With the fervor over health care reform, many have been consumed with the debate over the “public option” and how we will pay for it.  With all the banter about who should be covered, there has been little discussion about how medical science and technology will converge to change the rules of engagement for the medical community.

There are fundamental flaws in the way our system is constructed:

A)     The people who most need medical insurance (like the uneducated and poor) cannot afford it

B)      The system is highly reactive, based on treating the sick instead of preventing disease.

C)      Without market forces at work, people are less apt to take responsibility for their own health.

The Federal government has already allocated $19 Billion in funding for the creation of electronic medical records (which could cost $30 Billion by some estimates). Electronic record keeping when combined with new nano-technologies will allow medical science, doctors and insurers to predict specific ailments based on a multitude of factors. Your health care provider could mine data to know how many steps you took at the gym in a given day, your  prescription history, and preference for Jamba Juice into an algorithm that could better predict your likelihood of heart disease or cancer . The potential for abuse is alarming. Yet, the emergence of such capabilities mark the true innovations that could result from reform, and the real opportunity to lower costs and improve the effectiveness of health care for American families.

If we really want health care reform to meet its potential, we will need to see past our fears about privacy and embrace predictive modeling.  Those of us who make good choices about our health should gravitate towards solutions that will allocate costs based on risk factors.  I should not be granted the privilege of superior care at a reasonable cost because of socio-economic status, but because I choose not to smoke or regularly frequent Burger King.

Much like the recent melt down in the financial sector, when risk is not distributed thoughtfully within an industry, the total costs escalate.  If the Federal government  (i.e. the tax payer) is going to foot the tab for national health care, we can only expect that we find a better method for distributing the risks and the costs.

I hear it from everybody, from the accountants to the architects, the world is simply much more competitive than it used to be. 

No industry has faced more brutal price competition than construction. In an environment where differentiation is hard to come by, The Concrete Network stands alone.

Concretenetwork.com is positioned on the Internet as the go to site for information on, well…concrete. The site provides everything from training on how to mix concrete to a database on how to find contractors.  They even have sponsors for their website. If an organization has the initiative and entrepreneurial spirit to be subject matter experts in an industry as basic as concrete, imagine what is possible for the attorneys, insurance agents, and manufacturers. It just takes some imagination.

I have spent the last year writing a book, blogging, writing articles and creating video testimonials to make my point.  If you don’t value your services, no one else will.  Creating a differentiated offer takes time, money, energy and resources, but mostly it takes will….the will to compete, the will to charge the hill and take on the competition. The easy thing to do is to whine that competitors are undercutting your prices and sabotaging the market. Of course, they do that because they are bit players in your production, but you have the ability to take them down.

Regardless of your offering, if you want to maintain price continuity and profit, one must find a way to add value whether it be through education, additional services, technology, support, etc.   You may need to experiment to find the right formula, but in the end, customers expect to pay more to vendors who offer more services and pay less to the lackeys who offer less.

Do you have the will to compete with the business that is replacing you?

As we have found a comfort zone with $3.00 a gallon gasoline, one might wonder, are $40 per barrel oil prices sustainable?  We are ripe for further volatility in energy prices and huge price swings at the pump.  Consider the converging factors that drive the price of gasoline:

Energy prices are particularly critical because volatility can inflate many layers within the value chain and prices go up faster than they come down. All it will take is a regional conflict, hurricane or other unforeseen event to create a spasm in this market.  U.S. companies who operate fleets or are otherwise dependant on stable transportation or raw material costs are well advised to project a higher price for energy through 2010 and beyond.

The spasm of the global economy over the last year has completely recalibrated the customer- vendor relationship.   In order for suppliers to fend off commoditization in a difficult operating environment, sales professionals must be adept at renegotiating their relationship with customers.

Purchasing decisions have become more transparent, and in many cases, the primary buying contacts of the past have become irrelevant. The $100k decision that was made previously by a Director is now being made by a Vice President.  At a time when vendors face greater risks with customers, there are opportunities to deepen relationships and have more strategic conversations with decision makers.

In fact, offering up a senior level meeting to discuss providing more value or “reducing the total cost of ownership” is compelling for the customer, and opens doors for the supplier.   Such meetings often serve as a lever to identify latent customer needs that can be converted into improvements that create a more synergistic and sustainable business relationship. The downsizing of the workforce provides significant opportunity for vendors who can effectively replace internal functions that are being neglected, or outsourced.

Effective sales people who utilize consultative style selling techniques are adept at discovering customer needs that they cannot effectively articulate.  During the dot com bust, I held a senior position for a national gourmet food supplier.  One day I fielded a call from one of our Regional Managers who asked if I would take a senior level meeting with him at a major U.S. retailer for which our company had gained little traction. I agreed to fly to Minneapolis with him to try and reign in the elephant.

During the meeting, I asked the V.P. a series of fairly provocative questions such as “what are your corporate initiatives, how are you evaluated, etc.” They were not the type of questions that a supplier generally asks of a customer, and I remember the V.P. being amused and befuddled by some of the questions.  After about 45 minutes of discussion, I came to discover the real problem which was that the customer did not have the capacity (in the form of labor or expertise) to manage our category of products. I asked him “what if we could put someone in your office to manage the category for you?” I will never forget the customer’s response: “you mean you would do that for me?” We left the office with a multimillion dollar order at which time I had the Regional Manager buy me a really big steak. Consequently, we renegotiated our relationship and positioned ourselves to provide an innovative bundle of services in alignment with the client’s existing strategic initiatives.

In a world where headcount is being cut, vendors should not be thinking about how to cut prices, but how they can deliver more service.  The art of selling (and serving customers) is really about listening.  At a time when customer’s awareness of the value provided by supplier is heightened, there is a bounty of problems for vendors to solve.  Regardless of whether you are an insurance company or manufacturing widgets, senior managers need to be proactively meeting with decision makers to redefine their offer.

This is not a time to allow salespeople to own customer relationships exclusively. To do so emboldens them not to share critical customer insights that can reshape the service offering.  As business development slows, salespeople engage in more tactical thinking (such as cutting prices).  This market presents the opportunity to teach salespeople how to diagnose needs and to enable their organizations to provide more robust solutions.