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Is Your Sales Model Keeping Up With The Pace Of Change?

Sep 24, 2015 2:33:33 PM

You’d be hard pressed to identify an industry right now undergoing as much change as medical device manufacturing. For example, just about every day, you see articles about amazing new applications for 3D printing (like new ribs for cancer patients, or a flexible new arm, or fully functional blood vessels).

There’s also an aging population creating increased demand for devices like implants and prosthetics as well as devices for chronic illnesses like diabetes, heart disease, and COPD. Genetic research is taking off and new diagnostic tools are being developed.

Health Decisions outlines 10 trends impacting the product development in 2015, but there are many others. It’s an exciting time with lots of opportunity for innovation. This is definitely the age of disruption. Today’s set of market leaders will not be the same market leaders five years from now.

Medical device manufacturers are faced with several industry challenges when looking to grow their business in a fast-paced, ever-changing market like this. Tom Williams wrote a blog post recently describing five challenges facing the medical device industry:

  1. Hospital mega-mergers
  2. Integrated health systems and care models
  3. Medical manufacturers sharing the risk with hospitals for poor product performance
  4. Bundling of payments
  5. The rep-less sales model

This last challenge is something that I’ve encountered multiple times recently in my discussions with leading medical device manufacturers. Customers are demanding that manufacturers sell and provide services to them in new ways. They are struggling to meet these needs and provide value that differentiates them from their competitors.

Very few people outside of the operating room realize that “medical device sales reps�? do more than sales – they’re actually inside the OR to offer support to the surgical team. This service is bundled into the cost of the device, which is why a hunk of metal and plastic (no matter how technically amazing) costs more than you’d think.

In an intensely competitive market, with several savvy competitors and external pressures, more and more businesses find themselves competing on the basis of their customer experience. This can feel a bit uncomfortable for manufacturers who have traditionally focused so heavily on features, benefits, quality, metrics, and outcomes.

Companies today have to constantly ensure that their sales reps are providing value to the customer. If they don’t, then instead of building competitive advantage, they’re losing ground to competitors. They’re getting eaten by innovators.

No longer can reps just be “order takers.�? They have to be consultants and often even strategic partners of a practice. And it isn’t just about providing value to the surgeon. As payments are bundled, value must be realized throughout the entire procurement chain.

Williams said it well: "Savvy, forward thinking manufacturers and suppliers will always weather these changes with aplomb as long as they are proactive and stay ahead of the storm. They must continue to be diligent in the realization that changes are inevitable and it’s incumbent to have a strategy in place in order to mitigate the issues. Change is neither good nor bad. It is how the organization responds to the challenge that determines success or failure.�?

With a quickly changing, innovative industry, the demand for training and support for new products will rise while the inclination to pay for these products is decreasing. For example, 3D printing shows great promise, but assessing the appropriateness and safety for each patient’s unique device will undoubtedly have a learning curve and increase the clinical support needed.

In the past, the sales strategy of medical device manufacturers consisted primarily of the decision to go with an in-house sales force, contract with an independent sales force, or use a combination. Now strategy becomes much more complex. How should they package product vs. services? Can other models be considered? And if a rep-less model is demanded, how can they meet other customer needs?

Transitioning to a rep-less model may be a growing trend, but there are lots of opportunities to differentiate yourself based on value within your existing sales strategy model. While preparing for a transformational change such as that, organizations can start tackling “lower hanging fruit�? to fortify their competitive advantage.

I’d recommend starting by making sure your marketing and sales teams are rallied around a common understanding of customer needs.

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Organizations need to align around a deep understanding of how customers make choices within their competitive market. This may sound obvious, but it’s actually not common.

The stark reality in today’s market is that you can’t take your eye off customer needs for a minute or a new market entrant will swoop in and steal your market share. If you don’t know the drivers of your customers’ choices, you’re vulnerable.

To accomplish this, you need to develop a deep understanding of the customer experience along their entire journey. Why do they choose you? What impacts their decision? And how do they perceive you vs. the competition? Why do other customers choose your competition?

These insights compound to create one singular truth about the customer. Without this, your marketing team is moving one direction while your sales team is moving another. Your marketing materials say one thing, and your sales process says another. You’re working against each other, when really you need to be working together against your competition.

As a former sales rep, I heard many times (and probably said myself a few), “What the heck is marketing thinking with these materials?�? Equally as frustrating for marketers is to have a sales force that does not recognize and appropriately articulate your offerings’ value prop.

It’s very common to have variations in understanding of client needs and perceptions even within the sales department - by region, tenure, etc. And while there will always be some variation, the question is can you reduce the deviation? And can you make the average understanding more accurate?

I think you can, because I’ve seen it happen in multiple manufacturing companies.

How? First, you have to take stock. You need to measure what your sales force, marketers, and management all believe about the customer’s needs and perceptions of the competition. Next, you need to compare this to actual customer insights. Finally, you build a bridge between the two.

Recently, the CMO Council conducted a survey of marketers, and only 7% strongly believed that their company had a unified understanding of their customer.

How confident are you that your sales and marketing are aligned? And if you’re not 100% confident, what do you plan to do about it? Because in the crazy world of medical device manufacturing these days, the most nimble and adaptive company will win the customer’s choice.

Topics: General

Vennli
Written by Vennli

Vennli is the content intelligence platform that empowers marketing leaders to increase the effectiveness of content marketing for each persona across every stage of the buyer’s journey - from awareness to advocacy. The smart content planning tool combines customer data and artificial intelligence, including insights about what matters most to the target market, to make intelligent content, messaging, and communication recommendations that will attract, convert, and retain more customers.

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