By Amy Siegel & Tim Kofol, S2N Health
Historically, marketing has been the Rodney Dangerfield of med tech. We marketing people don’t get much respect. Sure, we wear dark suits at the booth and talk to customers, but the med tech Sales & Marketing equation has generally been big “S” plus little “m” (or as one sales executive we know put it, marketing is just sales overhead). Enter the last decade and the virtual collapse of the traditional med tech sales model; gone are the days when reps can leverage chummy relationships with physicians to brute-force expensive new medical devices into the hospital.
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An autopsy would reveal many causes of death, but to name a few:
- Hospitals have given financial decision makers more muscle in purchasing decisions, e.g. value-analysis committees are actually doing value analysis
- Doctors are increasingly employed by hospitals (though surgical sub-specialties are bucking this trend) and more beholden to hospital priorities
- Increased regulation of sales interactions and hospital control on rep access have made direct selling to physicians much more difficult
This is where marketing enters the scene. Success, or even survival, in the face of all these challenges requires clever, proactive and well-executed marketing efforts, with sales as the icing on top. Big “M”, littler “s”. Highest on marketing’s current agenda are:
1. Launching the right product with the right data. The marketing imperative starts during product development, making sure that the R&D folks are creating stuff that future customers actually want / need, and doing so at COGS that leave room for some profit at market-driven ASPs. With the bar on clinical evidence continuously being raised by penny-conscious customers, the marketing voice is also critical to align study designs and endpoints with purchaser and payer requirements. Unfortunately many R&D and clinical teams take a similar view of marketing as their compatriots of sales, but this is slowly changing.
2. Offering a solution, not just a product. A great technology developed with lots of customer input is a necessary but insufficient condition for driving adoption in the current constrained healthcare environment. Device companies have to solve real problems for their customers, who are generally happy to maintain the status quo that existed before the appearance of your new gizmo. One way to become a total solution provider, and capture more value, is to combine device offerings with related services. Medtronic’s acquisition of Cardiocom for $200M is a notable move in this direction (a trend S2N predicted last year). No doubt marketing will play a vital role in coupling Cardiocom’s telehealth and chronic disease management offerings with Medtronics’ vast portfolio of devices to defend and grow share, maintain premium pricing, and create competitive barriers to entry.
3. Redefining the customer. Med tech companies need to take a more expansive view of the sales targets to include new purchase decision influencers, for example the consumers of healthcare. Americans now pick up the tab for about 13% of the US healthcare tab, spending >$400B per year out of pocket. This is a customer group that med tech sales forces rarely if ever touch, and therefore lands squarely in the domain of marketing. How patients feel about their healthcare experience is also mattering more to hospitals. The CMS Value-Based Purchasing Program is tying incentive payments to hospitals performance on the dimension of patient experience, and medical device companies are well positioned to help hospitals measure up against these metrics by engaging and “delighting” patients with their device-based care.
Consumers are also starting to take a bigger role in their own health, shelling out significant cash for health trackers like Fitbit, Nike+, Withings and other wearable technologies. These “toys” are migrating to more serious medical applications, creating a gray area that offers growth opportunities for device companies. The marketeers at Alivecor, for example, are putting home EKG monitoring in the hands of patients; we recently heard of one doctor recommending the self-pay device to patients because it’s cheaper than copays and deductibles on traditional heart monitoring. Hopefully orthopedics companies are putting their marketing teams to work on exploiting the synergies between activity trackers and new hip implants to improve or demonstrate better outcomes.
In the old med tech model, Marketing got pulled in when Sales ran into trouble (usually when it was too late to do anything productive). One could say that Sales is now in a permanent bind, and Marketing needs to take the helm for a while. Just someone please tell me where I can find some good med tech marketing people…