Product-centric to customer-centric. That’s the mantra for the medical device manufacturers today. MRI scans, CT scans, X-Ray machines, nebulizer etc functions so specific and unique that are used to diagnose ailments. In an age of Innovation & Technology: specialized instruments take to the stage. Today, especially in the med-tech field, there is demand for specialized equipment and cost friendly discounts for the customers.
The whole global medical technology industry’s market size stands at some 400 billion U.S. dollars. Established centers of this industry include the United States and Western Europe. The medical device manufacturing and technology market will eclipse $500 billion in sales by 2021. This growing industry will need to rectify certain sales practices.
We have compiled a list of pain points and how companies can address it adequately.
The Painting Pins:
1. Expertise for Niche
Hypothetical guarantees or flashy presentations do not work for the med tech device manufacturers. Here the features are solely based on the requirements of the buyer. Hence, it becomes mandatory for the complete team including product designers, marketers and engineers to hold specialized knowledge on the specific domain in which the product is focused on. For instance, the person focused on business needs to be well-versed with how the product functions and requisites to produce the product. The sales representatives should be cognizant of the product or service provided: Intricate details. Focused knowledge enables a team to discuss the device in a better way and explore efficient ways to address the requirement.
Novice to expert. How?
- Regulatory Compliance and Product Quality
Precise, intelligent sensors and instruments need to be utilized to demonstrate accurate measurements. It helps to ensure the errors fall within acceptable limits. The manufactured products should comply with the applicable legal and regulatory formalities. Moreover, companies should be able to maintain great consistency in product quality.
- Managing Dynamic Requirements of the Market
The buying cycle for med tech devices is comparatively longer. Adding to the challenge, are the fast-paced changes required by the industry and nature of the buyer are as follows:
- As the cost of technology decreases with time, and it becomes favorable for the buyer in most cases. As a result, the balance between performance and latest capability is often compromised. Customers often delay their decision due to multiple factors. This can become expensive for the manufacturers.
- The longer buyer cycle and dynamic pricing increase production cost for the companies. This is yet another major challenge for manufacturers and sellers of med tech devices that influence their funding allocation.
- The previously agreed upon quotes regarding features may change by the time the final sales deal is done. However, the whole value of the deal changes when the prices aren’t same.
Manufacturing a complex product is no cakewalk. With all the marketing mix, design cost and raw materials in place, it’s not difficult to make out that the production cost for equipment is sky high in the med tech industry. Besides, the ever-rising competition pressurizes companies to cut down prices and profit margins. Sellers are always in fork roads to push the deal or wait for better one to come.
- GPO’s Pricing Control
Group purchasing organizations(GPO), enterprises come together to secure best discounts based on similar materials they share. GPO’s have been merciless in demanding better prices and manufacturers need to be inventive with their pricing schemes. The pressure put on the vendors drive inconsistencies in negotiations. Making smart decisions is harder. A descriptive cost analysis is needed to address this issue. So that a fair price can be set.
The Pain Relievers
How can CPQ address the Pain Pins?
Configure Price Quote, abbreviated as CPQ, offers a complete solution to the challenges in med tech manufacturing and sales. Multi-channel CPQ systems can significantly help marketers and sales professionals.
- CPQ helps companies to identify product dependencies, capabilities, limits, and other specifications. To address the requirements of buyers, CPQ helps in suggesting products that you might want to buy. The whole process of buying product dependent accessories are simplified to scroll and buy.
- To control costs, CPQ helps to come up with flexible product design. It fastens the production of highly specialized products in limited volume while facilitating mass customization. This way, it becomes quite easy for companies to maintain cost control.
- CPQ brings more transparency between buyer and seller regarding the quotation. The sale proposal will be accompanied with detailed billing report of all materials that are used. There is no ballpark figure but only realistic price descriptions that are shared with the buyer.
4. CPQ quote formation provides with pricing and purchasing data. Clear visibility into the customer pricing provides you with effective negotiations and delivers on long-standing relationships with GPO. Real-time data on discount trends and average selling price eases to make a smart decision
- Discounts and Promotions are done on the CPQ platform. Discounts are easily processed and given. Acceptable rates are suggested to help close deals faster.
- Rebates in CPQ- The amount paid by way of reduction, return, or refund on what has already been paid or contributed. This way of attracting customers and gaining loyalty is well accounted which drives repeat orders.
- Partnering with external folks – distributors, resellers with CPQ portals. Communities can be created and leveraged. Approvals of discounts, promotions, rebates etc. can be easier when a line of communication is established.
High competition, ever-tightening regulatory burdens, constantly changing market requirements. These are real challenges for med tech device manufacturers. There is, therefore, a need to exercise tight cost control measures in manufacturing and sales to thrive in the market. Adopting CPQ systems is the solution for med-tech manufacturing companies.
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