ASCLEPIUS CONSULTING: THE

SALES FORCE DILEMMA

Submitted by Group 3
Q1.What makes a market attractive ? How will you segment to the healthcare information
systems market in India and which segment would you recommend to Asclepius?

HMIS Market Attractiveness

Current (2012) Future (2015)
Market Potential
₹ 460 ₹ 980
(in crores)
Market Size
6081 NA
(no of potential clients)
Regional competitors ;
Competition
Difficult to replace the product

Single Multi Nursing Charity Corporate Day Care

(Figures in crores) Total
Speciality Speciality Homes Hospitals Chains centres

Total Market potential ₹ 115 ₹ 143 ₹ 55 ₹ 53 ₹9 ₹ 63 ₹ 437

Current Company Stats ₹6 ₹1 ₹2 ₹2 ₹1 ₹9 ₹ 21

Percentage of market
6% 0.5% 3% 4% 10% 14% 5%
potential

Sales Process Easy to Medium Moderate to Tough Tough

Revenue in each segment = (Number of entities) x ( Avg. Deal size in INR )

 Current Status of the Company

Market Potential Current Revenue Percentage of market

Segments Sales process
(in cr.) (in cr.) potential

Segment A Easy to Moderate ₹ 118 ₹ 11 9%

Segment B Moderate to Tough ₹ 167 ₹8 5%

Segment C Tough ₹ 152 ₹2 0.1%

Segment Prioritisation Average Deal Size Deals per Annum Deals per Quarter
Segment
( in lakh ) ( 5 Cr per annum) ( 1.25 Cr per quarter)
1 Multi Speciality
Multi -Speciality ₹ 24 21 5
2 Single Speciality
Single Speciality ₹ 11 44 11

3 Day Care Centres Nursing Homes ₹3 146 36

Day Care Centres ₹2 203 51

4 Nursing Homes
Charity Hospitals ₹ 18 28 7
5 Charity Hospitals
Corporate Chain Hospitals ₹ 27 18 5
Corporate Chain
6 Mix of MS & SS ₹ 16 8
Hospitals 31
Q2.What are the factors that you will take into account while deciding on a
sales strategy? Identify the same with relevance to Asclepius and its target
market.

The Target market for Asclepius would be Multi-specialty & Single-specialty hospitals as
these two segment together contribute to 59% of Asclepius market potential.
Factors affecting sales strategy;
• Decision Maker: The decision maker & influencer play an important role in completing
any sale. In this case usually the MD(Medical Director) or CEO is the top stakeholder
while IT or administrative staff can influence the final decision of the firm. A top-down
approach will reduce the resistance and is likely to be more transparent process
• Segmentation: Based on segmentation the firms decide on distribution channel & TGT
market. It also helps in allocation of resources and prioritization
• Market Size: Market size helps the sales firm in deciding upon number of sales
personnel & resellers to be assigned in a particular geography for a certain number of
clients.
• Size of Client: Size of client also helps in deciding no of Sales personnel. For bigger
clients AMC forms a good chunk of company revenue. The firm can deploy account
managers for managing bigger accounts.
• Competitors: Sales Strategies are designed keeping competitors in mind. Asclepius key
competitors include big IT firms like Infosys, Wipro and smaller firms like Akhil
systems & Karishma Softscripts among others. Based on competitor’s data Asclepius
would decide on its product offering, pricing etc.
Q3. Describe the decision making unit at a large hospital? How is understanding the
DMU relevant to the sales strategy for Asclepius?

Medical
director / CEO

Management Board of Outside Doctors of Administrative

speciality IT Team
Team Directors Consultants staff
team

• Decision making power – The main decision making power of the health management
information system lies with the top management of the hospital. Therefore the sales team
for Asclepius must know exactly whom to target. Experience suggested that the job was
more than half done if the sales person had the buy-in of the top stakeholder.

• Investment of time and energy- A bottom-up approach would sometimes lead to

resistance at the lower and middle levels of the hospital and this would end up dissipating
the time and energy of the salesperson.

• Transparency in decision making – The top management evaluated proposals on the

basis of the total expenditure, the benefits of process optimization. They were more
transparent in evaluation of the vendors and the criteria for selection and closure.
Q4. Discuss the purchasing behaviour of the various segments. How will you utilize this
information to devise your go-to-market strategy?
Segment Purchasing Behaviour Go-to market Strategy
Day Care Centres, • Target Doctors or Departmental
Nursing Homes • Price Sensitive Heads by use of testimonials
and • Requires only basic version • Focus on process efficiency
Charity Hospitals • Simple Decision Making process • Resellers can be used as
(<100 Beds) representative
• Price Sensitive • Target MD/CEO
Charity Hospitals • Well defined process framework • Focus on cost-benefit analysis
(100+ Beds) • Enterprise Level Selling • Combination of both resellers and in-
• Complex Decision making process house sales representative
• Complex Products (Depth of • Target MD/CEO
Single Speciality knowledge required for specific • Focus on ROI
Hospitals modules) • In-house sales representative since
• Complex decision making process technical knowledge is required
• Target Departmental heads
• Might appoint independent
Single and Multi- • Focusing on cost effectiveness,
consultants
Speciality process optimization and after sales
• Well defined process framework
Hospitals support
• Complex decision making process
• In-house sales representative
• Might appoint independent
• Target MD/CEO
consultants
Corporate Chain • Focusing on process optimization
• Holistic approach to product
of Hospitals and after sales support
implementation
• In-house sales representative
• Complex decision making process
 Segment Purchasing Behaviour Go-to market Strategy
• Target CEO/MD directly/through
referrals
• Value in Basic Administration, Billing,
• Module wise pricing
Pharmacy, OPD and IPD Modules.
30 – 100 • Research and provide Cost- Benefit
• Price Sensitive
Analysis for addition modules. Offer
• Hesitant to Change
discounts for each addition.
• Leverage reseller network
• Value in all modules • Target CEO/MD directly/through
• Needed support in overall process referral, hire consultants
management • Licence based pricing
• Installation was of strategic importance • Focus on customization and cost saving
100 – 300
• Robustness, Scalability and ease of use due to web-based system architecture
important (10-15k per machine)
• ROI essential • Use in-house sales rep and referrals in
• Credibility of Vender important addition to resellers
• Value in all modules • Target CEO/MD directly/through
• Needed support in overall process referral, hire consultants
management • Licence based pricing
• Installation was of strategic importance • Provided initial offering at a discounted
More than 300 • Robustness, Scalability and ease of use price as the revenue for maintenance and
important. support will be substantial
• ROI essential • Use in-house sales rep, experienced
• Credibility of Vender important consultants and referrals in addition to
• Need management consulting service resellers
 Q5. What are the various go-to-market alternatives in front of Asclepius? What are their
pros and cons and which model would you recommend?

Asclepius can either increase its Sales force or assig new resellers to reach more customers

Selling through Inside Sales force Selling through Resellers

Pros: Pros:
• Dedicated sales force • Higher market penetration initially
• Higher Conversion rate • Brings a clientele along with them
• Better sales learning opportunity for the firm • Takes care of credit/payments from hospital
• Quicker resolutions of issues or
apprehensions if any.
• Cons:
Cons:
• Additional agent between the firm &
• Costlier Option
customers, takes a chunk of profits.
• Require additional efforts to reach clients
• Every reseller needs to be trained, therefore
• If sales officer decides to leave, need to find higher training costs but still a lower level of
expertise
and train the replacement in a short period
• Dependent on sales representative for demo
• Higher risk: Incase a Sales representative
& closing the calls
decides to switch to a competitor, may take
existing clients with him.
Q.5(b) Which model would you recommend?

The expected target of cost to sales ratio = Cost of doing sales / Amount of target sales
=20% (Given in the case)

We have the following information with regards to both the models:

Parameter Inside sales person model Reseller + Support rep model

Range of deal 5Lacs to 15 Lacs 5 Lacs

size
Frequency of quarterly i.e. annually 4 deals 10% of 20 warm leads = 2
sales deals
Total cost to company 8.28 Lacs + 2% Incentive – percent of 1Lac + 5% reseller incentive +
sales
1% support rep incentive- % of
sales

• To meet target cost to sales ratio, through inside sales person model,
8.28 Lacs + 2% Incentive - % of sales should be = 20% of sales

• Hence, by calculation Sales per sales person should be 46Lacs per annum or
11.5 Lacs per quarter i.e. deal size should be minimum 11.5 Lacs which is
possible as it lies between Ranjan’s estimated range of deal size.
Reseller + Support rep model

We consider the group of 10 resellers + 1 Reseller support rep for ease in calculation.
Total costs except incentives for 10 resellers = Rs. 10,00,000
Total costs except incentives for 1 Reseller support rep = Rs. 8,28,000
Reseller Incentive - percent of sale: 5%
Incentive for 1 Reseller support rep for every 10 resellers = 1%

To meet target cost to sales ratio, through reseller model,

18.28Lacs + (5% Incentive + 1% Incentive)- % of sales should be = 20% of sales
Hence, by calculation Sales should be 130.57 Lacs per annum or 13.57 per reseller per
annum.

This works out to be 6.79 Lacs per deal for each reseller i.e. deal size.
However, Ranjan’s best estimate is 2 transactions with average deal size of 5lacs for
reseller.

Also considering our TGT segment which is Single & Multi-specialty hospitals, inside
sales force would be more equipped with handling such clients.

Hence, we would recommend the inside salesperson model as a go to market

alternative to meet the business goals.
Q.6 Based on the data provided in the case, how many salespeople or resellers would
Asclepius need to have to a) break even and b) to effectively cover the market.

From previous calculation, we are benchmarking average deal size target = 11.5 Lacs, annual
sales target = 46 Lacs for every salesperson and we are using the inside salesperson model.

A. No of salespeople needed to break even :

Target Sales per salesperson (S) = 46 lacs

Variable Costs per salesperson (V) = 8.28 Lacs + 2% Incentive of sales
= 8.28 Lacs + ( 0.02*46) Lacs = 8.28 Lacs + 0.92 Lacs
= 9.2 Lacs
Contribution per salesperson (C) = S – V = 36.8 Lacs
Fixed Annual Costs = 50+ 25+ 10 = 85 Lacs
Break even Point (No of salespeople) = Fixed Costs / Contribution per salesperson
= 85/36.2 = 2.35 i.e. 3.
No of salespeople needed to break even = 3

B. To meet the sales target of 50 million Rs:

No of salespeople needed = Total Sales Target / Target Sales per salesperson
= 5 Cr/ 46 Lacs = 10.87 i.e. 11.
No of salespeople needed to meet the sales target of 50 million Rs = 11
Q.6 Based on the data provided in the case, how many salespeople or resellers
would Asclepius need to have to a) break even and b) to effectively cover the
market.

C. To effectively cover all the target segments:

In 2012,
Target segments (single and multi speciality hospitals) sales potential
= No of potential entities in each type of hospital * Average Deal Size
= 25800 Lacs
Target Sales per salesperson = 46 lacs
No of salespeople needed = 25800/ 46 = 560.87 = 561

D. To effectively cover the market :

In 2012,
Sales potential of the market = 43720 Lacs
Target Sales per salesperson = 46 lacs
No of salespeople needed = 43720/ 46 = 950.44 = 951

Every year the industry is estimated to grow at a rate of 22%, so accordingly more no of
salespeople will be needed in future years.
Thank You!