July 2008
Feature Story

Anne Ford

To the uninitiated, laboratory outreach may sound like a bloodless prospect, one about as brutal as a game of backgammon. Certainly no one’s suggesting that sales staff don flak vests and face guards before making their site visits. Nonetheless, to Stan Schofield, MS, MT(ASCP), president of NorDx Laboratories in Scarborough, Me., lab outreach is all-out war.

“You don’t go out there and go, ‘Hello, will you give me your business?’” Schofield warned attendees of Roche Diagnostics’ SmartLab 2008 conference, held in May in Chicago. “You think about this, you take it seriously, you put resources into it, and you’re strategic. It always helps to go into battle with a plan. And don’t think that going out and selling stuff isn’t a battle. You’re going to be competing against people who get up in the morning and sharpen their teeth.”

With images like those, Schofield’s talk, “Are Your Outreach Clients Satisfied and Growing?,” strove to nudge, cajole, coax, prod, and all but strong-arm audience members into understanding the importance of strategy, determination, and professionalism in obtaining and retaining outreach customers. Additionally, during the presentation, attendees divided into groups to come up with their own suggestions and examples, then shared them with the rest of the audience.

Citing the KISS principle—in this case, “Keep It Simple, Stanley”—Schofield began by proffering the first rule for a successful outreach program: Add clients. “It is a numbers game,” he said. “The more critical mass, the better deals you get, the better services you provide, the more complexities you can afford.” In a decade, his own corporation, which is affiliated with the MaineHealth health care network, has grown from four to 21 sites regionally.

And it sure didn’t do that by just hanging out a shingle. Strategic sales plans, personalized for specific markets, are called for, along with well-trained sales and marketing staff. “We don’t want to have Suzy Sunshine or Tommy Terrific go out and ask for business because they like people. Those days are over. You’ve got to find somebody who’s a sales animal,” Schofield said. “Real numbers, real margins, real commissions.”

Of course, the entire staff, not just the sales team, should be motivated by competition. “Listen, nobody wants to be a loser,” Schofield said. “It’s important that if you win, people know they contributed to that win. You’re going to have to get your people happy about winning and making a difference. You have to have a staff who gets it that if they don’t do this, they lose, the patient loses, the organization loses.” And that staff includes pathologists, he reminded the audience: “Don’t underestimate the value of local physician relationships—your pathologist with the local clinicians, doc to doc. You’ve got to get your docs out there and talking to people,” he said, not “sitting in a room in the dark pushing glass all day long.”

The spirit of competition becomes especially important for institutions in markets such as NorDx’s, where few new hospitals are being established. “Nobody’s moving to Maine,” Schofield pointed out. “Where we are, there are more moose than people.” That means that until wildlife start wandering in and asking for CBCs, NorDx and similar businesses must focus on courting customers away from the competition, rather than scooping up the business of clients new to the marketplace.

And in any market, connectivity has become a major component of that courtship. “If you can’t connect, you can’t compete,” Schofield said. “The number one reason you will lose a customer now is because you can’t connect to them the way they want it. I’m not talking about a fax machine result. I’m talking interface into the electronic medical record of the practice. Very hard to do,” thanks to the sheer number of electronic medical record vendors, combined with the lack of standardization among their products. “Our competition—and we know who those two guys are—they have bridging technology now,” he said. “They go out and slap a cartridge in, and in 10 days they’ve got your business.” Thus the importance of getting up to top speed IT-wise as soon as possible. Or, as he put it, “We’re a data information provider. That’s what laboratories are. Yeah, we do lab testing, but it’s the data that we sell that makes the difference. If you don’t have IT-dedicated staff, you probably should get out of the outreach business now.”

Audience input included the observation that to gain clients, it’s key to differentiate oneself from the competition, and that one way to do that is to offer customized reports for specific clientele, such as anticoagulation patients. Schofield agreed. “If you can’t differentiate yourself, why should they use you? You’re just like everybody else. If you’ve got something that somebody else doesn’t have, or you do it better and you can prove it, people will give you the shot. If you can enhance the experience, or you tack on national-resource-quality things, that’s a huge differentiator in your market. Now, don’t think you’re just going to find a couple specialized reports sitting on some bulletin board on the Web, and you’re going to download them and be a hero. Your people have to develop the work, but you’ll have something the other guys don’t have.”

Outreach rule No. 2: Keep clients. NorDx boasts a retention rate of more than 99 percent, Schofield said, adding, “If we get our hooks into you, you’re not going to get away.” Still, “it takes sometimes one, two years to get a customer, and they can leave you in a day.”

Attendee Charles Wilson, administrative director of pathology and clinical laboratories at the University Medical Center at Princeton, Princeton, NJ, agreed, saying, “I think it’s more difficult to keep them [clients] than to get them onboard.” As part of Schofield’s presentation, Wilson led a discussion group on client retention and presented the group’s input to the rest of the audience.

In Wilson’s view, superior customer service is the key to keeping clients; however, he called that service “traditionally a weak link for the laboratory,” largely because many laboratorians don’t have appropriately targeted training. That’s a particular shame considering that smaller businesses have a real opportunity to deliver a more personalized experience than larger, faceless corporate entities can. One way to strengthen client services is to use formal metrics, as Wilson’s institution does. If a customer calls and the phone rings more than three times, if the person who answers doesn’t supply the appropriate greeting, if the customer is transferred more than once within the phone system—any of those is considered a customer service failure.

Wilson also said regular visits are vital to retaining clients, but not the empty-handed, “I just came by to say hi” kind. “Make substantive issues the point of your visits—if nothing more than an update about technology in your lab or a new service. Think about what it is you have to offer.

“We invite our clients to every lunch-­and-learn we have, and we have many. We offer in-servicing for blood collection. It has nothing to do with that exchange of commodity: ‘You pay me, and we do your tests.’ It has to go far beyond that. And they’re singing our praises because we are doing things that the other folks just aren’t thinking about doing,” he said.

Another way to earn customer trust is, paradoxically, to admit error. “Be upfront enough to talk about the variances on your behalf,” Wilson urged. “‘We had three lost specimens,’ whatever. By the same token, you also need to show them the things that they need to do better. All of that seen graphically and trended will help make real, sustainable changes. Don’t be afraid to establish and set up forums with your clients to review this with them. If you wait for them to call you, you will always be reacting to their anger, and you don’t want that.”

And in those forums, Schofield added, you should present a “report card” that lets the customer know how they’re measuring up to their own individualized metrics. “Once again, a lot of work,” he said. “But it doesn’t have to be 40 things. It could be three things that you guys agreed you’re going to look at,” such as specimen integrity or patient ID. Whatever the number of items covered, the report should be presented in a quickly comprehensible format. “Graphs are important. Doctors don’t want to read text,” he said. “And always, always put what the peer population is [doing], so they can compare themselves to their colleagues. They don’t care until they find out they’re the one doctor in town who is not doing this.”

The third and fourth rules of client outreach: Create revenue opportunities, and get paid for your work. “Everybody has a margin, or you don’t have a mission,” Schofield said. “And, of course, with these new tests and revenue opportunities, you’ve got to get paid. The biggest failure of regional labs and outsourcing programs in the United States in the past 10 years has been poor financial management, and it’s all in the reimbursement arena. When I got to Maine, the DSO—days sales outstanding—was 138 days. We have been running 37 to 44 days for eight years. Getting paid for us is a big deal, and we work at it.”

Rule No. 5: Reduce expenses. “We’re all very familiar with the fact that you don’t cut staff. You don’t have staff to cut,” Schofield said. Nonetheless, the largest item on the ledger of general expenses is usually labor. To get more bang for your FTE buck, then, it’s crucial to allocate staff appropriately: “Have the right people doing the right job. Have your laboratory scientists doing the cognitive skill sets, not the manual labor.”

Of course, before you can reduce expenses, you have to know what those expenses are in the first place. “Cost is king,” Schofield said. “If you don’t know your costs, you can’t do anything in this business. Well, you can, but the other guys who do know their costs are going to take advantage of you someday. You can’t be off by 50 percent when you’re doing 3 million tests, 4 million tests. ‘Oh, I’m clearly within rocket range.’ No.”

Once you know what your expenses are and have reallocated staff accordingly, look to technological cost-cutting solutions such as autoverification. In addition, Schofield recommends simulation software, in which “we lay out a configuration of instrumentation or workflow and run a million cycles on the thing to try to determine failure points,” he said. “It’s a lot easier to figure it out on the computer screen than to have a bottleneck in your lab and all your clients screaming because your work’s not getting out.” Strategies such as Lean and Six Sigma can also trim expenses. “You must be in those kind of disciplines by now,” Schofield stressed. “Some people say you can’t do it, it’s too expensive. We had people trained at $20,000 apiece—black-belt Six Sigma people, fully certified in the laboratory arena. It’s a cheap investment for what we’re getting out of it.”

The good news is that following Schofield’s five rules of outreach can help laboratories grow and thrive. And the bad news? You can’t let down your guard, ever. “You have to do training, you have to do the books, you have to do all this work with all these people, and you think, ‘When is it ever going to end?’” Schofield said. “It’s not. It’s just the price of admission.”