for your largest technology purchase?

Basically, my process was to do some homework first on the internet, read magazine articles, and ask fellow vets which vendor they chose for digital imaging and why. Then I asked four companies to present and bid. I ultimately chose Southwest Imaging because they did the best job on three criteria:

  • Minimal learning curve – we can’t afford to send staff away to learn a new technology. Their solution was windows based and was very easy to use and administer.
  • Maintenance and support – Southwest guaranteed 24-hour turnaround time to fix hardware and software problems. That’s critical since this equipment is key to my revenue stream.
  • Bang for the buck – they offered the right set of features at a reasonable price, not the lowest price. One of their competitors kept pushing me to buy “human grade” equipment thinking it would be attractive for vets. Turns out that animal imaging requires greater detail and magnification because animals can be small. Southwest showed how their product was better suited for the job.

What’s the best way to market to you as a small business owner? What information sources do you rely on before making a purchase decision?

Before I make a big technology purchase, I really rely on three sources of information:

  • Industry magazinesDVM magazine, Veterinary Product magazine, and Veterinary Compendium.
  • Internet search – sites such as NewEgg, CDW, Outpost/Fry Electronics, and PC Connection.
  • Word of mouth – meet other vets at association meetings, VIN (Veterinary Information Network), and trade shows (Central Veterinary Conference)

I can also tell you what’s a big waste of marketing bucks. Don’t bother with promotions which say “call for quote” because we’ll never call. Vets want to know the price and what they’ll get for it right upfront. Secondly, don’t use email marketing since we consider it spam and won’t open it. Third, most direct mail pieces go straight into the trash. And lastly, forget about sponsored ads because we don’t click on them. I wish more marketers talked to their small customers like me and asked us the four simple questions you did. I bet they’d learn a lot.

Posted August 2, 2007 |
Posted to Marketing Management

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