Management has their heads in the sand
Pros
I was hired by Teladoc last year to drive sales with Fortune 500 companies. The attractive comp package and greenfield opportunity for their product lured me from my former HC services sales job. I soon realized it was too good to be true. Management has their heads in the sand on where industry pricing has gone and can’t compete unless they change. The main issue is the pricing terms management forced us to sell are way off market. Here’s how the typical sales call would go with the head of a prospective customer’s HR/ benefits department… Potential buyer: Sounds like an interesting concept, what is the cost? Me: There is a monthly fee per employee plus $40 per consult. Potential buyer: Ok but most our employees don’t go to the hospital every year so it may be hard for us to justify committing to a fixed monthly fee regardless of usage. I see there are other providers that offer the service with only a charge per consult. Me: We provide unparalleled support which drives usage and saves your company more money. Potential buyer: Just doing some back of the envelope math here, we’d need to have pretty high utilization rates to cover all the fixed monthly fees. What does Teladoc do differently? Me: We are pioneers in this field and the oldest provider. Potential buyer: But earlier you said you’re a tech company, isn’t having old technology a bad thing? Me: We have the most proven product with the largest number of users. Potential buyer: Not to be flippant but AOL once had the biggest user base and charged a fee. Look we have to get two bids for any new product or service we buy. I just don’t think I can get our CFO to ok Teladoc when I have to show him your service and price side-by-side one of your competitors. I was previously a top producer at 5 prior HC services companies, guess how many Fortune 500 customers I signed up Teladoc? Zero! After repeated meeting outcomes like that one I went back to management to explain to the situation. Their response was to hold the pricing policy even if the industry had change. This made it impossible to compete. As anyone in sales knows, the higher the margin of the product you sell, the more you can get paid. This wasn’t the case at Teladoc. Based on the commission rates and salary of our sales team I assumed our product generated high margins. I soon found out this was not the case and that management was desperately spending money not to grow the monthly fee business but to keep existing customers from leaving. Management’s logic was if we stop pushing our monthly fee terms to prospective customers then our existing customers will demand the same. Guess what? All our money came from monthly fees, not the super low margin telephone consult charges. I’d also point out that the flu is the biggest driver of telemed usage. The benign flu season this year will definitely be a near-term headwind that new sales people should consider.
Cons
I never usually post online reviews but felt I should lay out the facts after seeing all these misleading posts that were quite obviously written by Teladoc’s HR dept. I am hopeful this information prevents others from making the same mistake I did.
