How to drive a successful pricing initiative in the MedTech industry (part 2)

Practitioner Point of View:

Marc Konieczny started his sales and marketing career in medical supply industry after his PhD (Natural Sciences) in 2000. Until 2003, he was product manager at Becton Dickinson (BD), Diagnostic Systems for Eastern Europe/Middle East/Africa (EMA). Until 2008 he took over increasing responsibilities in Marketing and Sales in EMA and Germany, Austria and Switzerland (DACH), respectively. In February 2008, he decided to leave BD for B.Braun Melsungen for development challenges in Marketing and Sales for Hospital Care (HC) division. Until 06/2013 he was Global Pricing Manager within HC Global Marketing and Sales. Today, he is leading the sales management team for Abbott Medical Optics (AMO) focussing on Cataract Business in Germany.




A couple of weeks ago Marc shared the 1st Rule of the game when planning to initiate and successfully drive a pricing initiative in the MedTech industry.  Today he sheds some light on his 2nd and 3rd rules.

Cuts in healthcare budgets, low-price competitors and increasing power of purchasing organizations increased the pressure of many medical device suppliers on their prices and margins. After having gone through a number of cost reduction measures, many companies become aware that pricing is a by far more effective lever for sustainable profitable growth.

In this series of five blog posts I like to highlight five important rules that should be considered when leading a corporate and/or local pricing initiative(s) and working towards the desired increase in profit.  Read rule number 1 here.

RULE No. 2: BUILD A STRONG COALITION OF LEADERS

• Take the time to get to know the stakeholders, as well as possible, e.g. you need to know what lives in the "heart of the battle". Be aware that mutual trust is the basis for good relationships, openness for change and real engagement. 
• Select only the best people for your project core team. Do not compromise and implement unpopular decisions fast. 
• Establish decentralized structures and delegate responsibility, e.g. one sub-project leader for each area of the price waterfall. 
• Take enough time for your internal network, national and international. Identify and build relationships to all positions and stakeholders that might be important for your success. 
• Top management support is absolutely essential for the project success. They need not only commit the necessary resources but also actively initiate and support the project further on, e.g. when entering new regions or country organizations. Detailing a project plan including concrete and company specific business cases on the basis of a first analysis will help to get them convinced and should be part of their active communication about the impact of pricing on profit and performance later on. Presentations at conferences or internal webcasts might be appropriate settings for this initial communication to the top management.
• Make sure that your sponsor and your boss are always 100% behind you.

 

RULE No. 3: DEVELOP A STRATEGY AND IMPLEMENTATION PLAN TOGETHER WITH YOUR TEAM AND COMMUNICATE WITH THEM AGAIN AND AGAIN

• The change process needs a clear direction. Build a custom-fit strategy for the implementation that does not only include targets but also components of behaviour. Integrate employees and key partners in this process and do not create a strategy in an ivory tower. Use different media and take all possible opportunities to communicate the strategy. This helps to ensure that employees identify with the new direction and a helps to avoid a bad implementation experience.
• Communicate important milestones of the project plan for the beginning. Realize short-term successes, communicate and celebrate them. 
• As example, when replacing a volume by a profitable growth strategy let your people work out different scenarios how to go forward, let them understand how they concretely impact their future success and income. Let them work out the argumentation details towards the customers so that the external communication is thought through and supported by all people. Communicate the status of the initiative constantly using established internal communication moments such as meetings and newsletters and collect feedback constantly thorough personal communication with the people. For internal reporting and feedback use established tools such as your CRM system and avoid reinventing the wheel.  There is no need to build up sophisticated new project-dedicated tools, if these exist already. 

Dr. Marc Konieczny is a speaker at the 2nd Annual DACH Chapter Workshop to be held in Düsseldorf on Thursday, 19 September.  The language of this workshop is German.  Register before 6 September t to benefit from the special rate of 195 Euro instead of 290 Euro.