Medical device leaders are expected to deliver growth in an increasingly complex and rapidly changing sales environment.
There has been more change in the last five years than the last 30, and there is more pressure for quality outcomes.
Selling criteria has changed as hospitals consolidate, products become more commoditized and regulations become stricter. To grow, medical technology companies must take decisive actions to challenge yesterday’s legacy sales models with an improved mix of selling resources and aligned programs for better account management and sales coverage.
Alexander Group’s medical device practice increases the odds of success for medical product and technology companies. Our research shows key trends that are prevalent in today’s environment.
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Need To Grow and Maintain Margins
Growth is constrained due to provider spending restrictions and increased competitor parity. Companies are trying to reinvigorate growth and maintain margins.
In the industry as a whole, margins are dropping and device companies are being forced to defend prices. Power has shifted from physician to hospital purchasing committees and IDNs. Vendor revenue and gross margin growth are constrained by customer spending restrictions and increased competition. Quota attainment and total actual pay are down, yet fewer salespeople are leaving their jobs.
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Need To Do More With Less
Across the board, medical device companies are reducing sales expenses as a percentage of revenue. By flattening and reducing sales and support headcount and pay, costs are going down – sometimes at the expense of growth.
As a result of cost pressures, companies have reduced headcount and pay less in compensation. This has resulted in lower sales cost/resource and expense/revenue ratios. This is driven largely by lower actual pay, lower T&E expenses, more junior reps and clinical specialists and flatter organizations. The challenge comes if you reduce cost, but are not able to grow revenue.
Sales Motions Need To Change To Meet Today’s Needs
Medical products companies are investing more in Junior Reps and Clinical Specialists as they learn how to better integrate new customer-facing roles into their ongoing revenue model.
At one time the medical sales rep was the top of the food chain. They had relationships with doctors – golfing and buying tickets to big games. That was when doctors were the buyers. What has changed? Products are more commoditized and regulations are stricter. It now makes sense to hire lots of lower cost reps, pay them less and let them do more routine things with hospitals. Thirty-five percent of medical product sales forces now have junior reps and clinical specialists in the mix, and seventy percent of respondents in a recent industry study note this issue as critical over the next three years.
How We Help Medical Device Companies
Every Alexander Group client engagement benefits from our field tested tools, methodology and processes. Our core consulting methodology is built around the proven Revenue Growth Model™ to help customers build smart roadmaps and realize potential quickly and efficiently.
Practical Approach – Unlike the big strategy firms who work at the board level and have limited practical experience in the go-to-customer world, we bring practical and tactical frameworks and experience.
Broad Perspective – And unlike the managed service consultants who push analytics and a quant-based approach to territory optimization as an answer to everything, we have a broad perspective to help connect the dots and align resources across your sales, marketing and service functions.
This broad perspective is imperative in the medical device industry right now. Many firms are being forced to completely transform their customer facing organizations to meet rapidly changing needs driven by an increased focus on outcomes, continually changing regulations and new rules of engagement with new and different buyers.
Data Informed Decisions – Alexander Group will define your TRUE growth opportunity. Unlike theoretical big-picture market growth numbers, the goals and objectives we help you set are derived from real market data on your addressable marketplace. We build out detailed plans with implementation programs and tactics that make your revenue growth strategy actionable across your portfolio.
Why Alexander Group?
Industry Experience – Our experienced Medical Device practice team is grounded in the increasingly complex healthcare universe, bringing a broad perspective that helps our clients move from feature/benefit to outcomes based solutions. We know how to modernize and professionalize a sales and marketing organization, and what works as you move away from point selling of products to become a strategic partner to your buyers, not just another vendor.
Customized Approach – Our collaborative and customized approach will align marketing, sales and service to deploy resources to rapidly changing customer segments – getting real with territory assignment, skills, rules of engagement and revenue motions that are most appropriate for your business.
Contemporary Expertise – Alexander Group customers benefit from cutting-edge expertise, not canned solutions. We believe in leveraging technology to help with execution, but ensure that you can course correct without being tied to a single technology solution. We keep our finger on the pulse of what’s working today in your marketplace, and our contemporary benchmarks keep you up to speed on medical device industry market trends and best practices from other industries. Our customized solutions ensure that you are getting practical and tactical advice to implement the right go-to-customer approach for each unique segment of buyer. And we’ll work with you all the way through tactical execution at the field level.
Our commitment to concrete results on every client engagement will help you unlock maximum revenue growth. Now.
To learn more from Alexander Group’s Medical Device experts, contact us today.