Making service model excellence a part of your medical device commercial strategy
As we’ve written in the past, the medical device industry spends 300-500% more on SG&A as a percentage of COGS than any other industry.
Consequently, these high cost commercial models are becoming ineffective as medical device purchasing decisions shift from individual physicians to value analysis committees armed with transparent information on product prices and outcomes. We’ve seen physician preference decline 10% in past year and it is expected to dip to 20% more in the next two years.
To address these issues, medical device companies should start to look for ways to reduce their SG&A in addition to providing value-added services beyond the medical device. Service model excellence is one area where medical device companies have not been innovative and have chosen models similar to those of their competitors. Differentiating the service model can help reduce SG&A costs, provide a competitive advantage by differentiating your total product offering and become a source of additional revenue.
What are some examples of innovative service models in the medical device industry? We’d love to hear from you.
Source: BCG. Fixing the Medtech Commercial Model. Accessed 10/30/2013. Available from: https://www.bcgperspectives.com/content/articles/medical_devices_technology_go_to_market_strategy_still_deploying_milkmen_megastore_world_fixing_medtech_commercial_model/?chapter=3#chapter3