Category Archives: med device

Make Medical Devices & IT Solutions Customers Want & Buy

In medtech, you encounter unique challenges to making devices and solutions customers want and will buy. External forces, like downward cost pressures, reimbursement challenges, and regulatory requirements make it tough. Plus a lot of device and IT companies impose relentless pressure to get the next big thing to market – and to do it now.

In light of all these pressures, how do you increase your effectiveness at making devices customers want and buy? Keep customers first in how you think and all you do.

I know, I know. It’s easy to say. It can be hard to do. And it’s not a panacea to counter all the marketplace challenges you face. But it can ground your thinking, guide your decisions, and help you get the best possible results.

In a recent article published in Device Talk, the med device industry blog from MD+DI, I outlined four keys to making devices customers want and will buy, from a customer-centric perspective.

The 4 keys:

  1. Start with the right business mindset
  2. Get customer input – the right way
  3. Decide between MVP and alternatives
  4. Recognize your work saves lives

This approach will lead you to think differently, engage with customers differently, and design and market your devices differently. You really can increase your effectiveness by keeping customers first in how you think and all you do.

Read the full MD+DI Device Talk article here.

Let me know what you think.

Med Tech Product Managers: Persuading Your Management To Support Your Innovation

innovationJames is an experienced product manager at a large device company. He has a winning new population health idea supported by a strong business case.

James knows his new initiative will pivot the company well for the future of value-based reimbursement. He also knows that maintaining the status quo will be a death knell as the fee-for-service paradigm gradually disappears.

James has solid ROI projections and trend analytics to back it all up. He also knows his idea fits and delivers on the CEO’s stated vision for the company’s future.  He has pitched the idea up the management chain internally on several occasions.

The problem is James is not getting the support he needs from upper management. He gets heads nodding but no action. No commitment. Overall lukewarm reception.

Why? Because even though what James is proposing is sensible, timely, backed by facts, and aligned with the corporate vision,  it requires going in a direction that is unfamiliar to the company. It is perceived as an unknown. It is therefore seen as risky business.

What should James do? It doesn’t make sense to simply repeat the same arguments and expect a different result. He already made the best case he could. But he knows the window for competitive advantage is slipping away.

James needs other voices to give his bosses enough confidence to say yes and invest in what they know is a good idea and necessary for the company’s long-term viability, despite their concerns. These other voices need to be strong enough to overcome fear of change, fear of moving into an unfamiliar space.

James doesn’t need a large quantity of voices. Survey numbers won’t make his case more persuasive. The status quo thinking he needs to overcome is not rational. He needs to strategically manage relationships with his internal customers. Persuasion at an emotional level if required.

Specifically, James needs smart, influential people that genuinely share his thinking and who his bosses will listen to with open minds. That means select key opinion leaders and perhaps several important customers who will voice their agreement with three things: 1) The underlying premise about healthcare’s inevitable shift toward population health management and value-based reimbursement. 2) The recommendation to take proactive action now in order to be positioned to serve healthcare customers in the impending new business reality without losing viability in the current fee-for-service environment. 3) The reality that not taking action is the riskier choice.

The insights and recommendations need to be delivered carefully and strategically to be heard and take hold. Even if these influential voices are only echoing what James already said, when management hears it from them, it has a different impact.   It shifts the perception of risk away from stepping into new territory, and toward missing the boat by not moving forward with Jame’s idea.

There’s a lot of science and research behind how and why this works from studies of persuasion and decision-making. But bottom line, and like-it-or-not, James needs to marshall additional resources to persuade his upper management to move forward and with sufficient investment. The end result is management’s initial fears of change are allayed, they feel reasonably confident that they are moving forward in the right direction, and most likely, they say yes!

Connectivity and Interoperability: Advance the Frontier… But Don’t Overdo It!

big_data_waveJames is a senior product manager in a med device company. He had a pretty typical business day last Thursday. Besides meetings and desk work, he was communicating online for about three hours on and off. During that time, James sent 34 emails and 15 texts and received 29 emails and 18 texts. He got 5 messages from LinkedIn, 3 Skype notifications, and over a dozen updates from various professional groups. He booked 4 customer meetings via his CRM and scheduled 17 tasks with his team on BaseCamp. He got invited to 11 events and was pinged with 14 calendar reminders.

Some of these things were really important to James, some mundane. However, all these activities went to the cloud, then to all his connected devices – cell phone, tablet, and watch. There was no discrimination as to what specific content was worth sharing, so virtually everything got distributed and was accessible on all his devices. When James saw 83 of the things he did online earlier in the day also show up on his phone, then on his watch, he growled: “Why are they telling me all this?!”

And whenever he was on his laptop and interrupted by text messages popping up on his screen, he felt intruded upon: “Why are they assuming I want this??” he shouted in his head. “Let me choose!”

Switch gears to healthcare. Connectivity and interoperability continue to be really hot topics throughout the industry. Health IT and med device companies are offering more and more connectivity and interoperability in their systems and solutions. GE describes the sharing of information between medical devices and information systems as “fundamental to GE’s healthymagination objectives of lowering cost, increasing access and improving quality.”

The core purpose underlying connectivity and interoperability is collaboration that improves care. HIMSS defines three levels of interoperability. The highest level is “semantic” interoperability, which requires that data is not just exchanged between systems (both IT and devices), but made available in a way that can interpreted and used by the clinician.

Done right, the technologies that enable connectivity and interoperability can help transform the industry by facilitating better health care and improved health outcomes at lower costs. That’s good for the healthcare industry overall and good for patients. Whether driven by Meaningful Use requirements, competitive pressures, or clinician needs, fundamentally, connectivity and interoperability are customer-centric ideas.

However, like with James above, be careful not to go overboard with connectivity and interoperability. This can happen when what is possible, i.e. what technology can do, trumps what is desirable, i.e. what customers want, need, and will use. Sometimes less is more. Sometimes it’s the discernment  of what information really matters that makes connectivity and interoperability so powerful.

Be sure you know what data (and in what form) your customers want, can interpret, and will use; and what data is just frustrating or confusing clutter. Do your homework, don’t assume. Just because all the data can be shared collaboratively doesn’t mean it all should be shared.

 

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.

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.

__________________

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

 

Med Devices, Butterflies, and Increasing Sales: The Little Things

I was leading a workshop recently for a client bringing a new critical care device to market. As one step in the process, we were doing wide-open brainstorming to generate a large quantity of ideas on what the value proposition might be that we would later synthesize and vet with customers. We were specifically looking for meaningful differentiation.butterflies

One savvy marketing person bravely expressed that as a former clinician, she knew that little things, as silly as it might sound, can make the difference between winning the hearts of critical care nurses and getting the sale – or not. The example she gave was butterflies. As in enabling butterflies to appear on the monitor display (out of the way of patient data of course). Then she suggested other simple ways of allowing personalization.

These “humanizing” gestures cost almost nothing to med device  manufacturers, and can mean a great deal to the customer.  They convey that you understand the realities of the emotional toll it takes to provide critical care day after day. And they make you in a simple and profound way a valued partner – not just a vendor of commodities – which is where you want to be.

Obviously, butterflies and other personalization aesthetics are not going to be the core value proposition for any med device. But these kinds of things can enrich your value proposition, differentiate on an emotional level, and enable a deeper more meaningful connection with your customers.

So… what’s your butterfly?

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

You’re pitching your company’s new device or software solution to a hospital. You believe your product is clearly superior to the outdated technology the hospital is currently using. You know they have the money to switch. Standard economic theory would predict that the hospital decision-makers would rationally choose your product since it would provide them with greater utility. But the hospital decides to stick with what they have. What’s up??

There are a lot of barriers companies face selling into hospitals. One of the most pervasive and misunderstood, is the tendency for customers to make non-rational decisions to stay with the products they have. By non-rational, I mean the decision is based on an emotional preference, not an objective judgement that the current technology is as good as or better then the new one. Psychologists call this emotional preference the status quo bias. It’s a big deal.

Research in behavioral economics shows the status quo bias significantly affects important life decisions like health care plan choices, selection of retirement programs, stock market investments, recommended medical treatments, and all kinds of purchase decisions. It’s one of several biases scientists have identified to explain what appears to be irrational decision-making.

Think about it in your own life. The food you eat, the places you go, the clothes you wear, the things you buy… how often have you stayed with the familiar rather than trying an alternative?

While there are many explanations for the status quo bias, here are three of the big ones:

  1. Uncertainty: Good or bad, clinicians or IT directors know what to expect from the technology they use now. Switching to your product means taking a risk; they don’t know if it will perform as promised. As the old saying goes, “better the devil you know than the devil you don’t.” Scientists call this loss aversion.
  2.  Transition costs: It’s not just a matter of buying your product, it’s also all the  costs – time and money – involved in switching from what they’re using now. Training staff, updating clinical protocols, adapting workflows- all these things go away when a hospital maintains the status quo.
  3. Minimizing regret: People feel worse about problems that come from changing to a new product (action) than problems that come from sticking with what they have (inaction). To avoid regret,  hospital decision-makers choose inaction and keep the technology they have.

How can you overcome status quo bias so that customers buy your superior technology?

  1. Connect emotionally: Acknowledge and empathize with the tendency people have to stay with what they know. Give relevant examples of when that has worked for hospitals and when it has backfired and led to significant negative outcomes.
  2. Recalibrate their status quo: Change the reference point from the status quo being doing nothing to the status quo being doing something. Make the case that most hospitals are switching to new technologies- that’s the norm. The question is which to choose, and when.
  3. Reduce their risk. Demonstrate that staying with what they have is the risker option because it guarantees negative outcomes (be specific, e.g. more IT downtime, unnecessarily complicated workflows, less time with patients, incompatibility with EMRs or other devices, etc.).
  4. Reframe transition costs: Recognize objections related to transition costs. Acknowledge those that are true, then dismiss the remainder with evidence of savings that will result from switching.

Try it and let me know what happens. When you can overcome the status quo bias in these ways – and you can! – customer trust and sales can increase dramatically.

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The classic from the founders of Behavioral Decision Theory: Kahneman, D., & Tversky, A. (1982). The psychology of preference. Scientific American, 246, 160-173.

 

 

 

Why Health Tech Companies Should NOT Emulate Apple

“We want to be like Apple!” I can’t tell you how many times I’ve heard this from teams innovating new products. What they mean is they want their new products to be sleek, attractive, and easy to use – something that does not come easy to most med device manufacturers.

The aspiration is good and noble. If fulfilled, the company is providing customers with things they want and love, improving healthcare, and making money.

However, Don Norman, my mentor, friend and former VP at Apple, makes a strong case for not emulating Apple any more, because at Apple, beauty is coming at the expense of function:

“Apple has gotten carried away by the slick, minimalist appearance of their products at the expense of ease of use, understandability, and the ability to do complex operations without ever looking at the manual. Today, the products are beautiful, but for many of us, confusing.”      -Don Norman

For the med device industry, the challenges are even greater because of the inherent complexity of most medical devices. In fact, many companies over-engineer devices with far more capabilities than customers want or need. We hear from clinicians and the C-suite time and time again that they’ll choose the workhorse machine that’s easy to use and provides the most needed functionality, over the uber-sophisticated, feature-laden device that can do more but is harder to use.

If, on top of providing too many features, designers, engineers, and product managers prioritize aesthetics and the “cool” factor over discoverability and ease of use, then clinicians and executives get even more turned off.

On the other hand, when the team puts the customer first and only provides features that solve meaningful problems customers care about, and makes them attractive and easy to use within the fast-paced clinical workflow, then they’re on the way to a winner.

So be like Apple was, when they practiced good design principles and made beautiful devices that were easy to use and love. And keep customers first!