Health Care Manufacturing: Do Your Customers Have X-Ray Vision?

September 14, 2016 Valerie Howard

If you are in health care manufacturing (medical devices and technology), do you miss the good old days of selling when your reps talked to clients they had long relationships with? Do you remember when clients were eager and ready to be educated and guided to purchase the latest and greatest you had to offer without much price sensitivity? Sadly, those days are pretty much over.

It used to be that doctors, hospitals and patients wanted the latest technology, regardless of price. Now, in a new era of regulation, negotiation and price transparency, the focus has shifted to the value that new technology can provide and the impact it will have on patient outcomes. The growing power of buying groups like GPOs (group purchasing organizations) just adds to the complexity, and often it seems like customers have more insight into broader market pricing than reps do. In this environment, health care manufacturers run the real risk of price exposure from complex pricing agreements and contracted dependencies. Meanwhile, margins will continue to slip away for manufacturers that fail to align their pricing strategy to buyers that are increasingly focused on value and patient outcomes.

An example of a company who addressed these challenges head-on is Hologic, a developer, manufacturer and supplier of diagnostic and medical imaging systems related to women’s health. To compete and maintain its competitive edge in today’s environment, the company knew it needed more than just great products. It also needed to sustain investment in innovation while combatting price erosion driven by many of the factors mentioned earlier.

When waging this battle, Hologic discovered it lacked clear visibility into customer profitability and insight into pricing differences among individual hospitals. Many of its customers leveraged the purchasing power of GPOs to negotiate highly complex pricing structures. The complexities of these contracts often leads to significant price exposure risks for health care manufacturers, where a single misstep in pricing could lead to millions of dollars in downstream repercussions. Due to the high stakes involved in every price negotiation, sales reps need detailed insight into their markets. Acquiring the needed information historically required manual reporting and tedious analysis, crippling the sales team’s ability to respond quickly in providing mutually beneficial purchasing options.

Starting with a vision of where they wanted to go, Hologic used analytical insights and data-science driven pricing to move very quickly from a reactive, manual process to a mature, disciplined pricing methodology. With this new approach to pricing and price strategy, the company can now answers some important questions that will help them grow their business in the future, including:

-Are our prices defensible? -Who are our best customers? -Where is our growth coming from?

By undertaking this pricing transformation, Hologic has been able to hold pricing while continuing to grow market share. With renewed confidence in its pricing strategy, discounting is down and pricing insight is accessible via just a few clicks, rather than days of labor-intensive analysis.

But the story doesn’t end here. Find out how Hologic achieved the quick pricing success that is fueling the next phase of its journey by watching this on-demand webinar: Do Customers Have More Visibility into your Pricing than You?

About the Author

Valerie Howard

Valerie Howard, Solution Strategy Director at PROS, manages the go-to-market strategy for the PROS pricing solution portfolio. As a former user and product manager of PROS solutions, she has firsthand experience in the transformative benefits and competitive advantages that can be realized through pricing technology. Valerie earned an MBA from the McCombs School of Business at The University of Texas and a B.S. in Electrical Engineering through a scholarship at the Cooper Union for the Advancement of Science and Art.

More Content by Valerie Howard
Previous Article
Seth Godin is Wrong about Good, Better, Best
Seth Godin is Wrong about Good, Better, Best

Next Article
Is It Time to Offload Your PSS?
Is It Time to Offload Your PSS?

×

Sign up for AI and Dynamic Pricing News and Events

Company
Country
State
I agree that PROS may contact me. I can unsubscribe at any time.
By submitting this form, I agree to the storing and processing of personal data by PROS as described in our Terms of Use and Privacy Policies
Thanks!
Error - something went wrong!