Ten years ago, having a sales force effectiveness center of excellence was unique in the medtech industry but is now a cornerstone of every high-performing organization. Now, marketing excellence is the next great differentiator for medtech commercial operations.
In recent years, a few industry trends have highlighted medtech’s lack of marketing excellence, including fewer successful product launches; the shrinking of pure product innovation; the changing treatment continuum to push costs outside of the hospital and into the community; and the need to construct value propositions beyond mere product features.
In the last six months, I’ve worked on a number of projects focused on improving the effectiveness and efficiency of commercial organizations. Given the medtech industry’s immediate need for top-line growth and bottom-line cost reduction, the focus on these types of projects is significant. And with the investments that most medtech companies have in the commercial organization, specifically in the sales force, the impact can also be substantial.
ZS recently helped one medtech company reorganize the sales team that serves its wound care business unit. Specifically, we adapted the sales team to better align to the customer value across the multiple channels in which the product could be used (such as hospitals, nursing homes, patient homes, etc.). As is often the case, this project was sponsored and led by the organization’s commercial excellence leadership team, and it depended on significant input and strategic direction from the marketing team to be successful.
Specifically, the wound care company needed the marketing team to identify how patients moved through the market, where key decisions were being made and, ultimately, the resulting value of each marketing channel. The marketing team struggled to produce the required inputs and strategic direction to help the sales force make fact-based decisions. This required the sales organization—and, by proxy, ZS—to fill in knowledge gaps using hypotheses and assumptions. While taking that approach helped us reach an answer, was it the most optimal approach? And in a world that enables us to gather and analyze robust insights about our customers and markets, was it an appropriate approach?
I wish I could say that this recent experience was unique, but I see the same challenges over and over again in my medtech work. Fundamentally, companies lack the core marketing capability to leverage the market, competitor and customer insights that drive business decisions.
Why does medtech lack this core marketing proficiency? I believe it’s due to three key historic reasons:
- A complex selling environment that puts the focus on field investment. With such a high level of service and support associated with many of medtech’s products, sales force investments far exceed that of other industries. For example, the wound care company spent 60 to 70% of its SG&A budget on maintaining a certain field force headcount, thereby depleting funds that could be used to support other critical functions such as marketing.
- A history of product-centric innovation that has de-emphasized marketing innovation. Historically, medtech has sold products based on its features and benefits, not on its value and benefits. There’s little need for marketing input when all you need to do to successfully sell a product is discuss the amount of silver in a wound dressing.
- Little heritage in classical marketing has meant that examples of excellence are more difficult to find. A common practice for many medtech companies is to fill an in-house marketing role with a high-performing sales representative. While this may be great from a personal development standpoint, it has hindered the ability to integrate true marketing talent into the organization. In the wound care company’s case, five of the six marketers that served on our core engagement team had come from the sales force.
What can the industry do about it? It starts with a recognition that sales isn't the only lever that organizations should be pulling to improve top-line growth and bottom-line cost-reduction figures. Marketing teams have a significant role to play—perhaps more significant in today’s medtech landscape than in the past. To develop a true marketing capability, medtech companies need to establish a robust and systematic approach capable of leveraging customer and market insights and contributing to future business decisions.
In a follow-up blog post, I’ll share a few specific examples of how medtech organizations have retooled their approaches and differentiated their marketing capabilities.