3x Average Sales Growth? It’s a Reality at Medical Device CompaniesBy: Craig Ackerman Medical Device, Revenue Growth Strategy
Significant gross margin pressures have forced medical device companies to rethink their existing commercial models. Sales organizations are increasing revenue growth and investment, especially in their solutions and product portfolios. Those companies that embrace innovative commercial models can produce sales growth that is 3X the industry average and commercial investment levels well above average*. Central to this kind of success is an agile go-to-customer model.
Financial objectives and market forces continue to place downward pressure on expense-to-revenue ratios, a trend that shows no sign of relenting with margins expected to continue dropping by 100 basis points per year*. In this environment, companies must find resourceful ways to maximize “feet on the street” while at the same time deploy highly technical sellers to launch their new products all in a more budget-constrained world than ever before.
In response, companies are deploying agile go-to-customer models that intelligently specialize and deploy the right job roles at the right resource levels in the right places. These new go-to-customer models decrease emphasis on the traditional field representative and increase emphasis on a team environment and solution selling. Elements of these new models include:
- Developing complex team environments to execute solution sales
- Investing in overlay specialists in greater numbers
- Increasing investment in enablement programs
- Expanding junior representatives and clinical specialist headcounts
The fastest growing medical device companies have moved beyond the traditional sales representative and invested significantly in new models. Those embracing new commercial models produce growth that is 3x the industry average. The increased growth rate creates a virtual cycle that also allows for above-industry commercial investment levels.
As you plan your go-to-customer models, utilize the following planning and implementation framework:
*according to recent Alexander Group research
Contact a Medical Device practice leader to discuss applying this framework and evolving your go-to-customer investments to drive above-average revenue growth.