Medical Leaders: Ignite Consistent Revenue GrowthBy: Craig Ackerman Medical Device, Revenue Growth Strategy, Sales Growth
The 2018 fiscal year is off to a great start. Many medical companies expect strong growth in the 5-7 percent range. Once the first quarter concludes, high-performing companies turn their attention to strategic revenue growth planning for 2019 and beyond. Their goal? To sustain growth that is double the industry average. Their strategy? A comprehensive revenue growth plan that considers more than just sales compensation.
Traditionally, many medical companies begin to review their sales compensation plans midyear. But compensation is only part of the planning puzzle. A successful revenue growth model includes a thorough review of a company’s segmentation models, revenue motions, customer-facing jobs, resource deployment, talent programs and sales compensation.
Effective annual revenue growth planning is a necessity. Medical companies are in a continuous state of change. The biggest source of change is market-driven from health care systems, hospitals and physicians. These key constituents have evolving expectations from suppliers. Changing expectations along with the continuous introduction of new products puts significant pressure on existing revenue growth models.
All medical companies should reevaluate their revenue growth models annually. These reviews are both healthy and needed: in some cases, the review process will reveal extensive changes; in other cases, the changes will help ignite growth.
As you put pen to paper and start your planning process, use the following checklist to guide you:
- Establish a revenue growth planning team. This team should include the following functions: sales management, franchise owners, marketing, finance, human resources and sales operations.
- Confirm next year’s sales strategy. Identify changes to the corporate strategy including significant product launches, potential acquisitions and new clinician call points.
- Assess the current state against strategic intentions. Inventory current programs and practices to determine if alignment exists with strategic intentions. Utilize Alexander Group’s Revenue Growth Model™ as a guide. The evaluation should include segmentation, revenue motions, organizational design, talent and sales compensation. This evaluation will yield the focus areas for change.
- Update revenue growth model. Work with the planning team to identify options for change, and select the most appropriate changes for the organization. In some cases, the change is too large for a given year and will require a multiyear roadmap.
- Communicate changes. Develop a full communication program, including manager training, participant presentations and coaching tools for supervisors. Highlight why change is needed and how everyone in the organization will benefit.