If you’re in the medical manufacturing industry, over the last few years you’ve seen a big shift. Doctors are no longer calling the shots, at least when it comes to making purchasing decisions. Purchasing has shifted to procurement departments and GPOs that are hyper-focused on driving down costs, and sometimes it seems that quality is taken for granted.
You don’t have to look far to see what’s driving this pricing pressure. As health care costs go up, health care providers still have to serve their populations and are looking to their vendors to cut costs. It’s easier for hospitals to put pricing pressure on people like you than take money out of the pockets of doctors and other employees, especially when technology makes it easy to compare prices across vendors and transparency is at an all-time high.
So what can you do to keep up? One thing is clear, you need to shift to a modern commerce approach to pricing; relying on doctor/hospital loyalty and Excel spreadsheets just isn’t cutting it anymore. You need dynamic pricing science with purpose-built analytics, optimized price guidance based on willingness to pay, a scalable price management platform and algorithmic price methods with proactive alerts. These are the tools that industry leaders are using to take back control of their pricing and respond effectively to changes in the marketplace.
Dynamic pricing science offers concrete guidance on how to price your product for profitability, and even when to turn down a deal that’s not in your best interest. Focusing on customers that are going to be loyal to your brand, and using higher profits to fund innovation, will help keep your company (and your healthcare providers’ patients) healthy long-term.
If you want to learn more about modern commerce for medical manufacturers and dynamic pricing science, our ebook: Fund health care product innovation with revenue from the right customers, is a great place to start.