Virtual Sales Could be Here to Stay…is Medtech Ready? | Deloitte US has been saved
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By Jay Zhu, managing director; Robert Maul, senior manager; and Erich Sachse, senior manager, Deloitte Consulting LLP
Medtech has historically relied on a hands-on, face-to-face sales model where field sales forces communicate value propositions and develop deep relationships with key influencers and decision-makers on-site at hospitals and other health organizations.
The COVID-19 pandemic has turned that model upside down. States have issued stay-at-home orders and hospitals and other health facilities have restricted access. In response, many medtech companies have quickly adopted a work-from-home model to protect their customers and employees, and have turned to digital channels to stay connected to their customers.
Virtual sales isn’t new
Outside of medtech, virtual sales is common across a wide range of industries including financial services and technology. Even within medtech, virtual sales isn’t an entirely new concept. For example, a pioneering genomic sequencing company was able to sell a large capital instrument via its e-commerce channel directly without any face-to-face engagement. Many medtech companies have adopted inside sales and digital marketing over the years to enable multi-channel engagement and to reduce selling costs. These tactics have proven effective for some mature products, hard-to-reach customers, and certain activities along the sales cycle.
Despite some success, virtual sales tends to be a small part of the sales model in medtech. Most companies still rely heavily on in-person promotions and have been reluctant to expand the use of virtual selling. The COVID-19 outbreak abruptly flipped the switch for everyone. Some companies and sales people were not as prepared as others. Different skills and approaches are typically needed to engage customers in virtual settings, especially when it comes to new customer acquisition. Rather than reinventing the virtual sales model, medtech companies should look to other industries and learn what has worked.
Virtual sales is likely more than a temporary fix
Greater reliance on virtual engagement among medtech companies will likely be more than a temporary response to the pandemic. Even after the threat of COVID-19 fades, we expect a meaningful portion of the sales process will remain virtual due to continued limited access and lower revenue expectations. In a post-pandemic world, some customers might prefer engaging with sales reps virtually versus face-to-face. Additionally, many hospitals and health systems will likely be under significant pressure to reduce expenses, which will pose revenue challenges for medtech companies. In response, medtech companies should optimize their selling costs by increasing the use of virtual channels. Medtech companies that strategically incorporate a virtual component into their sales strategy will likely be best positioned to recover faster than their peers and thrive in the new landscape.
Converting face-to-face meetings into virtual meetings—that achieve the same or better effect—might require more than a videoconferencing solution. Sales reps and account managers should fundamentally rethink their interactions, and marketing should be empowered to support this new way of engaging customers. Not only should sales teams adapt quickly, they also should do it well. An ability to embed value into every customer interaction will likely separate the winners from the rest of the pack.
Six strategies to maximize virtual sales
As patients return to medical facilities for the elective surgeries and non-critical procedures they had deferred, medtech companies should shift from responding to the pandemic to recovering from it. There are several key actions they should consider to maximize their virtual sales effectiveness:
Some hospitals and health systems have already begun to restart elective procedures, which could mean the recover phase of the pandemic response is arriving. Medical facilities may be anxious to get their revenue streams flowing again once concerns about the virus begin to subside. As the pandemic passes, we expect each therapeutic area will recover at a different rate and at a different pace. Additionally, the speed of recovery will likely vary based on geography, local government policies and guidance, and each provider’s strategy. Medtech companies that understand the changing demand curve, and strategically prepare for various scenarios, will likely be best positioned for the near- and long-term future.
The pandemic is likely to change the medtech sales landscape permanently. Companies should re-imagine their future customer engagement strategy and optimize the mix of virtual and in-person channels to accelerate recovery and thrive in the new world.
Jay Zhu is a managing director with Deloitte Consulting, leading its Medtech Commercial Strategy practice. He brings more than 16 years of consulting experience in commercial strategy and operations helping medtech and health care services companies make and implement business decisions. In recent years, Zhu has helped medtech companies transform their business models and marketing strategies. He has also worked across different sectors in the health care industry, including distributor, GPO, provider, and others, which allows him to bring and validate innovative ideas and best practices to his medtech clients to better meet customer expectations and create competitive advantage.