Is Your Med Tech Value Proposition Good?

Your value proposition tells “customers” – whether end users, investors, or partners – why they should choose what you offer. Unfortunately, most aren’t very good.

A few years ago, an online research group studied value propositions and offered a $100,000 prize for the best one. 86% of entrants scored poorly.

For med tech companies, it’s so easy to get caught up in the features and the technology and lose sight of the value the product offers. Remember the basic rule: Features=Description. Benefits=Satisfaction.  And satisfaction requires value.

The big picture solution is thinking about value from a customer perspective, and  integrating that thinking into how you operate day-in and day-out. It’s not always easy, but it always pays off.

A good value proposition describes the tangible results (value) customers will get in exchange for their time, money, or involvement. It’s the promise you deliver on.

GOOD: Tangible results, clear benefits, solves specific problems, simple, honest.

BAD: Mostly about you, feature-laden, not measurable, unrealistic, complicated.

At a fundamental level, a good value proposition also answers the simple and tough questions, like: Why should I buy this? Why from you? What’s in  it for me?

Google Adwords changed the nature of internet advertising with their value proposition: “Reach people actively looking for information about your products and services online.” As the leader in low prices and huge selection, Walmart promises “Save money. Live better.”

You’re in the business of saving lives. There’s gotta a powerful value proposition in what you offer.

Think about what matters to your “customers” – whether internal or external: Increase revenues from target hospitals by 15% every year, get your new product to market in half the time, reduce customer churn by 30% within three months, expand sales with at least one-third of your install base, cut nuisance alarms in the general ward by 60%, save $100 per hospital room per day by improving workflow efficiency for clinicians, increase satisfaction ratings for your online educational programs by 25%, and so forth.

Now, choose a product or service you offer.  What’s a value proposition that meets the “good” criteria above, and avoids the bad?

Don’t be hard on yourself or your team if you don’t have one or come up with a strong one. Most companies find it difficult, since they’re so close to their products. Many make significant investments with expert specialists in order to get it right. However you get to it, the ROI from a good value prop is significant. The losses created by a bad one can be devastating.

To walk the talk, here’s our value prop for value props:  We’ll make your value proposition so compelling, that it will measurably increase your business within 90 days of implementation. Guaranteed.

I’d love to see your value propositions- good or bad. Let’s learn and improve together.

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More resources here:

Why Should Hospitals Buy Your Device (10 Words Or Less)??

How to Avoid the Dreaded “Firehose of Features” in New Product Marketing

The Million Dollar Question: What’s Best For Our Customers?

I once gave a talk called “Customer CEO” to a crowd of healthcare executives. I advised every CEO to put a special chair in their meeting room labeled “CUSTOMER” and to consult with that customer persona on every significant business decision.

My premise was this: Always think about what’s best for your customer. What’s best for them will likely be best for you too. Therefore, give your customer voice a seat at the table, literally.

Imagine every time your team was making product or marketing decisions, you asked this: What would be best for our customers?

It’s a simple and very powerful question that too often does not get asked. Sometimes it doesn’t get asked because companies don’t genuinely care. For others, it’s getting so caught up in internal concerns – detailed product specs, managing multiple workflows, social media decisions – that they lose sight of what would best serve their customers.

A simple way to keep your customer front and center is to ensure they have a permanent presence. That they are always seen and heard. That what’s best for them is a critical and explicit factor in your decision-making.

I challenge you to do this experiment for one week.

  1. Set up a customer chair in your office or meeting room and clearly label it “Customer.”
  2. When you are making business decisions, talk to your imaginary customer. Voice its response. Let it ask questions of you and your team.
  3. Give your imaginary customer a vote in your decisions.
  4. Share your results by commenting on this post.

I think you’ll notice how powerful a simple reminder of your customer can be, and how profoundly it can affect your thinking and decision-making.

Motivating Health Behavior Change: Three Dangerous Assumptions To Avoid

Behavior change is becoming more and more important to device manufacturers, health IT companies, pharma, and life science firms, as they expand their offerings into disease prevention. Whether aiming to get people to eat healthier, exercise more, participate in screenings, take meds as prescribed, monitor insulin levels, or conduct self-exams, successfully motivating behavior change isn’t easy.

The good news is that health behavior change has been a major focus in public health for decades, and there are a lot of lessons that health care businesses can apply.

One key lesson is recognizing and correcting the fundamental assumptions that derail most efforts to motivate health behavior change. Here are three of the most pervasive and insidious assumptions.

  1. Assuming people don’t know better: Many companies wrongly assume that the barrier to behavior change is lack of awareness. Therefore the thinking goes, if we just give people logical reasons for why people should change their behaviors, they will see the light and mend their ways. Typically these logical reasons center on reducing risks of morbidity and mortality (does that sound exciting or what!?). The reality is that more often than not, people are already well aware that certain behaviors are bad for them. Ask any smoker or obese person; they recognize their habits are harmful, and they know they should quit smoking or cut calories. Lack of awareness is usually not the problem. Therefore, behavior change campaigns aimed at increasing awareness will always fall short.
  1. Assuming people behave as they believe: Consider your own life. Do your actions consistently reflect your beliefs about what is and is not healthy? Or is there a disconnect? I gave a guest lecture today to a great group of grad students studying public health communication. To make the point that people’s behaviors don’t always match their beliefs – what psychologists call cognitive dissonance – I asked how many regularly sleep 8 hours a night, eat nutritiously, and exercise vigorously. Only a handful of the students raised their hands. While they all believe they should get good sleep, eat well, and work out, very few behave that way. (And these are young people making health promotion/disease prevention their profession. They really know this stuff!). Human nature is such that we don’t always do what we know we should do. We unfortunately have the ability to sustain high levels of belief-behavior inconsistency. Campaigns that are predicated on the idea that people’s health behaviors will align with their beliefs about health usually fail.
  1. Assuming big negatives trump little positives: It seems so obvious. If you sell CPAP devices, you may think: How can people possibly not use their CPAP machine?  They could stop breathing and die in the middle of the night! Similarly, if you work for an insurance company or hospital, you may think: How can people at high risk of heart disease possibly not choose low fat, low salt foods? They could die of a heart attack! Same with medication adherence. Same with breast self-exams. Clearly, stopping breathing or having a heart attack are big negatives. But they are only possibilities. The comfort of sleeping without a face mask and loud machine is a definite. A small positive but a definite one. Likewise, the definite pleasure of a rich dessert can eclipse the possibility of a heart attack. Never underestimate the allure of immediate pleasures.

All these mistaken assumptions are rooted in what I call “us” centered thinking. The solution is to adopt “them” centered thinking. Put your customers in the middle, not yourself. That’s the first step toward successfully motivating health behavior.

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More resources on health behavior change here:

Getting People to Do What You Want: Two Paths to Persuasion

Be Like Vegas!… and 6 Other Tips to Increase Wellness Program Participation

 

The Promise & Challenge of Customer Intimacy for Med Tech Companies

No, it’s not about low lights, mood music or negligees. Customer intimacy is a business philosophy that commits you to deeply connecting with your customers. The deeper you connect, the more you sell.

Fundamentally, there are two main aspects to customer intimacy: One is really understanding what customers want. The other is giving them what they want. And that makes for very loyal and profitable customers.

When you are customer intimate, you focus on specific customers and let go of others. You precisely tailor your offerings to what your customers want and need, and do (almost) whatever it takes to make them happy. That requires really tuning to customer desires, both stated and unstated. And it may mean using big data analytics to make optimal recommendations to customers – like Amazon does with products, Pandora does with songs, and LinkedIn does with business contacts.

As a result, your customers are thinking “How do they know me so well?!” And of course, if you are practicing customer intimacy, you also genuinely care about your customers.

Sounds good, right? Here’s the rub: Most every med tech executive will say they are committed to connecting with their customers. In thought, they are. But in practice, it’s often a different story. Customer intimacy is hard to achieve. It’s a long-term strategy that requires organizational commitment, a relentless “tuning-in” to customer problems and desires, and both responsiveness and creativity to solve those problems and fulfill those desires.

Customer intimacy also challenges and turns traditional revenue goals right-side up. How? Customer intimacy is about maximizing the lifetime value of a customer. It is absolutely not about about lowering prices to hit quarterly or end-of-year numbers. In terms of KPIs, long-term relationships trump short-term profit. This can be a tough sell in solely numbers-driven organizations.

On the other hand, because it is challenging for med tech companies to practice customer intimacy, those that do will: 1) gain a significant competitive advantage in a very tough market, 2) build a barrier to commodization of their products and services, and 3) create a unique and powerful brand promise that can be core to their very identity. And as Zappos, Southwest Airlines, and Nordtrom all attest, bottom line, customer intimacy can be highly lucrative.

The first step is to decide if you have what it takes to be customer intimate over the long run. Consider: Money aside, how deeply do you care about your customers? Do you commit resources to really understand them? How far will you go to satisfy them?

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Resources:

The HBR classic by Michael Treacy & Fred Wiersema: Customer Intimacy and Other Value Disciplines

Interesting Forbes magazine article by business technology expert Joe Weinman on how digital and big data is transforming customer intimacy into “collective intimacy”

Earning Real Customer Loyalty: The Challenge for Med Tech Companies

When it comes to customer loyalty toward med tech companies, the most common story we hear from hospitals and clinicians goes like this:

“The sales reps give us a lot of attention when they want to sell us something. Once we buy, we rarely hear from them or their company. All they care about is making the sale. There is no relationship or partnership. All they are to us is another vendor.”

Turns out that for most med tech manufacturers, their healthcare customers either feel no loyalty, or place their loyalty with the rep. While hospitals and clinicians may have a brand preference, it is quite rare that they feel strong loyalty toward a manufacturer. In fact, surprisingly often, clinicians don’t remember the brand of the devices they use, even those they use day-in and day-out.

What’s causing this absence of loyalty to the companies that make and sell important and often life-saving equipment? I believe there are two factors at play.

  • The business model of many med tech companies puts short-terms sales over long-term relationships. Hitting quarterly numbers (even if it means greatly discounting prices) trumps maximizing the lifetime value for a customer. As a result, downstream marketing does not invest in sustaining long-term customer relationships. That clearly hurts customer loyalty.
  • Many med tech companies still think they’re in the business of selling boxes or software. Really, they’re in the business of improving healthcare. But when their focus is so product-centric, it’s hard to see the need to invest in building strong relationships. This sets up a dynamic in which customers choose between product A or B. The promise of partnering to help hospitals and clinicians provide better care over the long-term isn’t even on the table. This too takes away the opportunity to create customer loyalty.

That said, some reps are so good that they overcome these obstacles and are able to engender extremely strong loyalty from their customers, like in these two stories:

“It was almost midnight and we suddenly had a serious malfunction with our new ventilators. We called Sandy, the manufacturer’s rep, who happened to be 8 months pregnant. She immediately came by and with profuse apologies got us up and running. Then she came back the next day and provided a more permanent fix. When we need new vents, we buy from Sandy. Doesn’t matter what company she’s with. We trust her and whatever she recommends for us.”

“Dan advised us not to buy his company’s newest monitors yet. He said they were still working out some connectivity kinks and to wait until next year. He recommended we buy from his competitor if we really needed new monitors right away. That was a huge trust-builder. We’ll stick with Dan forever!”

These are true examples and the kind of thing we hear occasionally from clinicians when we’re doing research for our med device clients about how to generate customer loyalty. These reps are like gold and should be valued as such. You want these reps to stay committed to your company.

However, to get healthcare customers to be loyal not just to your reps but to your company is a big lift. It requires a long-term investment in what we call customer intimacy. It also requires a different business model and compensation structure. And it requires a cohesive strategy for prioritizing what customers want and need over what your solutions and technologies can do. Finally, it requires you to convincingly demonstrate to your customers how committing to buying from you over the long-term (i.e. loyalty) will measurably improve their situation.

In the always-changing healthcare space, I believe that the few med tech companies courageous and committed enough to fulfill these challenging requirements will be the big winners.

Overcoming the CEO Attitude: “We’re So Good We Don’t Need Marketing!”

I was talking with a friend recently who heads up business development for a small technology development company that specializes in solving really complex engineering problems.

She faces a big and not uncommon challenge: Her leadership team has the unfortunate belief that a) because the company’s problem solving skills are so unique, and b) because they’re so good within their specialization, they don’t need to invest in marketing. By extension, the supposition is that customers must inherently understand what the company does and know why they’re the right choice. Therefore, the logic goes, the company doesn’t need to work on their marketing strategy, or brand positioning, or what their value proposition is. (Feedback to the contrary and underwhelming sale figures be damned!).

From an inside-in perspective– that is, how people within the company think about the company– the reasoning is understandable. From an outside-in or customer perspective, it is clearly and dangerously flawed thinking.

What to do about it?

First, let’s dive into the underlying dynamic. We all know there’s often conflict between engineers and marketers at technology companies. Engineers want to push the limits of that can be done with technology, while marketers want to focus on what customers want and will buy. When well-managed, the tension between these two equally important and valid perspectives can be productive and lead to significant and highly desired innovation.

But when a technology-centric mindset invades how company leaders think and how business development happens, it becomes a big problem. When this occurs, company culture evolves within an often unspoken and rather insidious “if we build it, they will come” philosophy. This myopic perspective leads CEOs to denounce the need for marketing, or for that matter to reject investing anything to understand what customers think and want.

There are three likely outcomes in this kind of scenario when management puts technology ahead of customers: 1) The company keeps doing what they’re doing and may show incremental growth (usually in fits and starts), but clearly fails to meet expectations, 2) The company stagnates and dies without ever getting to root cause, 3) The company suffers from underperformance until investors or other power brokers demand new leadership and a more customer-centric mindset takes hold.

The other and much less likely outcome is for the company to get lucky, hit a home run with a new technology, and win success in spite of themselves. This fairy tale ending happens just enough, and is so seductive, that it can sustain a CEO’s self-deception that the company does not need to put customers first and does not need real marketing strategy. It’s kind of like the allure of slot machines – maybe the next pull will hit the jackpot!

The good news is that there is a way (besides deep pain!) to overcome a CEO’s dismissal of marketing as an unnecessary investment and the corresponding presumption (i.e. hope) that customers will just “get it.”

It stems from an often overlooked common ground: Both engineers and marketers fundamentally believe that with the right tools, any problem can be solved. The key is to leverage this powerful and shared worldview. This can be accomplished in several ways that I’ll cover in detail in a future post. One of the most compelling is to set up experiments in which management a) hypothesizes what customers know, and b) commits to taking corrective action if their hypotheses are proven wrong. Then you do the customer research to confirm or correct the hypotheses and bring the results back to the team. This approach seems to bypass egos and importantly, reframes the problem in a way that better matches the CEO’s more technical mindset.

Tell us. How have you seen the problem of company leadership denying the need for customer-centered marketing strategy successfully overcome?

How to Unseat the Market Leader: Hit the Right Emotional Chord with Customers

Here’s a tough situation med tech and health IT companies face in healthcare: The maker of a particular technology has more than 75% market share; they are the undisputed market leader.  unseat_pull_the_rug_from_underWhen their device or software was introduced 5 years ago, it was groundbreaking. Now, it’s the standard. But you have something better.

How do you effectively disrupt the market leader’s longstanding domination and win significant market share? The answer lies in the hearts and minds of the clinicians using the technology. You need to carefully and precisely determine which emotional chord will open customers’ minds in order for them to consider moving from the market leader’s technology (the “status quo”) to your new and presumably better innovation.

To reveal the right emotional chord, you must ask the right questions: Are they happy with the status quo? Do they perceive any problems? Can they envision a better state?  These kinds of questions will reveal the “set point,” i.e. where customers are before they know about your better device, service, or software.

In simple terms, there are four main set points based on the idea that customers are either satisfied or dissatisfied with the status quo technology, and they are or are not aware of a possible solution (or better state) a new technology might deliver. Once you know the set point, you need to identify the corresponding emotional chord, so that your messages will connect with customers and resonate at an emotional level. That resonance leads customers to feel understood, which will then open their minds to consider alternatives to the longstanding status quo.

Example: Let’s say customers are satisfied with the market leader’s status quo technology. They aren’t aware of any problems, so they certainly wouldn’t expect new solutions. Your job then is to identify the meaningful problem that: a) your customers will care about once they know about it, and b) your improved technology will solve. (And if no meaningful problem exists, then there’s really no need for your improvement, right? But that’s a different story!).

Once you determine the meaningful problem, be sure to verify customers do care about it enough to take action. Now you need to find the corresponding emotional chord. It could be frustration, as in “why didn’t I know about this problem for all these years!” Or it might be concern, as in “I hope this problem didn’t hurt our patient satisfaction scores!” Or embarrassment at not knowing about the problem. Or relief at knowing about it now. Or hope for a solution to the problem.

There are numerous possible emotional chords, and sometimes the difference between them is very nuanced, like frustration vs. concern in the example above. It’s really important to know with confidence precisely which emotional chord to tap into. Your message to tap into frustration will be quite different than messaging for concern or embarrassment or relief.

If you miss the mark on the emotional chord, then your customers will feel you just don’t get them. You will have missed your chance to open their minds to letting to of the market leader’s technology and to consider your innovation as a viable alternative. On the other hand, when you tap the right emotional chord, you may hear as we have, “Finally, someone understands what I deal with everyday!”  That deep connection is the magic that can unseat the dominant market leader and win you significant market share.

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More resources:

Why Selling New Technology into Hospitals is Hard: Overcoming the Status Quo Bias

The Emotional Hook: How to Win Your Customers’ Hearts

Developing Your New Market Entry Strategy: The 3Cs Framework

Imagine you’re a large medical technology company carrying a wide range of healthcare products. You see huge opportunity in a new market. How do you decide what innovation to lead with, what products to offer, and what your market entry strategy should be?three_c_V2

Here’s a framework that can help you narrow the universe of possibilities. We call it the 3 Cs, which stands for Company, Customer, and Competition. All three are critical factors that converge to reveal the sweet spot for market entry.

Company: This is often the starting point for med tech companies. They see a lucrative market, want a piece of it, and figure they have something good that will sell there. The driver is the company’s desire for growth and their belief in the solutions they offer. The “company” factor narrows the universe by identifying three things: 1) Core competencies and existing assets that can be leveraged for entry into a new market, 2) New competencies the company wants to develop, and 3) New care areas they want to expand into.

Customer: This is about identifying and understanding unmet needs and meaningful problems customers care about, as well as needs and problems they may not be aware of yet. The driver is what customers desire and will pay for. Determining these things requires being really tuned in to your customers. The “customer” factors narrow the universe by revealing 1) what customers want and need and will buy, 2) what their hidden desires and aspirations are and  what better state they envision, and 3) what customers don’t want, don’t value, and won’t pay for.

Competition: The competition factor focuses on identifying what customer needs are and are not adequately met by competitors, and what solutions you have that are already provided by others in the market you want to enter. The driver is finding an open niche of sufficient size for your innovation to take hold. Generally, companies will stay away from markets where there is domination by one or two competitors – unless they are willing to make a huge investment to unseat market leaders. The “competition” factors narrows the universe by specifying 1) where there is space for innovation, 2) what solutions exist and which are still needed, and 3) where there is good growth potential.

The danger is that the company’s hunger to enter a new market can lead to rash decisions and action without a guiding strategy. To mitigate that risk, give serious consideration to customer desire and to the competitive space. That way you avoid being driven by company solutions and wishes, rather than customer problems and desires.

What’s your experience developing new market entry strategy? What were your decision drivers? What lessons did you learn?

More resources:

How to Grow Your Business with Customer-Centric Innovation

How to Get to Breakthrough Innovation: Desirability First!

New Product Innovation: How to Determine the Winners