Article

How to outperform growth within healthcare

Published

June 2018

Authors

Direct-to-consumer dialogue and digital channels can help you outperform growth within healthcare

As a patient in the healthcare system, it has never been easier to access your information. With the internet, it is just a click away. Access to information about conditions and medical products enables patients to take control of their own lives as well as choice of products. This opens for new ways to approach the market – ways in which healthcare companies can interact with the patients through phone and digital channels to help drive a pull effect in the market.

Our experience from working with global medtech companies in 14+ key markets shows a clear tendency. Companies that succeed with the direct-to-consumer approach significantly outperform market growth. On average, we have seen the following impact on leading growth indicators1:

  • Lead volume: +40-60% (increase in number of free sample orders vs baseline)
  • Sales per FTE: +25-35% (increase in absolute sales per call specialist vs baseline)
  • Top-line growth: +15-25% (increase in top-line revenue vs baseline)

(Source: Based on Implement insights from working with two global medtech companies in 14+ markets)

Focus and source of this article:

  • Healthcare industry defined as business-to-business (BtB) companies selling medical devices to patients with chronic diseases.
  • Viewpoint based on Implement Consulting Group’s insights from rolling out direct-to-consumer (DtC) concept in 14+ different markets for two global medtech companies in the chronic care market.

What makes DtC so attractive in medtech?

So why should you consider DtC as part of your strategy? Well, there are several reasons, the most obvious one being that you must do it to avoid being left behind and end up as purely a manufacturer. The other more detailed reasons (also highlighted in fig. 1) are:

Consumption: Most healthcare consumers need to use their product more than once a day. This means that consumption is relatively higher than the average fast-moving consumer goods or business-to-business product – something that increases value per consumer significantly.

Buyer involvement: The level of involvement is naturally high due to the consumer’s chronic condition. This means that healthcare companies do not need to create consumer involvement to the same extent as other business-to-consumer (BtC) and BtB markets. It is there from the get-go.

Price sensitivity: Most medical device products are either fully reimbursed or co-funded through insurance (depending on country). This means that price elasticity is naturally lower than other traditional consumer products. Also, the fact that a new medical device product can significantly improve the quality of life for a patient plays a vital role in this context.

Figure 1 – High-level overview of differences between BtB, BtC and DtC.

Direct-to-consumer is about creating a pull effect

DtC is about creating a pull effect in the market where you pull the consumer back to the dealer asking for that particular product.

The traditional business model for most healthcare manufacturers has mostly focused on having a large B2B salesforce where sales reps create a product preference at hospitals or dealers, thereby creating a push effect on the demand.

However, when patients get discharged from hospital, they have started to act more and more like traditional consumers, searching for information about their condition and relevant products online.
Therefore, there is a need to add a new direct-to-consumer channel to the existing business model that allows companies to influence healthcare consumers through direct marketing channels (e.g. Google SEM, email marketing etc.).

Figure 2 – Illustration of the pull effect

This DtC channel encourages consumers to visit the company website where they can educate themselves on their condition and order free product samples. You thereby create a pull effect where you pull the consumer back to the dealer. This gives manufacturers two key advantages (see fig. 2 for pull effect illustration):

  1. It drives up the number of new customers, which in turn increases top-line revenue.
  2. You increase buying power. By reaching out directly to your consumers, you create a product preference in the market. This in turn pulls consumers back to your distributors, who will eventually need your products in stock in order to keep up with demand. In return, you can increase buying power and achieve better margins.

What do successful direct-to-consumer companies do?

Many agencies and consultants offer services on how to improve online marketing. And while digital marketing departments are important, driving digital end-user engagement within chronic care industries is typically not the key challenge. Due to the high patient involvement and low price sensitivity mentioned in figure 1, the real challenge for most B2B healthcare companies is how to follow up on the leads, convert them into new customers and provide a seamless customer experience more than it is about driving up website traffic and generating a higher number of leads.

Direct-to-consumer is all about connecting the dots between Marketing, Data & CRM processes and inside sales to create a seamless customer end-to-end experience. What happens when the consumer orders a sample or product online? How do you follow up at the right time, with the right communication and through the right channel? All while doing this through a cost-effective and performance-driven inside sales and support team?

We normally focus on four areas of DtC (see figure 3):

  1. Enhancing team capabilities: Structure the organisation and add the right competences.
  2. DtC marketing: Establish and accelerate lead generation through the right channels.
  3. Data processes: Enable full transparency and streamline the data and system processes.
  4. DtC sales: Ensure strong customer support and inside sales execution.
Figure 3 – Four areas we focus on in DtC

This DtC setup differs from many classic B2B frontline salesforces. For instance, you conduct DtC sales using an internal contact centre function – like in call centres. This setup provides you with the opportunity to go large-scale fast and in a cost-effective manner. Gone is travel time between customers. Available are performance data indicators and the opportunity to reach out to customers in a short time at a low cost. This all sounds good, but implementing it with success is complex and there are many pitfalls.

Six successful direct-to-consumer trademarks

Why is it so difficult to put in place an effective, customer-friendly and profitable DtC channel? After implementing direct-to-consumer design across markets in leading healthcare companies, we see a clear pattern1. Too often, organisations launch their marketing efforts without the processes or people in place to create a seamless customer experience (figure 4 illustrates the DtC sales funnel).

Figure 4 – DtC Sales funnel stages, where companies often fail in making a seamless end-to-end customer experience.

So how do you create a well-functioning lead engine while providing a seamless customer experience (See figure 5 for an illustration of the end-to-end experience)? The following six factors are key.

  1. Get the right organisation and resources in place. This is the point of departure in implementing a DtC strategy. It means clearly defined roles and responsibilities. You need to carry out a proper prematurity and market potential analysis. Without the analysis, we often see unbalanced staffing and competence gaps in the DtC organisation.
  2. Moving from customer service to “customer service while selling” is a change management hurdle of its own. Healthcare companies have well-functioning customer service or inbound call functions in place already. How do you go from 80-90% inbound call handling to the opposite of 80-90% outbound proactive sales calling while maintaining quality and care towards the customer? What is a good call and a good conversation?
  3. Building the right system and data handling processes is by no means sexy, but it is the engine and key to a seamless customer experience. Who enters what into the CRM system? Who calls which customer and at what time. What data need to be available for a good dialogue with the customer, and what channels do you use as follow-up? These are some of the questions you need to answer.
  4. Defining the right lead follow-up strategy is about “who do we call when”. This is when you take cost and time into perspective. Is a phone call or personal conversation best, or should you follow up with an email or through other channels? What do you talk about to ensure a meaningful and relevant dialogue?
  5. Aligning lead volume with resource capacity. Inhouse marketing departments often launch a campaign without knowing the available resources, thereby risking poor customer follow-up. Nobody wants to have available resources with no leads to call or too many leads with no resources to follow up.
  6. Finally, you need transparency in key performance indicators as well as meeting cadence where you define who meets and talks about which data at what time to drive performance forward. Which KPIs are vital? How do you design a dashboard? How do you create a meeting cadence where you improve future performance instead of reviewing past performance?
Figure 5 – Example of the DtC end-to-end process; from generating leads to following up on confirmed sales.

Are you ready to make a game-changing choice for your company?

To succeed with direct-to-consumer, you need to give your company a competitive advantage. And to do that, you have to make top key management choices.

You need to make bold choices and ask yourself “where to play” and “how to win”. For instance, are you a B2B company, or are you both a B2B and a consumer company?

Based on our experience, the ones who choose the latter outperform the rest of the market.

1 Source: Based on Implement insights from working with two global MedTech companies in +14 markets