Ernst & Young conducted a survey in August 2014 of U.S. and European healthcare buyers to understand their buying patterns for medical technology today and in the next three years. Respondents portray a clear shift in decision-makers and influencers for medical technology. As the graph in Figure 1 shows, hospital financial and supply chain administrators are becoming more influential in the selection and procurement of new medical technology—at the expense of physicians. In fact, the survey predicts that the influence of these administrative buyers will be on par with clinicians within that time period.
Additionally, healthcare providers are joining together to evaluate new technologies and negotiate supply contracts across several healthcare systems. For example, SharedClarity is a joint venture between UnitedHealthcare and major healthcare systems that comparatively evaluates clinical effectiveness of medical technologies and negotiates purchasing agreements for its members. To succeed, medical technology companies need to consider the needs of these new decision-makers as they design and market their products.
In the July 2014 MedTech Trends column, I introduced buying center analysis as a tool to help marketers understand how to best convey the value of their products, and the different roles that stakeholders can play in a purchase process. A buying center is a group of individuals (or stakeholders) who collaborate to make a decision on the purchase of a product. The October 2014 column outlined stakeholder attributes useful for developing and placing marketing collateral, and provided example descriptions for a surgeon and Supply Chain VP. The next step in analyzing a buying center is to understand the role of these stakeholders in a buying cycle.
Finding the Right Buying Cycle
A buying cycle defines steps a customer takes to identify, evaluate and select a product. Many different versions of a buying cycle exist, and most are three to five steps that begin with senior executives defining an opportunity and making the decision to look for a new solution. The next steps involve a number of different technical buyers and end users who explore and prioritize potential products to address the opportunity and end with the administrative stakeholders who negotiate and contract for a specific product. Marketers need to find a buying cycle that matches the sophistication of their customers’ purchasing process. The buying cycle outlined by SiriusDecisions in Figure 2 represents the relatively complex process used by large healthcare systems.
A typical purchasing process for a healthcare system involves a series of decisions that progress the buying cycle through the six steps, where each step involves different clinical and administrative stakeholders. For each step in the cycle, a “decision-maker” and “key influencers” should be identified.
Key influencers collect, evaluate and present information required for that step, and the decision maker is responsible to use that information to progress the process to the next step. In my July column, I used an example of an RF ablation device for use in the operating room and listed the following clinical and administrative buyers: The physician (surgeon or radiologist); Manager, Operating Room Nursing; Director, Surgical Services; and Vice President, Supply Chain. A buying cycle for bringing a device to a healthcare system might look like Figure 3.
Clinical stakeholders define the opportunity and engage administrative stakeholders to connect the opportunity to the business. The VP, Supply Chain, helps to define the parameters for an acceptable solution in the step “Committing to Change.” Both clinical and administrative stakeholders collaborate to explore possible solutions, prioritizing alternatives and justifying the selection. This information is used by the Chief of Surgery and the VP, Supply Chain to approve the selected solution and begin the contracting process.
A solid understanding of the roles, purchase criteria, and information access preferences of the key stakeholders in the purchase process for a specific clinical area or support service is the foundation for creation of materials that increase awareness and preference for a company’s products. Marketers will know whom to target, information they need to make a decision, and the best channels through which to deliver that information.
Content Is Critical to Selection Process
Content for the first steps in the buying cycle should help stakeholders better understand an opportunity and influence the criteria they should use for selecting a product. Product-specific information and competitive comparisons become more relevant later in the cycle. A surgeon might look for information on a product’s impact on patient outcomes in a peer-reviewed journal, while the VP, Supply Chain looks for ROI calculators and pricing information through group purchasing organizations.
A complete buying center analysis will also foster a common understanding of the customer between sales and marketing and joint ownership of an opportunity pipeline. The buying center results help sales representatives understand how to best leverage sales tools depending on the target stakeholder and each step in the buying cycle. Sales can provide valuable input on the buying cycle steps best supported though marketing programs and help define metrics to measure the results of those programs.
Performing a comprehensive buying center analysis is an important first step to help marketers understand which messages and tactics best convey the value of their products. Through a series of direct interviews, marketers better understand which customer stakeholders are involved in the purchase process, the outcomes they are seeking to achieve and the channel over which they would like to receive this information. This analysis will help marketing personnel to design more effective segmentation strategies, value propositions and sales enablement tools.