Thomas Watson Sr. of IBM once famously said, “Nothing happens until a sale is made.” As obvious as that may be, it can be easily overlooked when times are good, and revenue is rolling through the door. But when times are difficult, that message needs to be front and center in your organization. And as you know better than anyone, times are tough in the health tech industry.
- Today’s difficult financial times may unfortunately foretell the end of the road for some overstretched companies.
- Your customers are experiencing significant pain given wage inflation, expanded competition and ever stricter financial controls.
- Inflation, lingering supply chain issues, high interest rates, health system financial challenges and an investor pullback present significant risks to your business.
So, what should you do to overcome these obstacles? Grow. Grow your business and grow your revenue.
Revenue growth can help solve all the challenges your business faces, and in 2023 that is truer than ever. With the recent shape of capital markets, investors are demanding a clear revenue story in ways they weren’t just a few years ago. This aligns with what we are hearing from our client CEOs and others in the health tech industry.
The problems outlined above can often consume your attention, but you shouldn’t be diverted from today’s most important goal: growth. Growth, and the increased revenue that comes with it, is the single most important catalyst that can turn your company around and provide the resources to help motivate your employees and satisfy your investors.
Meeting the Growth Challenge
Many factors contribute to growing your business: product, marketing, delivery, support, sales, motivated employees, satisfied customers, and capital to fund key initiatives. While it is rare to have all those levers working at the same time, putting the right pressure on the right lever at the right time is the key to growth.
We surveyed health tech CEOs to find ways to take advantage of today’s opportunities to drive company growth and increase revenue. Their suggestions include:
- “Put lots of lines in the water” to see what bites. In troubled times multiple revenue sources are more valuable than ever.
- Know when your existing markets are reaching maturity. This allows you to thoughtfully shift resources and fund new product areas to generate future revenue. Nothing motivates employees and calms investors like a new product or solution with traction.
- Manage your funds prudently and look for buying opportunities that didn’t exist even a year ago. Bolting on a competitor’s product or buying a customer base can be a great way to fuel growth.
- Double down on your sweet spot. Given the short financial leash that may be restraining you, focus on what you do well and the markets in which you perform best instead of seeking new markets. Hold off expanding into new markets for another day.
- Change tactics to meet these challenging times. Pricing and targeting are two of the most powerful levers you have at your disposal. For example, we are seeing a few clients focus on smaller deals that help win them more “logos.” This approach will lay the foundation for future same-store growth with an influx of new accounts.
- Engage deeper with your customers to gain a greater understanding of their pain points. Getting close to your customers will enable you to better tailor your offering to help them. Spending extra time on your current customers to grow your market share with them is a solid strategy to weather tough times. This will also provide you with more “committed fans” to sing your praises when the market turns more positive.
- Consider focusing on channel sales as a low-cost way to add revenue and growth without distracting you from your core business. Building partnerships isn’t easy or free, but in times when new revenue is scarce, the right channel partner can take you to markets you can’t easily reach.
- Make a strong commitment to growing your net new business base. This may seem counterintuitive in today’s market, but companies in our space are making the needed changes to make that happen. Nurturing your existing install base may get you through peaks and valleys, but a healthy company needs to have a robust new account mindset to create sustainable growth.
- Take steps to lower your manufacturing costs and fix product issues. These actions can pump up profits and put your company on a solid footing for growth, especially when the markets turn favorable.
Taking Advantage of Opportunities
Health systems are slowly launching digital transformation initiatives, but they aren’t yet as automated and technically capable as they need to be to deliver the best care at more reasonable prices. This means your company has enormous room for growth. Although times may be tough, keep in mind that business giants like Microsoft, Apple, Netflix, Mailchimp, and Airbnb, all started during economic chaos. This may be the perfect time for you to take risks, lean forward, and drive the revenue growth that will help you make it through to better times.
We have spent our careers helping health tech companies drive revenue. Please reach out to see how we can help your company grow.