For MedTech companies, quoting challenges are common.
Your company is years into producing life-saving medical devices, and everything seems to be working fine. You’ve found some reliable customers, you’ve got steady profits, and your quoting process, while not perfect, isn’t driving customers away. Your go-to-market model works, right?
Maybe. While it’s possible you’ve got everything figured out, even successful medical technology companies often have inefficient quoting processes. A few common challenges, if fixed, can unlock growth, helping you better service your customers and make more money in the process. The challenges are:
Complex medical device product rules make quoting difficult and increase the cost of growth.
Medical device sellers often must navigate complex product sets and even more complex selling rules that go with them—what products can be sold together, how products can discount, what products must be sold bundled, and many other considerations. In many medical device companies, the knowledge of these rules lives in the heads of their most tenured sales reps or within a sales operations team.
While this can work for a business up to a point, a large and/or quickly growing business will find it difficult to onboard and train new reps on rules that aren’t written down or systematized. In the worst-case scenario, investing in new reps may impact revenue less and less simply because they can’t get up to speed. As you approach 100 sales reps, this model becomes totally unsustainable.
Many companies try to navigate this challenge by hiring more back-office support to validate what gets sold. While this is slightly more feasible than throwing reps at the problem, it still becomes expensive over time, and as you continue to hire more support, you’ll still run into diminishing returns.
Medical device quoting has trouble accounting for GPOs, IDNs, and local agreements.
Between group purchasing organizations, independent delivery networks, and more, medical device sales means navigate multiple ways to sell into the same end account. This can dramatically impact the pricing of complex products, requiring you to update your price books accordingly. As you sell to GPO & IDN networks, these prices should flow through to the end customer—in such a complicated pricing model, under- or over-discounting can easily harm your competitiveness or your bottom line.
To be successful, reps must be empowered to manage end-customer relationships while also responding to the macro factors that affect your company’s GTM efforts. This can be especially challenging if the price book availability is done offline or strictly by your sales support team.
Manual quoting processes lead to quality control issues.
For younger companies, order volume is likely small enough to manage hands-on. As order volume increases, however, quality control issues often begin to emerge. On the sales side, these quality issues often involve your ability to deliver a complete bill of materials. Without a centralized order management system, it can be challenging to make sure everything required in a bundle is sold together.
Additionally, a manual process often makes it challenging to keep enough inventory on hand to fulfill the orders you generate, causing problems for your supply chain. As a result, orders are delayed, reducing customer satisfaction, or they’re not accepted, reducing revenue.
Summing up: For medical device companies, an improved quoting system may be worth the investment.
At different stages in a company’s growth, different investments are needed. While it’s difficult to pinpoint a specific revenue level or employee count at which a medical device company will need to upgrade their quoting process, the above problems are telltale signs. If you’re experiencing any of the above, they may be in the way of more revenue or more profitability for your organization, and it’s worth evaluating if technology can help systemize and scale your processes.
Spaulding Ridge, a global cloud technology consultancy, has helped over 25 different medical device companies and over 50 healthcare organizations better manage their quote-to-cash process. Ready to streamline your quoting process? Contact us today to discuss how your organization can improve productivity and profits.