This is the second part of the article. Should you find out more about the five types of solutions offers that could innovate the medtech sector, please click here.
By definition every solution, regardless of its design, targets a specific customer challenge. The key to configuring effective solutions is to understand the customer’s needs, but majority of medtech companies find this as a main obstacle.
Moreover, to develop a solid solution, it is important to identify which internal and external factors will shape the solution’s configuration and to what extent. This requires a thorough analysis to nail down the specific factors that need to be considered. Key questions to answer among others are:
- What is the customer’s challenge?
- How open is the market for a solution (i.e. mind-set)?
- How able is the customer to accept a solution approach?
- What is the level of ownership?
- How could the solution be monetised?
- Are there items within the existing portfolio that could contribute to a solution?
- What are the internal capabilities for selling solutions (e.g. sales force)?
- Which resources are available for developing and commercialising solutions?
- Is there any infrastructure (e.g. IT) that could support solution implementation?
Solution offering diamonds in the medtech sector
More and more medtech companies are introducing solutions to the market. Besides the operator model with the well-known example of full cath lab management, there are various facets of solution offering tailored to the individual company and customer setting. Below, we present two companies that have had considerable success in implementing this framework.
Case 1: A leading supplier of fertilisation products developed a solution to increase the effectiveness of its pharmaceuticals. In addition to its drugs, the supplier launched lab technologies and introduced Standard Operating Procedures for labs to ensure process quality. Through this measure, the company was able to increase revenue by 3.7% despite the market contracting by 7% at the time. Selling solutions helps evade market pressures.
Case 2: A supplier to homecare providers was facing price erosion due to commoditisation of its products. The company introduced a web-based logistics solution to optimise the management of patients with incontinence. This web-interface helped to develop patient care plans, anticipate product demand, and automate order processes. As the supplier’s order processing only involves its own products, the web-based solution helped boost its sales. By pricing per patient irrespective of actual product usage, the solution involved risk-sharing between the company and its customers. With consumption statistics per patient, the supplier demonstrated cost reduction of up to 30% for homecare providers, making it stand out as a clear solution offering success.
The solution commercialisation framework
To facilitate the commercialisation of solutions, while also laying the foundation for the continuous optimisation of solution configurations, we have identified a five-step framework.
- Identify: Understand customer needs and segment accounts and stakeholders benefiting the most from the solution. Target prioritized customers with solution configuration.
- Connect: Determine most relevant value drivers for customer stakeholders. Apply individual approach to effectively engage with most influential stakeholders.
- Sensitize: Generate customer awareness of the challenge addressed by the solution. Position as expert who can deal holistically with the customers’ specific needs.
- Offer: Use evidence-based value argumentation to place the solution within the individual context of the customer. Set direction for value-based pricing and contracting to close the deal.
- Partner: Establish continuous impact monitoring to create awareness of the added clinical and economic value of the solution. Ensure successful implementation and long-term impact delivery of the solution via coaching.
Opening doors to lasting partnerships
Innovative solution offers are providing a unique opportunity for medtech suppliers to distinguish from competition and deflect growing market pressures. These holistic solutions allows for increased customer efficiency enabling them to excel despite high budget pressures. As the latter will certainly be a common theme in the future, medtech companies will be required to offer even more added value beyond pure products and services.
By fostering a better understanding of these specific customer requirements, full customer solutions reveal their true beauty: Medtech companies can take full advantage of untapped value pools while securing customer lock-in through solid long-term partnerships.
 Simon-Kucher’s Medtech barometer 2017 (http://www.simon-kucher.com/en-gb/resources/research-papers/medtech-barometer-2017)