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Why Providers Buy

Let’s say that we are talking to a CIO about their PACS, and we ask, “Hey, is this product part of your long-term plans?” If the CIO says no, then that launches an interesting set of research that we call Decision Insights.

Not only is this information useful for healthcare provider organizations, but it is also compelling market research for the healthcare vendors that are being discussed. Every sales team wants to know why they win new customers and why they lose others. Vendors want to know whether they are on the customer shortlist and whether they are being replaced. Decision Insights answer questions about the expectations, innovations, and strengths of the vendor-customer relationship.

KLAS began sharing Decision Insights in 2018, and our most recent 2020 National Trends report was just published. In our last three National Trends reports, we have answered some compelling questions.

Why Do Vendors Win Customers?

In 2018, we discovered the correlation between the customer shortlist, new customer wins, and overall satisfaction.

Vendors with a below-average consideration rate had an average score of 78 out of 100 in overall satisfaction. Those with above-average consideration rates got an average of 82. No one was really knocking the ball out of the park.

overall satisfaction by consideration rate

In other words, a vendor’s current customers don’t have to be incredibly satisfied for the vendor to make potential customers’ shortlists.

But vendors don’t just want to make the shortlist. They want to win new customers. We also asked people which vendors they were leaning toward or already signed a contract with. We called the data that we got from that question the win rate.

That’s where the correlation with satisfaction comes into play. Vendors that aren’t taking care of their customers can make the shortlist, but they are less likely to win new business.

What Are the Markets with the Highest Energy?

In 2019, we took a closer look at the market segments with the highest consideration energy.

One market where there are a lot of shifts is imaging. Organizations are no longer satisfied with buying their VNA from one vendor, a universal viewer from another, and a PACS from yet another vendor. Customers are looking for enterprise solutions. They want integration and uniformity, simplicity and consolidation. It is easier to work with one vendor, and there are fewer communication issues between products that all come from one vendor.

Another market with a lot of energy is population health. Not long ago, population health was a new market, and customers just bought whatever product would do the job. If one product didn’t have all the functionality that was needed, the customers would buy another product or two to layer on top. There were a lot of combination buys. In the last year or so, customers have been getting rid of those products and asking a new question: “What product is going to help us drive outcomes?” Outcomes are the main reason why people buy in this market.

The ERP market is also changing rapidly. The movement to the cloud has been rather disruptive. Workday’s innovative cloud-based product has forced Oracle and Infor to follow suit. In turn, that has motivated Workday to up their game around supply chain functionality and other things.

The secure communications market is showing a lot of energy as well. That market is all over the map with both niche and enterprise solutions.

What Characteristics Are Customers Looking For?

There is a pattern in all the market noise, and that is innovation. The products with the most innovation drive the most considerations and retention.

In 2020, we discovered another key factor: integration. Potential customers aren’t just looking for new technology; they want technology that is going to fit into their ecosystem. If the integration isn’t great, the organization will struggle. I have talked to a lot of CIOs that have told me that they just can’t take one more piece of new technology that doesn’t integrate. They don’t have enough time, energy, or ability to add technology unless it integrates well. That is a key piece of information for potential disruptors in healthcare IT.

delivery of new technology vs supports integration goals

Want to know more? Check out our Decision Insights 2020 National Trends report. You’ll get detailed insights on a host of vendors in a variety of market segments.




     Photo Credit: Adobe Stock, Igor