How to drive a successful pricing initiative in the MedTech industry (part 3)

Practitioner Point of View:  5 things to do, to ensure success in your global pricing initiative, in just 100 days!

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.

Marc has a number of successful pricing initiatives under his belt and will share his 5 rules to ensure success with the 32 attendees of tomorrow's Pricing Workshop in Düsseldorf (organised by EPP and the DACH Chapter Board).  You can read his 1st, 2nd and 3rd rules on the European Pricing Blog.  This blog post highlights the 4th and 5th rule to apply in order to see a positive effect in your profit after only 100 days!

RULE No. 4: Focus, focus, focus is the basis for success

Make sure that all people know which goals and projects are essential for the success of the company and which are "nice to have". Too many parallel projects and multi-tasking are often cited as a reason for inefficiency and for failure of change projects which were initially announced and received very "euphorically".

Start by focussing on a pilot project that will be accepted as a good showcase for others later on. Choosing a pilot country/division to initiate a project will not only gather experience in the respective country/division but also lead to a customised company-specific approach that can be used as a template for the later roll-out.  The right decision on the pilot country/division is crucial for further success.  The following checklist might help:

  1. Does the country/division contribute significantly to the revenue share?
  2. Is there a real need identified for a pricing improving initiative?
  3. Does the management of the country/division realise that there is a need to work on the pricing?
  4. Are there sufficient resources and capabilities available?
  5. Is the management fully supporting this approach and will they actively promote the successful completion of the project in the future?

The pilot division's success significantly depends on the engagement of the local/divisional management in allocating the resources, providing the necessary leadership to the team and convincing the organization of the value of this project even though there is a high likelihood of extra-work and high pressure to succeed. For the management itself, it might be not only a lever to increase performance and profitability but also a great opportunity to position the pilot division's organisation as a model for the entire organisation.

Once the project is initiated, start with an analysis phase to identify the market/division-specific profit waterfall leakages.  This will help you to decide where to focus and shed light on where new concepts, e.g. a new pricing system, might be needed. Make sure that you always keep to the 80:20-rule : do not invest to much resources in "academic" analysis and details - only enough to show the people in a convincing and pragmatic way how to go forward successfully.

RULE No. 5: Create the mindset and momentum for the necessary change by allowing self-responsibility and freedom of action and establish the new measures in the daily routine

Take the time to understand the organisation and its strengths and weaknesses from the perspective of the employees, customers and partners. Name issues often, and openly, and create a real "sense of urgency" for the change.

Encourage the people to create own ideas, start own initiatives and to take personal risk. Don't be afraid to reform structures on the short-term if they prove to hinder the implementation of the strategy.  Show that you will do what is necessary to make the project a success.

Make sure that the project is not tailored to a single person or a small group of people, but create structures that support the change to be implemented on a broad basis.  Important is to win support in the organisation. A good way to achieve this is by bringing certain employees forward (into the spotlight) so that they serve as a "living example" for the new routine.

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.  

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