“No margin no mission” is a quote attributed to Sister Irene Kraus, the founding chief executive of the Daughters of Charity National Health System. Health tech entrepreneurs face the same issue as they strive to bring their innovations to market. Getting a buyer to pay for your product is the ultimate litmus test of its viability. Yes, the product needs to solve an important problem. Yes, it needs to have a brilliant design and user interface. And yes, it needs to scale and be performant. But at the end of the day, to be successful you need paying customers.
Investopedia defines commercialization as “…the process of bringing new products or services to market. The broader act of commercialization entails production, distribution, marketing, sales, customer support, and other key functions critical to achieving the commercial success of the new product or service.”
The team at Get-to-Market Health specializes in helping our clients with the back end of commercialization, specifically distribution, marketing, and sales. We have helped clients at all stages of a product lifecycle. Sometimes the product is little more than an idea. At the other end of the spectrum, it can be a product that is in market but not meeting sales expectations, and anywhere in between those two extremes.
Understanding where your product is in its lifecycle is the crucial first step. It allows you to plan when and how you will go commercial. A simple SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis is the right place to start. Be self-critical and honest. Do not get confused with what you hope the product will become and instead focus on where it is today.
The next commercialization step involves working with the right type of customer at the right time. We see three types of healthcare buyers:
- Development Partners – These are very early adopter customers who have unique needs that your product can solve. They also offer executive support and exhibit the staying power to work through the trials and tribulations of early product development. Make sure you double down on this angle as every product from every company has teething issues. You will need to exchange favorable pricing and terms for their efforts helping you get to a workable product. However, deals done for zero money are not helpful to anyone. Development Partners need to demonstrate buy-in. It is critical that you do an excellent job qualifying their ability to be a solid partner at the beginning and hold them accountable through the development process.
- First Movers – These customers want to be on the leading edge of adoption, but do not qualify as Development Partners as they are too busy, too cautious, and/or or too reliant on having a more complete product. First Movers will make or break your product because they will grow into your best reference sites, so you need to be hard core about carefully selecting them. Ensure you have a diverse set of accounts (Academics, IDN’s, small, big, etc.), and that they are geographically dispersed. First Movers in California may not see the world the same way a hospital on the east coast does.
- Market Majority – No matter how much sales muscle and marketing spend you aim at them, this group of customers will buy when the time is right for them, and when the product is completely ready. They look to see that enough First Movers who they respect have taken the step to deploy. They subconsciously trade paying full price for the shelter and security that comes from being in the safe zone. They require successful installs to point to, expect a demonstrable return on investment (ROI) and have a high bar for product completeness.
Your emphasis will evolve as you move along this customer arc. Additional focus areas for your team by customer commercialization type include:
- It is critical to get your timing right for launch or re-launch with Development Partners.
- Ensure they are onboard with a Minimally Viable Product (MVP) that will work in their environment.
- Carefully recruit accounts with important Key Opinion Leaders (KOL’s) who can vocalize your product capabilities and the impact on their organization.
- Make certain these customers will allow you to track before and after impacts of your product.
- Understand the key segments in the market who will need your product and plan your approach to each in a tailored manner.
- Develop solid communication around product capabilities and features for this group.
- Plan to vet any key Go-to-Market partnerships with your First Movers. These partners can assist with sales, service, or aftermarket add-ons.
- To enable faster decision cycles and decision making, create thoughtful positioning for this customer type.
- Getting your sales approach (direct sales by your employees, sold through or with partners, or some combination) right is critical for this customer set. They will want to have an established and normal way of buying.
- Price matters to all customers and nailing it is essential. Given the size of the Market Majority and the pace at which they buy, landing on the best pricing approaches are key.
The Centers for Medicare and Medicaid Services (CMS) projects US healthcare spend of over $4.5 trillion dollars in 2023. However, healthcare buyers are becoming increasingly sophisticated. CFOs and their procurement leaders have increasing sway over purchasing decisions and timing. If you want to ensure your product gets its due, you need to match the market with a customer-nuanced approach to commercializing your offerings.