Fee-for-Service: How to Identify Potential Purchasers of Services

by Michele Martin on February 12, 2016

This is part of our ongoing series of posts featuring material drawn from the CIL-Net self-study manual, “Establishing and Managing Fees for Service in Centers for Independent Living.” This week we are looking at how to identify potential purchasers of services.

Now that the CIL has planned, re-tooled the organization, and made programmatic and fiscal changes to support an FFS venture, the next step is to locate entities that would want to purchase services from or establish contracts with the CIL. Establishing a process for seeking opportunities is essential. The process needs to be implemented in a systematic manner and includes at a minimum searching Internet sites, newspapers, government sites, Federal Register, etc. that are used to notify the public about requests for proposals (RFPs) and other solicitations for service. Active networking is an even more effective strategy to identify needs for service that fit with the CIL’s capacity and mission. Ask individual entities what their process is for publishing solicitations and be open to developing projects that are never advertised, but designed with your CIL in mind.

There are numerous potential purchasers, some of whom the CIL may be more familiar with than others. Vocational Rehabilitation, Workforce Services, Human Services (children and adults), Medicaid, Social Security, Managed Care Organizations, communities tied to rural development loans, insurance companies, villages, cities, townships, and business are all possibilities. The CIL will need to market its FFS services and meet new potential customers who could benefit from the services being offered. This isn’t a passive process. The CIL will need to be proactive and seek potential purchasers.

A purchaser is someone who has the budget, accountability, and willingness to invest that budget to get better results―really easy on paper, but quite challenging to find. One way to get easily sidetracked in finding a buyer is that you have this great idea; you share it with someone who agrees with you and invites you to write a proposal; you send it in, and they say, “This is really great, but I have to check with so-and-so.” You then understand that you have been having conversations with someone who has no authority to make the decision.

So who is not a buyer? Most people are not buyers. Many of them think they are buyers but in reality they are not. However, non-buyers can help you by giving you information and feedback, and helping you to build connections to the decision maker. Unfortunately, these same non-buyers can exert influence that can bring things to a halt. To circumvent a non-productive non-buyer loop, ask good questions such as:

If we agree to proceed, what is the process?

How do you (the buyer) make decisions?

Who has the authority to sign the contract?

Who could be a champion for this effort?

Whose budget does this impact in the buyer’s organization?

Who else do we need to include in our conversation to move forward?

When all else fails, aim for a face-to-face meeting with someone at the executive level in the organization. They may refer you elsewhere―“this is just the project for so-and-so in X department.” Respond positively by saying, “I will check back after a meeting with them to make sure I’m on target with what you want and what you’re thinking, and what we just agreed to here.” Always try to go back up to the buyer and keep them in the loop.

Sometimes getting to the buyer means going around your contacts. After several attempts to work through your contact by suggesting a meeting with his or her boss with no success, approach the boss directly with, “I’ve been in conversation with X and she said I might have some interesting ideas, and there are some things I want to share with you. How does that sound?” Stepping around your contacts can be uncomfortable but also sometimes necessary. Why? Because you believe in what you’re doing and want to serve the people you want to serve, you have a good idea, and you want it to work!

How to Get a Potential Purchaser of Services to Value the Product/Service

In order to get a potential purchaser (buyer) to value the products (services), the CIL will need to figure out what the purchaser values. The CIL needs to be able to sell what someone else values. Hopefully, the potential purchaser values quality service and strong outcomes. Cost effectiveness is always valued but some may just want cheap services. If just cheap services are what a purchaser seeks, the CIL will probably want to keep looking. Some purchasers want to purchase services and have a guarantee that there will be no problems. If this entity purchases services from the CIL, the CIL will need to stay on top of any potential problems and address problematic areas very proactively. Other potential purchasers like to maintain a positive relationship with providers, value good communication and documentation, and consumer satisfaction. Knowing what the potential purchaser values will help the CIL gain insight into how to market its services. A bad pre-business relationship predicts a bad in-business relationship. (Not all business is good business.) Most potential purchasers value multiple aspects of a product or service, and because of their uniqueness, CILs have the capacity to be a value-added product.

As the CIL drills down to the actual product or service level, it is important to identify how the product or service is compatible with the CIL’s capacity. During the development phase, the center must consider its own strengths and what the purchaser values. Only promise what the organization can actually deliver. If the service is a significant stretch for the CIL to provide, then it might be best to consider another service where the CIL has more experience and capacity.

In seeking to identify a potential purchaser, be persistent and consistent. Gradually highlight the CIL’s values and share consumer stories to highlight relevant outcomes. If feasible, do a comparison with the competition to emphasize what the CIL brings to the table.

Once the CIL has identified a purchaser, you can use center events to build a relationship with the purchaser. Ask the purchaser to be a guest speaker at a board meeting or highlight their business in a newsletter article. Inviting them to social events is also useful and cross training staff can really cement the working relationship. Remember this is a business and the CIL needs to nurture its relationships with funders or buyers.

Application

Share an example from your experience of someone (individual or agency) who seemed interested in a project proposal from your center, and later revealed they had no authority to make a decision.

Share an example of someone who provides your CIL with business or funding that succeeded even if there were some roadblocks in the process.

In hindsight, what difference do you notice between the two experiences?

Resources

Delivering Value to Customers

Customer Satisfaction is Worthless, Customer Loyalty is Priceless: How to Make Customers Love You, Keep Them Coming Back and Tell Everyone They Know, Jeffrey Gitomer, 1998. Bard Press, Austin, TX.

Leave a Comment

Previous post:

Next post: