This blog shares the combined sales and marketing experience of the Acorai team, and it will discuss what we have learned in an ever-changing MedTech and Life science industry. It aims to give other startups and established leaders insights into how the sector has changed and discuss critical themes and activities that will lead to continued product success.
Changing market landscape and procurement behaviours
In the first part of our blog series, we will explore how consumers’ purchasing behaviours have changed over the last decade, the current state of medical science sales dynamics and what changes that can come into place to evolve the lagging commercial climate within the life science and MedTech spaces.
Rise of eCommerce and digital information channels
Over the last two decades, the world has fundamentally changed in how we consume products and services, and sometimes it feels that the rate of change has only accelerated in the last 5 years. Notably, there has been a shift in how we interact with brands in our personal lives and the loyalty we show to vendors and retailers1. A main driving force is the rise of eCommerce, which has opened an expanded world of possibilities through increased globalisation.
Ecommerce, although defined as the buying and selling goods and services using the internet, should be considered as more than how we perform the final purchase of products. Over the last two decades2, the share of retail sales through eCommerce rose from 5% (the 2000s) to over 20% of all retail sales in 2021.
However, the impact of digital sales is far beyond how we transact. Its effects are also reflected in how we as consumers become aware of and evaluate products before making the ultimate purchase decision 3. This is known as the “customer buying journey”, described by McKinsey&Co as a ‘loop’, starting with awareness, moving through consideration phases and then to an ultimate purchase decision. Yet after this, the additional customer touchpoints can progress users to be advocates and then loyal customers.
So what does this have to do with Life Science?
As within the infinity loop, offline brand exposure is almost always coupled with online evaluation and research, giving rise to the importance of the availability of product information, trusted reviews and optimised presence in search results 5. Intuitively, more information leads to higher satisfaction and often protects consumers from unwise purchases due to a lack of exposure to alternatives. Yet the opposite side of this coin is that it could lead to ‘analysis paralysis’ through information overload and too many choices being available.
In any case, These same consumers are our Doctors, Nurses, Technicians and HealthCare professionals who make the purchase decisions on behalf of patients needing medical treatment. Therefore the adoption of eCommerce and digital information channels in their personal lives will influence how they wish to receive product information and alternatives in their professional careers. Thus, the onus is on the medical companies to ensure they can present and display data in the new ways that consumers have come to expect in their buying journeys.
Limited / Lagging evolution of procurement behaviour in Life Science
Like most Business to Business (B2B) sales 5, life science and medical devices sectors are still often considered laggards to the adoption and influence of online marketing channels. Moreover, the healthcare industry is generally slower in adopting digital technologies to reach, engage, and educate healthcare professionals. Traditionally, digital marketing has been an adjunct to physical sales or clinical team activities, in-person events or congress attendance.
There are many reasons for this being the status quo and why the sector as a whole has not fully embraced digital buying cycles and marketing techniques. One of the most crucial reasons for this is how the buying process is organised and structured, with large decision-making teams and several administrative steps which dramatically impact the speed of purchase decisions 6.
Because of more in-depth analysis and increased ‘executive oversight’ of the procurement processes, the average time of a B2B procurement process is approximately 3 months 5. Yet often in the healthcare sector, this is typically longer and sometimes up to 2 years in total depending on the technical complexity of the product and the total value of the contract (i.e. an MRI machine or multi-year agreement) 7
This may be compounded by increased competition which warrants even more extensive return on investment (ROI) analysis. Unfortunately, in some cases, long procurement processes have become the ‘norm’, and bureaucratic policies are being applied unilaterally to all purchase decisions irrespective of the total value. 7.
What can you do to help Buyers and the opportunities?
The good news is that we know from buyers surveys 5,6 the top reasons why procurement departments select vendors. These are; a timely response for information, knowledge of the product and product category and demonstration of understanding of customer needs.
Historically, this has been achieved through in-person meetings and direct sales teams yet this is costly, time-consuming and, in the current climate, increasingly more difficult. Equally important is the number of centrally procured products increasing, with an increased number of vendors, so time for buyers to meet 1:1 to understand each product’s unique features has become impossible.
The fact is that no single company is going to be able to fundamentally change the formal buying process established by hospitals and medical facilities 7. This is where eCommerce and digital marketing techniques can help startups and small businesses speak directly to buyers to accelerate the process of product understanding. Structuring your website to provide all the relevant information specific to each hospital use case and having easy access to pricing and competitive information will aid potential customers in their buying journeys.
Making the buying process more accessible can in some cases even be more important than a technological advantage. If a customer or buyer cannot understand how a technology will benefit them specifically or how it is priced, then the likelihood of them adopting it becomes increasingly low. The advantage for small businesses or startups is that your website and eCommerce tools are still new, making it easier to change and adapt to provide all relevant information.
The key takeaway? Embrace technology to meet the changing consumer expectations, and it will put your business in the best light to outpace those companies who choose not to.
In the next edition of the “Navigating the New Age of MedTech Sales & Marketing” series by Acorai, we will explore equity in healthcare, the differences between equity and equality and how we can lead the way by putting equity first in how we build and grow a MedTech business.