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Andy Kach
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Brian Chapman
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Sales Force Targeting: On Beyond Bed Counts and ‘Blunt Instruments’

Posted by Tobi Laczkowski on January 15, 2016



shutterstock_102915128In previous posts, we’ve touched on the topic of segmentation and we’ve discussed some different levels of segmentation, such as account-level versus personnel-level. Of course, you can drill down even further. Some medtech companies primarily focus on quantitative account metrics, such as bed count, patient volume and procedure mix. Others look to dimensions such as integrated delivery network and group purchasing organization affiliations, academic credentials, etc.

In the increasingly complex world of medtech sales and marketing, traditional metrics such as the number of beds per account have become too blunt of an instrument for a refined segmentation strategy. There is no single universal segmentation, and there also is no single universal translation of a given segmentation outcome to a targeting strategy.

Two medtech clients of mine, company A and company B, recently conducted segmentation studies and concluded that critical access hospitals (CAHs) were a unique segment. For readers unaware of CAHs, think of them broadly as small rural hospitals that provide care to a community underserved by other hospitals.

Company A determined that its product portfolio was not an obvious fit for the CAH type of account, which, when combined with the sheer expense and logistics of traveling to and serving CAH customers, led Company A to a strategic decision: Ignore that segment altogether. For Company A, that strategy allowed it to focus its finite sales resources on account segments with larger opportunities.

Company B, however, took a different path. Medicare reimburses CAHs at 101% of their reasonable costs, rather than at the rates set by prospective payment systems or fee schedules. Given the unique reimbursement situation at CAHs, company B’s product offerings could flourish. Company B actually achieves higher margins at CAHs than at more typical acute hospitals, making it well worth the company’s while to target that segment.

The point is that segmentation can be used to define characteristics of accounts, and that an attractive segment for one company’s offerings may be quite an unattractive segment for another company. The targeting implications are quite significant, as are the expectations from those potential customers.

It’s no longer good enough to be relying on “blunt instruments” like bed counts when developing a segmentation strategy, and you can’t take a “one size fits all” approach to targeting strategies, either. Limited resources coupled with an imperative to consider targeting decisions through an ROI-focused lens are prompting medtech sales and marketing teams to develop precise segments and targeted messages to serve them. With spray-and-pray strategies far behind them, medtech sales and marketing teams need to extend their thinking to reflect the customized value propositions that will resonate the most deeply with distinct target audiences.

Topics: Sales Force, medtech, Tobi Laczkowski, targeting, segmentation

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AUTHORS
Brian_Chapman_thumbnail
Brian Chapman
Principal,
ZS Associates
Tobi_Laczkowski_thumbnail
Tobi Laczkowski
Principal,
ZS Associates
Will_Randall_thumbnail
Will Randall
Manager,
ZS Associates
Matt-Scheitlin-London_thumbnail
Matt Scheitlin
Associate Principal,
ZS Associates
Andy-kach_thumbnail
Andy Kach
Associate Principal,
ZS Associates
Bhargav_Mantha_thumbnail
Bhargav Mantha
Associate Principal,
ZS Associates
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