Ignite Selling has worked with a lot of medical device manufacturers over the past 10 to 15 years, and one of the common refrains we hear from their sales people is the fact that their market space is intensively competitive. It’s increasingly competitive today, and there are three trends that we want to highlight.
First, the FDA has been aggressively approving new devices. Since 2016, the FDA has approved nearly 300 new devices. This trend of increasing approval by the FDA has been happening for the past 10 years. We expect that trend to continue. Our customers, the medical device manufacturers of today, are going to continue to face new products entering the market space.
The next challenge that’s a big deal for our customers has to do with M&A. M&A’s in the healthcare space continue to happen at a brisk pace. In 2017, nearly 3,100 deals were done worth nearly $332 billion dollars. Now this is a global number, but global healthcare M&A deals have been consistently high and increasing over the past four to five years. What does that mean for our customers? Their competitors are not the small players. They’re the big players. The big players are buying up smaller companies. When new technologies come to market, they’re coming to market with more dollars in sales people, more marketing resources behind them, and more money being poured into R&D than ever before. These M&A’s make life very challenging for our customers.
Another trend we’re seeing, and this is really not a trend so much as it’s been a happenstance over the past many, many, many years, is hospitals are under pressure to contain costs. Revenues are growing for hospitals around 6%, but so are costs. Costs are growing in wages and salaries at about the same number. Total expenses are around the same number. The big area of difficulty for our customers and their customers is that medical device spend at the hospital level is growing at a rate of about 15% a year. That means hospitals under pressure to contain costs are looking at those expenditures and trying to figure out, “How can we not spend so much on medical devices?” Hospitals are looking to consolidate the number of suppliers in the market space – a rationalizing of these suppliers by eliminating unnecessary suppliers and minimizing the number of skews that they have on their shelves to do what they can to gain greater bargaining power and better economies of scale. It’s all about trying to contain those costs, and they want to play with fewer players so they can actually have better negotiating power.
Now combine these three things – record FDA device approvals, brisk M&A in the market space meaning rapid product innovation with bigger, stronger players who are new competitive threats, and hospitals that are trying to rationalize and minimize the number of suppliers that they work with – and you get some serious potential market disruption. That means lots of intense competition in the medical device world.
So what do you do when you’re facing new competitive threats?
Our customers are living that nightmare today. They’re asking us, “How do we go out to the marketplace and capture as much new business as we can before those competitive products come into the market space?” They’re also telling us, “We have to solidify the accounts this new competitive threat is going to be targeting.” When people come to market with a new competitive threat, they know where they want to go, and our customers need to protect their accounts. With new competition and new technology coming out all the time, there are a lot of buyers out there who want to take a wait and see approach, right? “I don’t want to invest today when I have a new technology that may be available to me in six months or nine months.” So how do our customers create enough value for our advocates to buy today? How do you minimize and neutralize those adversaries that want to wait for the latest and greatest technology? How do you get people to act today and not wait around for this new competitor in the market space? These are the challenges that our customers are tasked with, and they’re reaching out to Ignite Selling to help them. They need to develop good, sound strategies to go after competitive opportunities that they know they have to win. They’re asking us to help them build these strategies, and we’re doing so with three unique strategy tools.
The first one called Situational Snapshot is a tool to help people look at all the buying factors with the account – the competitive landscape, the urgency to act, and the complexity linked to decision makers – and build a strategy to address them.
Second, our Influencer Snapshot tool looks at the advocates and the adversaries that are involved in the decision, and helps figure out a way to maximize the impact of their advocates and minimize the impact that their adversaries are going to have on this particular deal.
Then, probably the most important in this particular space, is the Competitive Snapshot. “How do we match up against the competition? How do we win?”
So these tools can help our customers build a strategy to win the opportunities they view as critical. To build all this stuff is one thing, but to apply it is something entirely different, and that’s where our Competitive Capstone Simulation comes into play. It helps our customers’ sales teams understand the current state of their market space, the new realities they’re going to be facing and competing against, and how they win. It helps them defend their position in accounts. It helps them work on their advocates,, develop strategies, neutralize adversaries, position their solution, and execute with that Competitive Snapshot in mind. This simulation helps them understand and execute in the market space that looks like the one they’re going to be facing.
Those are the ways that Ignite Selling helps our customers deal with a strategy for disruptive competition. We’d love to help you deal with this challenge. If you’re not facing this issue today, congratulations! You’re one of the few medical device companies that’s not in a competitive space. But our guess is that you are in this position today, and if you’re not in it today, you’re going to be in this position in the next six months or nine months. It’s best to be prepared to deal with this challenge before it hits you in the face, rather than afterwards.
We’d love to help you at Ignite Selling! Please reach out to us, and let us tell you a little bit more about our solutions to help deal with the competitive disruption that you’re facing. Thank you very much, and we look forward to hearing from you.