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6 Key Steps to A Winning Medical Devices Commercial Model

Medical Devices companies are singularly positioned on the market, with a slow-growing business model of around 5% YoY. One of the reasons why the industry must focus on identifying the operational levers that matter most is that there is a need to reshape and support how medical devices companies approach strategic customer engagement to stay relevant with regard to the evolving value chain. One of the most critical commercial functions at the core of these changes is that of Key Account Management; both the individual and organisational levels must embrace it as a customer engagement mindset. Read on to learn about the 6 Keys to implementing a successful commercial model for medical device companies.

Among the Key Account pressure points that Medical Devices/MedTech companies are experiencing are some of the following:

  • •  How to balance cost with value?
  • •  Addressing a wider market audience and keeping industry stakeholders of stakeholders in the face of an evolving industry value chain
  • •  Gaining competition advance by staying ahead of it
1. TAILORED GO-TO MARKET STRATEGY

To create a customised go to market strategy, Medical Devices companies must prioritise the right market segments, understand how to succeed in these segments, and tailor their strategy accordingly. A dynamic segmentation strategy is critical because healthcare facilities have significantly different needs than those of a private purchaser, so the segmentation must accommodate the widening customer base.

  • •  Assessment of opportunities in the market should be conducted. This can lead to substantial shifts in focus by geography, customer segment, and product category. To determine how to succeed in each segment, medical device companies must gain a deep and rich understanding of all relevant stakeholders.

 

  • •  Winning in today’s environment requires a compelling value proposition. From institutional stakeholders, hospital procurement, and formulary committees, to group purchasing organizations and regional market-access bodies, the different value propositions must be considered. The combination of using HEOR data, leveraging outcomes-based solutions, and a highly-skilled, strategic sales force will provide a competitive advantage. Once the keys to success are identified, tailor the commercial model accordingly.
2. CLINICAL SELLING

The old “one size fits all” clinical selling model needs to evolve. It’s important to do extensive research and understand the various stakeholders, decision-making powers, and motivations. So, “the starting point […] must be to identify an unmet need of a stakeholder within the healthcare system.” (Henze, et al., Moving digital health forward: Lessons on business building, McKinsey & Company) 

Once there is a greater understanding of what the stakeholders need, companies can target the clinicians who have real influence. It is also a good idea to adjust the amount of clinical selling by type of business procurement. By employing these tactics, Medical Devices companies will see an optimised approach to clinical selling.

3. Key Account Management

Key Account Management (KAM) focuses on building long-term, strategic relationships with mainly large, profitable customers. KAM is particularly well suited to the new MedTech environment where a focus on outcomes and value-added service is prevalent. KAMs must have a high level of business acumen and think strategically, rather than tactically. They must focus on the customers’ needs and offer solutions that align with them.

To determine your key accounts:

•  Develop an offer that differentiates them from the rest of the customer base. Once you’ve decided what is considered a key account, train and appoint your KAMs.

•  Don’t make the mistake of simply moving your best salespeople into Key Account Manager roles. KAM should be about changing the way people work — it is not just a sales technique.

Done correctly, key account management can yield increased sales, reduced costs to support the value delivered, as well as improved clinical outcomes to support the future development of the company.

4. Compelling Value Proposition

Compelling value propositions are essential to combat increasing pressure on prices. In today’s competitive market, one of the ways to leverage value is through marketing. It can help showcase the development of commercial strategies and tactics based on deep market research and reflective customer insights.

  • •  Building a case for the value offered by MedTech products is one of the most critical jobs facing companies today. A change in HCP priorities to health outcomes and added value means that manufacturers should change their approach. This is partly because of the unremitting downward pressure on pricing due to technological advances.

 

  • •  Product centric messages should be replaced with marketing messages that promote the advantages that the latest medical devices products offer. They should highlight the positive outcomes their implementation offers, such as efficiency through reduced cost of care, shorter hospital stays, at home self-monitoring advantages, amongst others.
5. Reimbursment & Pricing

Pricing and reimbursement activities can translate into a competitive advantage for medical device manufacturers. Companies that develop the capabilities to provide evidence of their products’ health-economic benefits, as well as local teams to influence reimbursement decisions, will see a rising ROI.

Beyond key products, companies must create satisfactory prices for their entire suite of product offerings. They must cover the strategic aspects of list-price setting and alternative-pricing arrangements. Local relevancies, in terms of pricing execution, must also be taken into account by the sales force in negotiations with customers or in tender situations.

6. Service as a differentiator

Services can be leveraged as a competitive advantage for medical device companies, as they add value by creating a differentiated value proposition for customers. According to David Walsh’s Article, Medical Devices 2030, “Governments around the world want to pay less for medical devices and see proof of greater value in terms of better patient outcomes” (McKinsey & Company).

Advances in tech of recent years also affected the switching focus from product price to product value, in terms of the overall solution the product provides for long-term patient care in, but especially outside of the hospital setting. This is increasingly more profitable for manufacturers, including the benefit of reduced, cheaper and shorter hospital stays, for example, directing the revenue streams to a new consumer branch: patients. They provide the next new revenue stream in the long run.

MedTech companies are predicted to seek out larger roles to add to their value chain and get closer to stakeholders and now patients as consumers.

Clarity provides B2B consultative account management training for MedTech Field Sales Teams. Would you like to hear more? Reach out to us for a consultation today!

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