The Value of Education in a Product Launch
Thomas Hickey, partner at Excelerant Consulting specializing in Sales and Distribution Development, and host of Medical Entrepreneurship and Marketing Podcast, Med Tech Gurus, holds a master’s degree in Health Economics from Eastern Michigan University.
Bringing a new technology to the medical device marketplace has certainly become extremely complex over the last 15 years. The barriers to entry have become so significant that it can take years to develop a market presence.
This situation has caused potential investors to shy away from the MedTech space. There are companies with amazing ideas that can demonstrate amazing outcomes that never see the light of day.
Entrepreneurs that are working in the current environment are driven by a mission. They want to help patients, clinicians, and society by bring new advances to healthcare. To be honest about it, they are also looking for a healthy return on investment for the stakeholders as well. However, the clinical improvement is a huge reason why we are all in this game.
The question persists, how does an entrepreneur get their product noticed?
Things Have Changed
Many sales executives and consultants like me remember the old days where one could find a few surgeons, show them your product, and then get them to demand that the hospital start to use this product. Get 8 or 10 of these clinicians to use your product and voila’ your company was born and on a profitable track.
Those of us in the industry today know that this formula no longer works. There are GPOs, IDNs, regional contracts and value analysis committees standing in your way. It is not unusual to find that if you do not have a system agreement there might be 20, 30 or more hospitals in a network that you can’t even get in the door.
The old school way of going to the surgeons/physicians no longer works, as many of these clinicians are now employees of the system that you are trying to get into. Their influence has been much reduced.
So How Do You Get Your Technology Recognized?
Bryan Eckard of Venner International addresses these issues on Med Tech Gurus episode # 10
In this episode, Bryan discusses the benefits of using a fixed cost to marketing approach for new product launches. This includes a best practice of contracting with independent sales representatives (ISRs) or Regional Specialty Distributors RSDs). The clear benefit to this as a startup is that these organizations earn their living by selling. Thus, if they don’t produce you pay them zero.
This strategy will help a startup as by definition startups are always cash strapped. For the CEO, taking this fixed cost of marketing route can help preserve several hundreds of thousands of dollars in salaries, benefits and travel expenses.
There is a downside to this strategy, however. ISRs & RSDs by nature always carry multiple product lines or have relationships with several manufacturers. The issue here, is that they may need some significant support — meaning education and support in training and implementing into accounts.
The typical solution for the small manufacturer is to hire 3 or 4 regional managers to support this field force. Bryan suggests a different strategy.
Instead of hiring the regional sales manager, hire a regional clinical support manager. This individual typically with an R.N. RT, or CST credential can be a significant addition to the equation. They will bring with them the credibility of their education and experience. The clinical decision maker will respect them as they will have ‘walk the walk” by having the clinical background.
This dual arrangement of engaging the ISR/RDS plus a clinical specialist can be amazingly effective. The local salesperson will have the relationship and the clinical specialist the clinical support. This will create a great deal of confidence with the decision maker.
A Unique Approach to the Clinical Specialist
Skender Daerti, CEO of the Clinician Exchange, has a novel solution to this challenge. Here is the issue. If a start up is struggling to hire regional salespeople, how can they afford to hire clinical specialists? The Clinician Exchange may be able to provide a solution. Much like an ISR?RSD provides a fixed cost to marketing. The Clinician Exchange can provide a fixed cost to education.
As Skender explains in Med Tech Gurus Episode # 7:
The Clinician Exchange will assist in putting together that educational campaign. Skender explains they have a data base of several thousand clinicians that can be brought in on a contracted basis. The Clinician Exchange will tailor this to every company’s needs. Thus, maximizing the result while minimizing the budgetary impact for the start up.
In this current medical device environment, a CEO must manage their investors dollars wisely. There is a significant need to bring unique value to gain attention and acceptance to a new product offering.
Sales cycles are longer, and a company must get the most out of their funding. By employing a bit of creativity, seeking out companies like Venner Medical and Bryan Eckard or The Clinician Exchange and Skender Daerti can pay huge dividends in getting a company launched.
Excelerant Consulting is also a terrific first stop to develop your go to market plan. Excelerant has all the tools you will need to launch your technology. See www.excelerantconsulting.com