There’s no escaping the reality that MedTech sales are getting harder in the new era of value-based healthcare. Hospitals and their health system parents are getting squeezed financially. The same reality applies to larger medical groups, ACOs, and just about any other healthcare provider business model.
As the pressure is increasing for the healthcare industry to make more careful purchases, mergers and rollups that are increasing the size of IDNs are giving these larger organizations more negotiating leverage, and not just with payers.
This means that MedTech companies also feel the financial pressure. Price sensitivity (always an issue) is more acute than ever, and value-for-price considerations are a major focus for the customers of MedTech companies in their evaluation of medical technology purchases. Further, product life cycles in the MedTech market are longer, and differentiation between competitive products is more difficult and less driven by features of the technology. Decisions to purchase refurbished equipment are increasingly driven by price considerations and what is “good enough” rather than best in class.
In this challenging business environment, how can a medical technology company scale its sales model to help increase sales system efficiency and hit company sales targets?
Present Value in Pricing
There are many creative ways to organize and present pricing to associate a price with its value for the MedTech customer.
Part of the pricing challenge for MedTech companies is that the value proposition for most of their devices has not adapted to the value-based healthcare pricing model that is increasingly the basis for much of related provider reimbursement.
The Boston Consulting Group’s internal think tank, The BCG Henderson Institute, offers a few ideas to handle this challenge and focus on value in pricing:
Access & Leverage Data
MedTech companies can and should access data that is available to them to help produce valuable insights about the challenges, pain points, and referral patterns of their prospective customers and their customers’ competitors.
This data can be gleaned from both public and private sources, including Medicare, Medicaid, worker’s compensation, and private payers. The data can be organized to build targeted lists and intelligently segment the market based on data like utilization of relevant diagnoses and procedure codes across care settings.
Some companies in this niche also offer easily adaptable tools to develop market and referral plans for hospitals and physicians based on a market-by-market basis.
Use of this kind of data can help MedTech companies utilize their time more efficiently, focus their marketing, and create scalable teams and software so each sales team member can be more effective.
Help Customers Produce More Revenue With Your Technology
It’s no longer sufficient for MedTech companies to promote technological and clinical features and benefits of their solutions. MedTech customers increasingly look to such companies for help producing revenue tied directly to the purchase of the company’s solutions.
That doesn’t automatically mean that the customer expects the MedTech salesperson to rep their new purchase to in-network and out-of-network physicians, even though more reps seem to be doing that. Ultimately, that effort is simply an inefficient and ineffective use of the rep’s time and talent, and is definitely not scalable, or even sustainable.
MedTech companies already provide product collateral and marketing “tool kits,” but that is expected and not perceived as an added value by the purchaser.
Instead, MedTech companies will need to package more scalable solutions for their customers in terms of influencing more revenue from the purchase of their products.
Categories of scalable added value solutions for the customer and the MedTech sales team include providing:
This does not mean that MedTech companies now have to directly provide or acquire these capabilities. They will need to develop more strategic partnerships with businesses that provide these solutions for their customers, and then package the added value to the benefit of their salespeople and processes.
However it is accomplished, scaling MedTech sales will ultimately come not from deeper price discounts alone. The value of the MedTech company to its customers will come from increasing the efficiency of their salesperson’s prospecting and sales process and from the ability of the company to present itself to customers as a business solutions provider and not just a medical technology provider.
No matter where your company is in its scaling process, Carevoyance can give your team the data-driven insights they need to speak your prospects’ language and close more deals. Click the button below to empower your sales team with Carevoyance as a data and analytics partner.
About the Author
Carevoyance contributor Lonnie Hirsch is the Founder and CEO of Hirsch Healthcare Consulting, one of the premier consultants and strategists for helping medical practices and hospitals across the U.S. and in other countries achieve profitable top line and bottom line growth.