This is the first in a two-part series on insights from ZS’s panel discussion at AdvaMed.
Amid an increasingly complex healthcare landscape and savvier, more budget-conscious consumers, medtech companies need marketing now more than ever. A strong marketing function can help companies not only demonstrate value but also drive R&D and product development, sharing customer and marketplace insights to help their firms develop products that truly meet customer needs.
At AdvaMed’s 2019 MedTech Conference, held Sept. 23-25 in Boston, ZS principal Matt Singer moderated a panel of four industry leaders to discuss the value of an empowered marketing team and why product innovation needs to be driven by insights. The panel featured George Parr, chief marketing officer at BD; Rob Clark, chief communications officer for Medtronic; Randy Pritchard, senior vice president of marketing for U.S. diagnostics at Roche; and Rajit Kamal, global franchise leader for Johnson & Johnson’s knee replacement business.
George Parr: Marketing in this industry has been more focused on either communications or sales support, but in other industries it’s a core competency, competitive advantage and strategic growth driver. High-performing marketing capabilities are crucial to navigating customer consolidation, increased competition, intensifying commoditization and increased cost pressure.
Rob Clark: I couldn’t agree more. Marketing entities have typically been sales support, product management, product marketing and so forth, but now there are the factors that George mentioned plus digitization and the ability to communicate with audiences in different channels. Do we have the right people with the right capabilities, tool sets and channel integration to make the most impact and to target marketing most directly at those involved in the buying process?
Randy Pritchard: As you look at different buying decision drivers and a good marketing organization’s ability to use market feedback in R&D and elsewhere, what are the economics? Do you have a viable business model for payers at the launch of new products? It’s no longer small clinical differentiation that starts the conversation. If you don’t come to market with a full plan and the data to go in and have the dialogue, you’re not going to be successful.
Rajit Kamal: Historically, innovation in the orthopedics industry was driven by insights from a few mainly U.S.-based surgeons. That needs to change. We need to get insights from surgeons of different experience levels, from academic and community centers and globally, since the products we innovate are for the global market. Who are the right set of customers who will provide insights that move the needle? That is where I think marketing has a very important role to play, which didn’t happen 10 years back. You could launch an incremental innovation, get 10% premium, and nobody cared. We are not in that environment anymore.
RC: Our audience base is changing dramatically. It’s not solely the physician anymore. There are many more influencers within the buying journey. We now have a multitude of channels and mechanisms by which we can deliver a message, and that’s become more central to our strategy.
RK: I completely agree. If you think about the orthopedics space, we are going through so much transformation. Patients are becoming more relevant and we need to engage with them. It’s a very different skill set that was not required 10 years back. The value proposition is not just about clinical; it’s about patient experience and economic benefits. The role of marketing is fundamentally to understand customer insights and unmet needs, and be able to articulate that internally and to the market.
GP: The role for marketing in medtech is an evolving one. How the company thinks about customer outcomes is fundamental to the growth strategy for the company going forward. Everybody should understand, regardless of where they sit in the matrix, what role they provide in delivering that outcome and the idea of getting the company as a whole closer to the customer.
RP: You see the customer universe changing dramatically, not just in who you talk to but within the ecosystem that they operate. It’s a massive change going on in healthcare. You need someone in the organization to center the customer and help the organization understand where to evolve before you even start thinking about channels. There’s no one in a better position than marketing to do that.
RC: There’s a ton of opportunity. What we’re trying to do, from a marketing engine perspective, is get more real-time data and understanding of the customer. We have some legacy systems that may not all be connected to show you exactly what you want to see about a customer. We’ve been tackling those issues because the upside is bringing insight about our customers directly to our sales force about the dynamics of their buying process and their view of the product, service or things that we wrap around that product. We should be getting the voice of the customer on a more real-time basis and translating that for R&D. We’re doing it haphazardly today. We’d like to see that more automated and part of our DNA as a marketing organization.
RK: We think about products that can improve clinical outcomes and also look at impact on cost. That equation is a critical part of how we innovate. The second thing is that our offerings are going beyond physical products. We are looking at apps and software services and developing machine learning to engage patients. The bundle of products we have is not just implants. We are thinking beyond and trying to incorporate all these insights.
GP: Innovation in new product development is a tremendous area of opportunity, but the collaboration between R&D and marketing, or between sales and marketing, isn’t what it needs to be. Do you have sophisticated, scientific insights driving your innovation and new product development efforts? Are you relying disproportionately on the collective experience of product development teams who have been working with those disease states, science and technology for a lifetime? The markets have changed dramatically. Do they have the facts to make good strategic decisions about organic or inorganic opportunities? You need marketers on the team who understand the challenge or opportunity relative to strategic innovation.
RP: The communication channels are where marketing’s role is so critical because we touch more different and varied stakeholders than any other single department. We’ve invested a lot in building networks internally to make sure there’s a consistent dialogue back and forth and that you’re pulling customer insights into the product. We’ve built customer milestones within all of our development programs that have to be signed off by the affiliate marketing teams before things move forward. It’s still a work in progress because that’s just one step along the way.
RC: The friction is that our markets and customers are changing faster than the regulatory cycle for pushing these products out. A lot of the R&D is a bit more traditional. Upstream marketers work with R&D to design features as they’re moving through the process. By the time these products get to market, however, the market can fundamentally change, and I think there’s a role for marketing to play in that because if you’re delivering the right insights at the right time in that process, you can make these adjustments on the fly. We’re working on how to bring that insight to bear, to change up an approach or strategy midstream.
RP: That’s critical. In medtech, we’re always talking about blowing up structure and becoming really agile. It’s an ongoing internal dialogue: Are we fast enough to keep up with the market?
RP: In a company of our size, you can love something to death very quickly. You find all the reasons why something new and innovative won’t work or why it’s challenging to the current business model, so we’ve actually taken several [products] and intentionally firewalled them off from the rest of the core business. Then it’s about leveraging relationships but having a separate sales organization to keep the larger company from crushing the innovation.
RK: Technology in our case is not a disruptor; it’s an enabler for the core business. Robotics and digital are going to help us sell more implants. The challenge is that if you miss a quarter and have to cut some dollars, do you cut from your core or from digital? You sometimes lose here because you have to keep the machine going, but we have to be more disciplined because you don’t want to mortgage your future.
GP: It’s always a risk for companies the size of ours—investing enough that you don’t run into competitive obsolescence and get blindsided. We want to make sure that, at the core, our fundamentals continue to evolve with shifting buying practices. In those categories where we have competitive advantage, we want to stay on top of these so that the way those outcomes are being delivered is not changing in a way that would fundamentally disrupt us.
RK: I think it’s just a cultural change, right? I think everybody sees the writing on the wall. The industry’s evolving. You need to have better insights. Your customers are changing. The speed at which we need to change is a big barrier.
RC: The culture piece is massive and so is [the people piece]. We’ll have a completely different marketer in this industry in five to 10 years. How people change is not simple. It’s going to be a mix of people coming into this space as well as getting our people into a different mindset and approach.
GP: Marketing needs to be approached differently, and having a practical view of that is going to take time. That doesn’t happen overnight. All companies that are embarking on the journey have to be patient. If this is going to be successful, you also have to have marketers who can talk about it in terms of business impact, customer outcome and patient benefit. That’s going to drive transformation and change.
Be sure to read the second part in this series, in which the panelists discuss how marketing organizations need to evolve to respond to market changes.