Tag Archives: Medical Device Marketing

Market Risk Identification in Product Portfolio Planning for the Medical Device Market

August 16, 2016 timwalker317526 1 Comment

The Set Up

Recently I mentioned using a Monte Carlo approach to determining market risk that you should address with your Product Portfolio Plan (PPP). I thought I would take a minute to describe the approach. As a reminder this post deals with only one of three key dimensions of setting your goals for your Portfolio Plan. The PPP should maximize the impact that your new product investment has on your companies performance in the Market.

I developed a tool as a way of garnering agreement with senior management that we were trying to solve the right problem with our Portfolio Planning Process. So that when we started the Portfolio Planning process we had a revenue target, a resource allocation budget and a risk profile projected forward over the 5-8 year period of the Portfolio Plan. The three dimensional aspect of budget, revenue goals and risk profile will help focus your Product Portfolio Plan on the right targets. With out clear targets you can’t optimize the plan. Don’t underestimate the challenge of garnering agreement on the targets.

Einstein indicated that if he were given an hour to solve a problem he would spend the first 55 minutes making sure he understood the question. Using this methodology will make sure that you understand the question.

The tool is the application of the FMEA methodology into a Monte Carlo method for determining the current assessment of risk in your market, or product segment.

What is a Monte Carlo Approach?

In general, a Monte Carlo approach is used when you have insufficient data to make a definitive decision. But, you need to get started, so you are better off polling the true experts in a field and after their consideration of the issue or problem you accept their consensus recommendation or finding as fact. Validate and adjust your actions from that starting point. Long-term experience suggests that you will be 80% correct, at least this is how I think about it.

A Monte Carlo method is not taking a WAG with three of your buddies. The preferred approach would be to spend a bunch of money, do a ton of research and take several years to figure out your portfolio plan. For companies that are resource constrained or time restricted a Monte Carlo approach, as describe here, is a great first step.

When applying a Monte Carlo approach in determining market risk I have adopted the Failure Modes and Effects Analysis (FMEA) methodology that is used through out the industry in product design. Using a specific and well understood method will help in documenting the process and the findings.

So when applying this method to determine the consensus beliefs about market risks you follow the steps below:

Conducting the Modified FMEA Process

Step 1: Identify industry experts (internal and external to your company)

Step 2: Have them write down the issues that give them pause, cause worry or keep them up late at night, etc.

Issues should be as specific as possible. An example of an issue is: Competitor X will launch their version of your new product Z; x number of months before you.

Step 3: Compile the issues lists and combine where duplicates appear. If you get over a dozen you might want to think about re-writing them to combine a few into a boader category.

Step 4: Create a table that have the Issues listed, any description for clarification purposes and two blank columns titled Impact and Probability of occurance.

Step 5: Assign a 1-5 scale for Impact and a 1-5 scale for Probability of occurance. These scale definitions are critical and a bit tricky to develop.

Step 6: Have the same panel of experts score the issues with the two scales. Each issue is scored 1-5 for impact and 1-5 for probability.

Step 7: Compile the results. Distributions and means. With the issues that have bi-modal distributions you need to go back and have a discussions to ensure that the issues was well defined.

Step 8: Once you have one pair of numbers, impact and probability it is time to plot them on a chart that has impact on the y-axis and the probability of the x axis. Let say that you had 11 major issues identified by your panel of experts. The 11 issues would be plotted as shown below. Note this is an illustration only.

Step 9: This chart will give you your market risk profile. Anything clearly in the red needs to be addressed by some aspect of the Strategic plan and if appropriate the Product Portfolio Plan.

So the three issues that are plotted in the red box, 5 x 5 must be addressed, failure to do so would be catastrophic.

Step 10: Reflect each issue that is in the red, back into the portfolio planning process. This will produce a mitigation plan.

Step 11: Have your expert panel re-score the issues taking into account the mitigations (how you changed the plan or added to it). Plot the new scores. You now have a before and after market risk profile.

Step 12: Once you are satisfied with the new profile, rank the impact that each product program produced. You may have 5-12 product programs that are required to mitigate the risks. Each program could impact multiple risk factors. These impacts should be additive in your prioritization scoring.

Example: Let’s say the issue is an emerging trend toward minimally invasive surgery (MIS) [issue number 2] and you had no products in the pipeline that addressed this emerging trend, currently rated a 4,4 risk score. You added a new product development project to the plan that moved [2] to a 4,1 risk score you have reduced the aggregate risk of this issue by 12 (16-4) a reduction in risk by 12 points. Let say that issue 9 was a lack of product innovation with respect to market leadership. The vision for the MIS project also helped reduce that risk issue as well moving [9] producing a risk reduction of 12 points. When ranking the product dev projects the MIS project would receive 24 risk reduction points.

This ranking will provide one of the three key elements for prioritizing the Portfolio for funding. In the end you will use three ranking scales to rank make your investment decision.

When the portfolio plan is completed you need to make sure you have updated the Market risk profile to reflect the final map based on what was ultimately funded.

Seem complicated? It is at first, once you have done it then you will see the simplicity and logic in it. That is why you must be disciplined in this approach.

Caution: The first time you use this approach do not try to do it alone. There are multiple tricky aspects that might lead you down the wrong road. Call me for one on one coaching or to sign me up to consult you through it.

Make sure you are signed up to receive personal notifications for future post relating to this subject. Download the excel workbook at www.theexperiagroup.com to make your learning a bit easier.

“Experience is what you get, right after you need it most.”

Make it a great day,

Tim Walker

Tim Walker is the Principal consultant for The Experia Group. A small consulting firm that specializes in providing experience and expertise during critical device commercialization phases to increase the probability of success. www.theexperiagroup.com. Contact The Experia Group for a free 30-minute consultation to determine if 30-years of experience can contribute to your success.

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What Potential Acquirers Want Today in the Medical Device Market

July 27, 2016 timwalker317526 1 Comment

The Set Up

Over the past two-years I have had the good fortune to work directly with five medical device start-ups. Through my mentoring volunteer work I have also spent time with seven other start-ups, mostly medical devices.

A key observation for me is that being an entrepreneur is a spiritual journey. It is a calling that you can’t hide from. It is also a journey that you can’t take alone. No matter how broad your background is in all the disciplines of commercializing medical devices you still can’t know it all.

Why? Because time marches on! The experience you may have gain in sales or R&D or mfg. will grow stale with time. The advice you may be getting could be dated. I want you to succeed, so here is what I think you need to realize.

What Has Changed?

From a start-ups perspective, in most cases, the days of bootstrapping a finished product are gone. The need for high energy, high impact launches, and the capital to execute them, all but exclude slow rolling the post-launch of a new product. Why high-energy, high-impact launches? It takes tremendous energy to break through the noise of the big players. Similar to the launch of a space rocket, it takes tremendous energy to break free of Earths gravity.

Take a look at the following chart to see how acquirers have changed their expectations of potential device acquisitions over the last six decades.

A simple story is not enough, a product is not enough. In the decade of the 2000’s potential acquirers want all the risk removed. They only want to have to apply money and their high-powered sales channel to scale success. This means that you have to be prepared to take the device all they way through to commercial success. Commercial success does not mean that a few pioneering physicians have made it work. It doesn’t mean that you completed your clinical trial. It simply means that you have a validated “equation” for successfully selling into the early majority, proof that you have leapt the chasm.

What are the components of the “equation”?

Strong messaging (connects on an emotional level)
Sales process that works (80% of the time)
Believable value proposition
Routine clinical success (utility is delivered w/o a lot of hoops or work-a-rounds)
Clinical and economic evidence packaged professionally
Satisfied customers who are re-ordering

What Hasn’t Changed?

Over the past six (6) decades almost every aspect of commercializing medical devices has changed. The aspects that have not changed are the core principals that I have referred to before.

Engage with you customer
Safety, safety, safety (no short-cuts)
Quality, quality, quality (no short-cuts)
Deliver complete utility with hard value
Make the regulatory bodies your friend
There is no single formulae for success, only guidelines

Take a-way

In today’s world of medical devices, entrepreneurs and inventors need to have a longer-term vision for their companies. The days where a patent, or regulatory clearance will trigger an exit are all but gone. Too often the big players have not realized their hopes for gains from an acquisition. Often because the “equation” wasn’t thoroughly validated in the real market.

The deeper you go into the commercialization process the more help you are going to need. You can’t do it alone. You need a team with skills that are current and relevant.

“Experience is what you get, right after you need it most.”

Make it a great day,

Tim Walker

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Portfolio Planning in the Medical Device Market

July 8, 2016 timwalker317526 1 Comment

The Set Up

Ok, Ok I give up! A number of my colleagues have asked for a post relating to building a Product or Technology portfolio. I have been reluctant to write this post for a number of reasons. 1) every portfolio planning process needs to be customized to the company and the type of products under development, 2) portfolio planning is very complex, and 3) they need to be preceded by a Corporate Strategic Planning process.

I think the best that we can hope for from this blog is to identify some common elements of every portfolio plan, define what one is and provide some cautions to take into account as you develop your plan.

What is a Portfolio plan?

Essentially a product portfolio plan is one that identifies the New Product contribution to the long-term revenue forecast of the company as made by individual product development projects or acquisitions. Typically, you start with either a collection of opportunities that have already been identified, or a set of market conditions that the strategic plan wants to leverage. Add in a set of current performing products and a competitive threat matrix. Stir all this together and then go crazy.

My preference is to ignore everything that has been done to date and start from the output of the strategic plan and identify the areas for investment. Identify the current products that contribute in those areas, identify un-met customer needs from those areas and identify potential products to resolve those un-met needs, then build the plan from scratch.

The goals of the portfolio plan will be driven off of the Corporate strategic Plan. Profit, revenue growth, competitive action, leadership, share dominance, access, and discovery are all legitimate goals that can be derived from the strategic plan. In economic speak the Portfolio Plan should maximize the combined output, X_p; for the minimum investment, Y_p; at the lowest risk, ß_p.

In finance we often refer to a balanced portfolio as a goal. I tend to believe that instead of balance one should strive for harmony. Balance is a precise thing, harmony has some freedom around it. The ultimate Portfolio will hold many assumptions at multiple levels and we should strive to make it as accurate as possible, but it will never be precise.

No project or combination of products is/are without risk. All known risks can be managed. Managing risk takes time and money. Risk is a big concept in the medical device space. So lets be clear, the risk I am talking about is the chance that your total portfolio does not produce your desired outcome, does not meet the needs of the strategic plan and its inherent goals. Lets refer to that as ß_p There are other ways that the concept of risk sneaks into the portfolio plan. Most notably as a discount factor for the revenue generation of each opportunity that ultimately will be combined to produce the Portfolio Plan.

The Steps in Building a Portfolio Plan

For me:

Step 1 – Read and understand the strategic plan. (Pull out the explicit and implicit measurable goals from the plan)

Step 2 – Interview all the senior managers that were involved with creating the strategic plan to make sure you have a feel for each of their visions for the portfolio

Step 3 – Create a heat map of market and competitive risk, basically a FMEA assessment of your SWOT analysis that should come from the Strategic plan

Step 4 – Create a matrix of segments that the strategic plan identifies that you want to be in, enter or exit.

Step 5 – Survey the clinicans that are the key users or drivers of/in those segments

Step 6 – Identify the opportunities that exsist.

Step 7 – Have teams create an opportunity assessment for each opportunity.

Step 8 – Score each opportunity in terms of it contribution to the objective for that segment that was identified in the strategic plan.

Step 9 – Score each opportunity in how well they reduce risk identified from the heat map.

Step 10 – Score each opportunity by the cost of realizing that opportunity.

Step 11 – Either use a discount factor to fold in the risk of success or failure of the project ( Innovation, core competency, speed, timing, competitive development)

Step 12 – Using the four scores force rank the opportunities separately, so that you have a list that is ranked by score 1, score 2, score 3, score 4 Typically, the high impact / low cost ones will be at the top. Those at the bottom of all four scores are usually out. It is the middle ones that require some discussion.

Step 13 – Allocate the New Product budget to each of the opportunities and see how far down the list the money will go. Ask two questions if we execute this plan will we achieve the strategic intent of the company? Is our portfolio plan in harmony with our willingness to absorb risk?

Last step – Vet the plan with the bosses, dispassionately.

Cautions

The development of a portfolio plan is not an engineering exercise, it is a social-science experiment. An experiment with significant political implication.

Each opportunity must be assessed under a strict set of guidelines. Inconsistency in the approach and definitions will invalidate your portfolio plan.

Marketing can not do this process alone. It must be a team effort between R&D, NBD, Up-stream marketing, finance and operations.

Document in a very obvious manner all the assumptions that are used. Independently vet the assumptions to ensure that everyone is OK with the assumptions and confidence you have in your data. If they are not ok with the assumptions, stop and develop a plan to move the assumptions to facts.
It will be difficult, but don’t take it personally, any of it.

If your organization is not willing to allow the time and dollars to develop a great portfolio plan then you are better off getting the most informed opinions in a room and make the call without data, a modified Montecarlo process.

A portfolio plan needs to be reviewed constantly and changed seldom.

Why do I need a Portfolio Plan?

The life blood of the medical device market has been a continual stream of new products. In todays environment the commercialization process will require 2-5 years from start to finish. If you don’t have a well thought out plan you are already behind the time curve.

At many Med Dev companies the goal is launching a new product every year and a new platform every two-years. If you can accomplish this goal you are on your way to sustained growth, if they are the next right projects. A well thought out portfolio plan will drive your M&A activity as well as R&D. If you as a Marketing organization have effectively laid out where you need to go to accomplish your new product revenue goals, you put yourself in a leadership position and if done well you are moving your organization to be a market driven organization.

Final Thought

A well done product portfolio plan that is in harmony with the strategic plan gets the entire organization on the same page. Having the assumptions well understood and monitored will provide an early warning system if changes are required.

The last thing any organization needs is a whip saw effect in new product development.

“Experience is what you get, right after you need it most.”

Make it a great day,

Tim Walker

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Minimum Viable Products in the Medical Device Market

June 22, 2016 timwalker317526 1 Comment

The Set Up

I was speaking with a prospective client recently. He wanted to know if I could help him define his MVP. MVP stood for Minimum Viable Product. A term he had picked-up at a lean start-up seminar. I told him that I could do that, if that was what he really thought he needed. I left him with a couple of questions and we agreed to meet again to discuss what it would take to define the MVP for him.

I asked him, “What was his objective of using the MVP style product devlopment process?” His answer was, “I can’t afford to solve the whole problem, this way I can get something out generate sales so I can afford to solve the rest of it.”

The second meeting took over an hour and as hard as I tried I couldn’t get him to stop calling it the MVP. It set me to thinking about the term and the product that would result. Initially, I thought that I was just getting hung up in the words, (as a personal note I am trying to eliminate my need to be right). So we laid out a plan to define the first of a multigenerational product development plan for his platform technology. He was delighted.

What is Meant by MVP?

When Eric Ries used the term for the first time he described it as: “A Minimum Viable Product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”

My client had gotten the impression that the goal of an MVP was about generating early revenue. Early revenue is a by-product. Nowhere, does Mr. Ries bring money into the picture. Validated learning is the goal of the concept. In the MVP concept, validated learning implies a real life use experience.

The Caution

We have to be careful when extending management (marketing) concepts a cross markets and industries. While there is a huge opportunity to learn from concepts formulated in other markets, sectors, industries and disciplines we can’t assume that they can be directly applied. We have to be good Marketers and review all the assumptions and environmental consideration and then apply them in our context.

We have seen where the application of Software or App development thinking has failed in the medical device space. How one manages the risk of failure is very different when the result is death or serious injury vs. being disappointed. MineCraft, the now very popular video game was launched commercially after only six-weeks of development and was barely functional. It was however a great application of MVP. It served as a proof of concept.

The risk of failure in MineCraft did not include death or serious injury to a real human.

The Concept

In Medical Device Commercialization, launch MVP is not an appropriate approach, unless you redefine viable to have a really big meaning. For med device dev. we should think of “complete clinical utility” (CCU). We can use a modified concept of MVP to get us there. But if you do not deliver “complete clinical utility” at the time of launch you have delivered no real value to the clinician. By all means leave the sprinkles and glaze off, but give them a whole doughnut.

A Different Way to Think about MVP

Fully integrated multi-generational product planning. A documented, data driven, customer focused pathway to delivering 100% customer satisfaction in steps. This type of plan can span decades as with the Left Ventricular Assist Devices (LVAD). Or, it can take just a few years as with the SMART Stent.

Back to the Story

Call it what you will, MVP, CCU, multi-generational planning it doesn’t matter. The basics of product marketing need to be satisfied. Product requirements need to be written. Target the Complete Clinical Utility of the product first. Use the MVP concept during the concept phase.

“Experience is what you get, right after you need it most.”

Make it a great day,

Tim Walker

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Writing a Great New Product Launch Objective for the Medical Device Market

May 27, 2016 timwalker317526 6 Comments

The Set Up

If you are a reader of this blog, then you have heard it before all Marketing Strategy development must start with a clearly stated objective. Preferably one that links directly to the Corporate strategic plan. The richer the objective then the more right on target the strategy will be.

Poorly Thought Out Marketing Objective(s)?

Dominate the xyz segment.
Destroy the competition.
Go to number one in unit share for the xyz product class
Reach $100,000,000 in sales by January 20xx.
Enter the XYZ product segment in North America, while achieving a 76% GM on all sales.
Must be successful in 200 accounts by Christmas (Which Christmas? and What is successful?)

You may have received marching orders like these before. Why are they not actionable? They don’t provide any insight into why, how, or how not to accomplish the goal or objective. They are all two general. It is a delicate balance between being perscriptive and too general.

At the very least make your objective(s) or goal(s) SMART ones.

S – Specific

M – Measurable

A – Achievable

R – Relevant

T – Time-bound

Your SMART goal(s) should include some of the following characteristics of a launch:

Quality
Timing
Cost
Adherence to plan
Share (dollars or units)
Penetration rate
Repeat orders
Customer satisfaction levels

Make all definitions as specific as possible.

Great Marketing Objective(s)

The objective for the launch of our newest widget is to be the first to enter the growing North America segment of xxxx therapy, to grow revenue in the over all xyz business and provide a full product line. Hence, blocking any in roads ZZZ competitor might make with their widget expected to launch 6 months after our widget.

Penetrate 22 targeted Pioneering and Early Adopter accounts within 3-months post launch.
Establish an overall successful close rate of 85%.
Achieve a 95% re-order rate for every account closed within the first 9-months post launch.
Average cost to close a targeted account should not exceed $1,000.
Realize $25 million in new sales within the first 12-months post launch.
Cannibalize no more 10% of the existing Xwidet and Zwidet sales.
Every representative or agent engaged must close 2 accounts within 6-months post launch.
Clinical/technical success will match the clinical/technical success rate of the pivotal trial results as reported at XXX conference.
On time delivery of product 98% orders in by 3PM EST shipped by 5PM EST sameday.
100% of product complaints are filed within 12 hours of first notification and are investigated within the second 12 hours.
Product return rate will not exceed 2% of units shipped within the first 6-months post launch.

Internal Validation of Integrated Goals is Critical

If you develop a weekly dashboard you can monitor the progress toward each of these goals and act accordingly. But please internally validate the legitamcy of the goals. As an example, could 22 accounts produce $25 M in revenue? Did your soft launch suggest that you could achieve an 85% close rate? Is there enough accounts that you can win in 22 of them and not cannibalize more than 10% of the other product sales?

If you spend a week developing the right goals to match with your objectives it is more than worth it.

Once you have the objective the way you want it and it is approved by Sr. Management, then you can design your strategy to meet the critical aspects of the objective and your tactical plan will have met all the criteria that you need.

“The way to achieve our goals is to hold them tightly and our strategies [tactics] loosely.” MEGAN HYATT MILLER

“Experience is what you get, right after you need it most.”

Make it a great day,

Tim Walker

Contact us to schedule an initial call to see how we can apply our 30+ years of experience to your issues that are preventing you from being successful. www.theexperiagroup.com.

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Channel Selection Considerations for Getting your Medical Device to Market

May 16, 2016 timwalker317526 1 Comment

The Set Up

If you are in a large organization, usually you don’t get an opportunity to be to creative about your go-to-market strategy. You probably have a process built into your quality system that defines the launch process. You have a well developed direct sales organization that is already in the field selling your other products.

If you are in a start-up, a recent acquisition, or on a “skunks work” project, then you may have more freedom to change the default channel.

If you have been in the industry for a while, it is only natural that you have engrained or default thoughts about your approach to building a channel; yet, there is nothing inherently wrong with using your default position.

Take a moment to answer the following questions:

Is the new product that you are readying for launch significantly similar to the previous products that drove the channel and process creation?
Is the enviornment exactly the same as it was during the last successful launch? Competition? Reimbursement? Regulations? Customer?
Are the objective(s) for the launch of the new product the same as all the previous launches? Timing? Growth? Revenue? Impact? Value? Price?
Is top management pleased with the results from the most recent product launch?
Has your company effectively launched a product that faces the same channel challenges as this one? Practice development? Market development? IDN contracting? Complex referral patterns? Capital sales? The need for service? A new type of value proposition?

If you answered YES to every question , then there is a good chance using the default position will be successful. If you answered NO to any ONE of the five questions, then it may be time to look at your default thinking or internal bias If you answered NO to more than ONE of the five questions, then you should think through your default position.

“What worked yesterday doesn’t always work today” [or tomorrow] Elizabeth Gilbert.

The Story

I recently attended the Society of Interventional Radiology meeting in Vancouver, B.C. (SIR2016) and I saw many old friends there. One particular colleague and I had a rather deep and fun discussion about a decision that he made relating to the channel for a new product that he recently launched. Prior to the launch, we did not discuss his preference to launch a new product using a stocking distrubtor network within the US. After experiencing quick initial sales growth in a very short period of time (1 year post launch), the growth crashed. His investors were very pleased as they saw quick, positive results; however, were now dissapointed. He wanted a second opinion on what went wrong.

What Went Wrong?

To diagnosis what went wrong with this launch, we need a significant amount of information. Read, “Conducting an Autopsy for Medical Device Launches that are Heading South” a previous blog posting. Skipping a head to save time, the issues fall into one of six broad headings: product, price, promotion, place, customer, or competitor.

The issue with this launch was the channel decision, and contributing to that, an un-realizable objective. We will explore what a good Launch Objective looks like in a future post.

This post identifies some of the key elements that need to be reviewed when working through the critical questiosn of: which channel is used, and what is the right channel for your new product. I have created a worksheet table that I use to think through channel selection. The components that comprise the table are listed below with brief descriptions.

Control – The more discipline that is required in message adherence, process and/or targeting of the selling organization the greater the need for direct control

Coverage required – This is a tricky one. Coverage requirements are driven by many variables: speed, geographical dispersion of the target customers, growth requirements, etc. This variable is very tied to the revenue objective.

Educational challenge – The more foreign the concepts are to the channel, the more education is required.

Specificity of customer targeting – The fewer customers that fit the target profile, the more lazer-like your focus must be. More like firing a rifle as opposed to a shotgun.

Device complexity – Complex devices require a mastery by the channel such that the customer doesn’t perceive them as complex.

Clinical success – It goes without saying that repeat sales are a requirement, early clinical success is critical to ongoing sales.

Validated messaging – The more sure you are of the messaging, the more structured and perscriptive you can be in the sales training.

Sales-cycle dynamics – Long, complex, sales processes that involve multiple influencers and are required to go to value analysis committees require a significant investment by the TM.

Price point – The higher the price, the more trust is involved in the relationship.

Type of selling style – Concept selling, missionary selling, F&B selling, commodity selling all require different skill sets.

Tap on chart to enlarge

Each of the above characteristics of the product or market aligns better with one of the seven channels.

What are the possible channels for US marketing of a Medical Device?

Direct sales
e-commerce
Independent representative (agent)
Stocking distributors
Non-stocking distributors
Strategic partner(s)
Hybrid/combination

For our case study, the description of the market and product are as follows:

Very simple product
Very simple procedure
Utility is realized by three stakeholders
Product ordered by only one stakeholder and they receive the least utility
An emerging therapy
Not too difficult to achieve clinical or technical success for one of the influencer (learning curve is three supervised uses)
Proven to be difficult to get repeatable results for those who receive the most direct utility
Multiple influencers with above 20% influence
Device cost in excess of $800.00 USD
Reimbursement is available but does not cover the use of two devices
Maximum single user experience in a 12 month period is current 10 patients
Concept sale required
Messaging is evolving
Long sales cycle (up to 120 days)

Back to the Story

So, what happened in my friends launch scenerio? He focused on sales and not usage of the product. He filled the stocking distributors channel and showed quick success. The stocking distributors were scoring a bunch of initial usages. He labeled them the “one and dones”. The problem was that the initial users were not experiencing clinical success with the product.

So backing up in time, if we ask what was the nature of the challenge in selecting the “Best Fit” channel it was that the Marketing Objective had a revenue target that was, in the mind of my friend, unattainable without 20 direct sales persons. He had been given a budget for channel development. The budget and the needed coverage were at odds. Instead of challenging the objective he went for the largest coverage area he could within the budget he had been given. A stocking distributor model. He rationalized away that this product was a concept sale with a long and complex sales process. The messaging wasn’t validated. The targeting was not specific and it was difficult to achieve clinical success all the time.

Given this scenario, the obvious design was a Direct Selling organization. The time to have your investors embrace this is before you execute an alternative approach. Minimally, they have to hear your reasons for one channel over another. If they still direct you to use a lower cost channel model, then lower the forecast. Often, it is best to set up the alternatives before hand. For example: “ If we go Direct with this number of TMs, our revenue curve is predicted to look like this”. Or, “If we go with a Stocking Distributor network then the revenue curve will look like this”.

Had we used the decision template, we would have understood that even though this was a simple product the other variables combined to require a Direct Sales model.

Hint: it cost $250,000 to bring on and train a Direct sales person. It takes even good TM’s 3-6 months to be effective in a territory with a new product.

My friend went back to the Board of Directors and gave them a complete assessment of the state of the sales process using factual data. They authorized him to create a direct sales organization. Time will tell if they have enough money to make the change over. Strange how we can always afford to do things over but never seem to have enough resource to do it right the first time.

Lessons

There is always time to think things through.
Use a structured thought process to avoid bias and default thinking.
Choose the right metrics to monitor your early success.
The tough discussions need to happen early.

“Experience is what you get, right after you need it most.”

Make it a great day,

Tim Walker

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Social Media and Medical Device Marketing

March 24, 2016 timwalker317526 2 Comments

The Story

A good friend of mine called me and started asking a lot of questions about the use of social media in medical device marketing. It seems that his VP read an article on social media and wanted an assessment of how i it would benefit their big product launch that is scheduled for 6-months from now.

We spoke for an hour and I truly felt bad for him. He interpreted his bosses question as an order to utilize social media.

Keeping Things in Perspective

Social media is a very power tool. In and of itself it is not a goal. When some one tells me that they need social media I often ask why? Not that I don’t believe in the power of social media, I do, but if you can’t tell me why you need social media there is a step missing. All marketing actions need to begin with a goal or objective, a strategy to achieve the goal and then followed-up by a series of tactics to realize the goal aligned with the strategy.

The Goal is Customer Engagement

Customer engagement is one of those objectives that should be obvious to everyone, but it is not. It is well worth adding a section to your launch plan titled Customer Engagement, outline the detail about how, who, when and why the engagement will occur. Please remember to calculate the cost!

Methods of Customer Engagement in Medical Device Marketing

Customer engagement has been happening since the first medical device was invented. It is nothing new. It is ever increasing in importance and sophistication, as there are new messaging channels and technologies for conducting the engagement. No one set of tools is optimal for any one market, segment, customer or product. You need to customize your plan. Don’t fall into the trap of being a hammer, and everything looks like a nail. Choose the right tool for the job.

The following list identifies a number of engagement approaches:

Key Opinion Leader involvement
Speaker’s bureaus
Hand-on workshops
Tradeshow events (training, contests, quizzes)
Blogs that encourage feedback and discussion
Chat rooms
Panels
Webinars
Social media pages that are interactive
Plant tours
Direct consultive selling

You note that advertising, selling, telling, You-Tube videos, e-mail blasts, Internet messaging are not on the engagement list. There is a fundamental reason for that.

Customer Engagement Defined

Customer ENGAGEMENT is a real time, active, two-way exchange of information, feelings and thoughts that afford participants to deepen their understanding of each others needs, wants and desires. To further invest in each other!

“Consumer Engagement may be a broad topic, but it’s the lifeblood of any sophisticated marketing organization’s strategy. We define consumer engagement as the interactions between a brand and it’s customer. These interactions can – and should – happen simultaneously across multiple online and offline marketing channels. Skilled marketers can guide this engagement to serve their business needs, while also providing consumers with an authentically enjoyable experience.”¹

If the right vehicle for that engagement includes social media or digital marketing then go for it!

How Does The Story End

My friend took a breath and revaluated the launch plan. He added a section (3-slides) on customer engagement. He correctly identified that the broad-based social media effort was not the right approach for engaging Pioneers and Early Adopters. He did identify a strategic intent to capture the engagement with Pioneers and Early Adopter and create an opportunity to “report” out that progression to the Early Majority users.

He added a tactic to his plan a tactic to create a private chat room (password protected, non-public access) for the “soft launch” users to exchange experiences with early use experience. Part of the plan to promote distance engagement called for a discussion forum every two weeks via a virtual meeting room, where engineers, marketers and clinicians could relate user successes and issues. I did recommend that a Quality representative attend to assess in real-time if a complaint needed to be filed and to record any and all clinical suggestions that might be proposed by an engineer.

An incredibly smart move on his part was to hire a digital marketing (DM)/social media (SM), consulting firm to review the engagement strategy and educate him and his team in where DM/SM might add value. The mission is to optimize an integrated launch media strategy in time to convince the Early Majority users to leap the “innovator chasm”.

Selling the expense for the consultant was easy. He presented it as way to increase the competency of his marketing organization, making sure that the tools available in the 21^st century were appropriately applied, exactly what his VP was after.

[1] https://www.offerpop.com/definitions/what-is-consumer-engagement/

“Experience is what you get, right after you need it most.”

Make it a great day,

Tim Walker

Tim Walker is the Principal consultant for The Experia Group. A small consulting firm that specializes in providing experience and expertise during critical device commercialization phases to increase the probability of success. Contact Tim for a free 30-minute consultation to see how he can contribute to your success at www.theexperiagroup.com.

Uncategorized

State the Opportunity Size with Integrity, Medical Device Marketing

March 14, 2016 timwalker317526

The Story:

I just completed teaching a Marketing Management course at the MBA level. In the same time frame I was working with a start-up medical device company advising on their investor deck. I reached a common realization. There is a natural tendency to inflate market projections by capturing every conceivable dollar potential worldwide. There is nothing unethical or morally wrong in putting your absolute best foot forward, but there is no value in inflating the opportunity.

My professional opinion is that the revenue or potential opportunity you quote must be congruent (Walker’s Law of Congruency illustration below) with your overall story and plan. Angels, VCs and VPs of Marketing are too savvy to be drawn into an overstated market potential.

It is better to progress the story through the fair market potential to the realizable potential, quickly and then tell your story (plan) and state the five-year revenue forecast, then dwelling on a fantasy.

If your story doesn’t sound like it is worth it, or, if it doesn’t deliver on the expectations of Senior Management don’t fudge the model, change the story.

Over the Top Market Assessment

By over-the-top I am referring to the fact that every marketing plan I see states that the product represents a billion dollar opportunity. Not every marketing plan does have a chance at reaching a billion dollars and that is ok. If is does, it might be well beyond the timeline for a needed return.

Realizable Market Opportunity

In general, there are exclusions from the Grand market that are driven by the nature of your product. If the product has a narrow indication or is a line extension it probably will not be worth a billion dollars ever. It may be the first of five applications needed to reach full potential. It is not productive to spend a disproportional amount of time explaining the grand potential, mention it and move on to your story. As much as you would like to think that the most important thing to the reader is the huge market opportunity, it is not.

Most humans are risk adverse. They would rather see a tight story as to how you will realize the revenue forecast than create a dreamscape for the future.

Targeted Market Opportunity

I read with delight as a student defined the nature of the customer segment that they believed they would be successful with or in. By having a customer target, which you should have, you exclude a section of the Realizable Market Potential. If your segment represents only a quarter of the realizable potential then reduce that number by 25%.

Revenue Forecast

Once you know the Target Market Potential you continue to discount your potential for factors such as:

Competition
Capacity
Market attractiveness (Did the product end up with the features and benefits you had hoped for?)
Channel leverage
- The number of outlets
- The number of direct sales representatives
- Access to the targeted customers
Launch timing
Environmental barriers

Last but not least you need to have a beta factor (ß) a final reduction in your target market that represents the unknown and the unknowable. How do you calculate this last discount factor? You look to history either internal or external to your company. How accurate have your prediction been in the past. Do you have positive or negative reasons to believe that you will be as accurate this time?

Typically, the revenue forecasts are seldom realized. Of the 100+ products I have launched more of them under perform, in the first year, than over perform. After 30 years of product forecasting you would think that I could get the first year launch numbers correct. But there is always the unknowable and the X factor. The X factor is the political (not always bad) aspects of revenue forecasts. Typically, there is what you believe and then what everyone else is willing to bet on. Plot your actual performance against both numbers and learn.

Remember that your marketing plan will move through the project with you. At each step you need to add credibility by validating any and all assumption you have baked into the story. (E.g. the first version assumed that R&D would delivery on the utility that you wanted to commercialize. Some subsequent revision will account for whether they did or did not).

Note: The challenge to increasing accuracy with time is keeping the caveats and assumptions clearly in the mind of top management as decisions are made. I have been in many discussions just before launch where a Sr. Manager reminded me that my original forecast numbers where much larger than they are now at launch. You need to be prepared to answer that challenge without throwing the manager or the team under the bus.

“Experience is what you get, right after you need it most.”

Make it a great day,

Tim Walker

Uncategorized

Assessing Opportunities in the Medical Device Market

February 29, 2016 timwalker317526

The Story: I attended a recent Med Device investor conference and was approached by a colleague who had been following my blog for a year or so. I’ve known this gentleman for over 20-years, but had not spoken with him in quite a while. He asked when I was going to post something about doing Opportunity Assessments.

It is funny how people pigeonhole you into different skill sets. He remembered a Market Assessment I had done in the 90’s that apparently impressed him. I have done so many assessments, both Product and Market that I had to look it up. I was humbled by the fact he remembered it.

A second gentleman that was at this same conference remembered me for the way I developed a Product Portfolio, he asked when I was going to blog about that topic. Again I was humbled. This guy is as sharp as they come.

Both topics are huge in scope. This post will set up some thoughts and definitions; I will follow-up with a more detail set of posts over the next month or so.

Opportunity Assessment defined: An opportunity assessment is the systematic, fact based, analysis of the market and/or product variables and assumptions that are used to determine the future financial viability of a given “Opportunity”.

Portfolio Plan defined: The Portfolio Plan is the resultant of a systematic decision-making process that combines a series of investment options (opportunities) into a strategic investment across time. When the opportunities are combined they will optimize that investment against a strategic objective set forth by senior management, hopefully that came out of a formal strategic planning process.

Connecting Opportunity Assessments and Portfolio Planning: You can create an Opportunity Assessment completely independently of portfolio considerations. But to do a serious Portfolio Plan you can’t do it without a series of valid Opportunity Assessments. To facilitate a defendable Portfolio Plan you have to make sure that the methodology used to develop the Opportunity Assessments is consistent and not based on opinion.

Side note 1: Even if your organization uses M&A activity to build the Portfolio you still need that Opportunity Assessment. You might just call it Due Diligence. Take care to ensure that all departments use the same Opportunity assessment rules and validation requirements.

Side note 2: Depending on how your organization is structured, you will more than likely need to build the assessment in tiers of certainty. Some of the work takes resources and if you don’t have the resources you need then you will need to convince someone that the opportunity is worth looking into. Think about the following flow:

Vision
Hypothesis
Preliminary
Verification
Validation

What does a good Opportunity Assessment look like? It all starts with defining a problem in a specific therapeutic area or market. Opportunity identification is a whole different topic. For this post I will assume that the problem has been identified.

So the key questions that must be answered are:

Is the opportunity real?
Is it worth going after?
Can your company win, if they go after it?

A NO to any of these basic three questions suggests that it is not viable, for you. Of course everything has many shades of gray and all assessments are nuanced by political, economic and time frame realities. So I will write from a simplified dogmatic position. Take it for what it is worth to you.

Is the opportunity real? There are two parts to this question. Is the problem real? Is the solution real? To answer these questions you must have a clear understanding of the un-met need. You must also have a reasonable belief that full utility can be delivered via the final product design at a cost that is affordable.

Side note 3: A mistake that often occurs is that someone sees a problem and assumes that everyone must see, have, or suffer from the problem. This is seldom the case. A measured assessment of the size of the opportunity is step one.

Side note 4: In almost all cases the problems are already being solved or mitigated today, somehow to some extent. Don’t discount the value of understanding how this happens. In a latent need these substitution solutions maybe your largest competitive hurdle.

Is it worth it? This a unique question that each organization will answer differently. Depending on your grand objectives that have come down from the Strategic Plan there maybe hurdle rates that must be met even to be considered as a viable opportunity to be considered.

In general this is a financial/strategic question that requires a number of models and market/segment/solution assumptions to be made. The more informed these assumptions are, the better the decisions will be.

Typical you will need:

A disease model
A market model
A set of explicit solution assumptions (validated to your comfort level)
A set of explicit market assumptions (validated to your comfort level)
A set of assumptions about the success of your product solution (validated to your comfort level)
Cost of developing the product
Cost of launching the product
Sensitivity analysis of the revenue and profit models
A discount factor is developed (probability of success on all fronts)(project ßeta)
A pricing model
A business model to deliver long-term success
NPV
IRR
Payback period
Strategic value (risk reduction, critical growth objective, etc.)

Side note 5: If, you are going to use this as one of the opportunity assessments in your portfolio planning process, then the there needs to be a pre-set standard quality level for validation of assumptions.

Can you win? This question is primarily an assessment of your internal capabilities and resources. Some of these questions feedback to the “worth it” question. For example, if you need to acquire or invent a new technology to provide an effective solution then you need to make sure the cost of invention or acquisition are in the financial models and it could well impact your discount factor (project ßeta).

Do you have, a cross all functions:

The right people?
Enough capital?
Enough cash?
The right sales force?
The right knowledge?
The right management control system?
The right distribution model?
Access to the right KOL’s?
The right vendor base?
Enough mfg. capacity?
The proper internal systems? Etc.

For any sub-point no, you may plan to acquire the missing aspect that lead to a no; just make sure you discount the probability of success and account for it’s cost.

When you bring it all together the high level scoring is simple, if you don’t have yes, yes, yes, than move on. If you have some narrowly classified no’s, you may want to move to a higher level of accuracy (refer to note 3 above). Just remember that the goal is to eliminate the losers and select the winners. Make a decision and move on.

“Experience is what you get, right after you need it most.”

Make it a great day,

Tim Walker

Uncategorized

Creating Customer Profiles for the Medical Device Market

December 3, 2015 timwalker317526

The Story

The project I am currently working on for a client will go much quicker if I follow my own advice and take care of the basics before creating final field facing messaging. I consider writing customer profiles or personas as one of the most important aspects of marketing fundamentals.

Once you have identified all the influencers in your buying decision the next step should be writing the personas. Without the personas you can’t develop a segmentation or targeting strategy. Without segmentation and targeting you can’t really develop positioning statements or value propositions. This is why the customer profile is a basic building block. Combined with your environmental scan you will have the fundamental inputs to developing the rest of the S-T-P marketing fundamentals.

Customer Profile Defined

A customer profile is a one-page document that describes the psychosocial aspects of your targeted customer group. Specifically, it will include the following elements: demographics, psychographics, behaviors, media preferences, influencers, preferences and environmental/organizational constraints.

Psychographics

Are they anything like demographics? Sort of! Demographics explain “who” your buyer is, while psychographics explain “why” they buy. Demographic information includes gender, age, income, and marital status – the dry facts. Psychographic information might be their habits, hobbies, spending habits and values.

You can only effectively reach your target audience when you understand both their demographics and psychographics. The combination of both sets of data starts to form your buyer persona – a detailed picture of the people you work with now, and would like to work with in the future.[1]

Why are these profiles so important?

In a crowded field you must constantly look for leverage, something that will give you a leg up on the competition. Understanding your customers at a deeper level than competition will give you that leverage. It might lead you to align your product with a select group of customers. It might cause you to use colors and language that are more appealing. It might mean that you hirer different types of salespeople. Even if you can’t spend the market research money to do this exercise in a systematic method, it is worth doing! Treat the first draft as a hypothesis! Come back to that draft after every significant customer interaction to see if you have confirmed or rejected an aspect of your profile.

Here are a few simple steps in creating a good profile

Describe your customer

Demographics
Psychographics
Behavior
Language preferences

Locate your customers

Where do they hang out?
What do they read?
What do they watch?
How do they learn?
How do they communicate?
Who do they admire?

Understand their buying practices

Where do they begin their research?
How do they receive the information they use in device selection?
What is their problem?
What benefits will you provide if you solve their problem?

Understand your current customers

Why did they original buy from you?
Why do they continue to buy?
Why didn’t they buy from you?

Write your first draft of the persona/profile

Write one per influencer.
Use names to give them life.
Look at the intersections for common elements.

Test, Test, Test your beliefs

You must find a way to validate your personas. Market research is the obvious choice, unless you don’t have the cash to pay for it. Then you have to use time and touches.

Tip

There is no such thing as an average customer! It is ok if you have to breakdown the persona into subgroups. I call these Archetypes. Your leverage will be greater if you find multi-modal conditions. Use of the mean/average is something that will lead you to being an average marketer.

“Experience is what you get, right after you need it most.”

Make it a great day,

Tim Walker

[1] http://blog.hubspot.com/insiders/marketing-psychographics

Medical Device Marketing Insights

Tag Archives: Medical Device Marketing

Market Risk Identification in Product Portfolio Planning for the Medical Device Market

What Potential Acquirers Want Today in the Medical Device Market

Portfolio Planning in the Medical Device Market

Minimum Viable Products in the Medical Device Market

Writing a Great New Product Launch Objective for the Medical Device Market

Channel Selection Considerations for Getting your Medical Device to Market

State the Opportunity Size with Integrity, Medical Device Marketing

Assessing Opportunities in the Medical Device Market

Creating Customer Profiles for the Medical Device Market

30 Years of Lessons Learned