1. Verify and Validate your Concept.
It’s important to understand true market demand. What problem or unmet need are you solving and how large is the market opportunity? Who is the target audience and what are their behaviors? What is special and different about your product?
Many people are excited about launching their product and move too quickly to prototyping and promotion, only to find out later that their assumptions about market viability were unfounded or the demand was overestimated.
Ask yourself: Does this product address a true unmet need, or will your product be another cool gadget or novelty? Does your user-base involve one-user or an ecosystem of users and does your product truly solve an issue/challenge for all of them?
You can answer these questions effectively by focusing on design inputs and most importantly, concept validation. Test your market concept first – with ACTUAL customers, within the appropriate ecosystem. You can gain insights by sharing a written concept, 3D/CAD model, or a single prototype and from there, work to verify and validate your assumptions, the market potential, profitability models, and customer demand. Not only will this save you time and money in the long run, it will reduce unnecessary rounds of product design iterations.
2. Consider your Competitive Space.
You may think your product is the hottest thing on the block, or it may just be another one-hit-wonder. Do your homework and become an expert on your competitive space. How are you positioned against the competition? Is your product unique and differentiated in the current market and how will it sustain its competitive advantage in the future? Don’t let your hard work and efforts in establishing and developing a market be overtaken by a late-entry competitor that offers a similar product design, but only cheaper and better.
Instead, stay on the offense while playing good defense. That means taking the time to plan for the road ahead and anticipate market and competitive pivots. It also means continuing market research with your current sales channel and adjacent spaces, while identifying opportunities, collaboration and product improvements. Sometimes your market research holds pearls of wisdom—insights that may keep you relevant and ahead of everyone else.
3. Determine Pricing in Dollars and “Sense”.
How well do you know your target customers? Do you understand their willingness to pay your suggested price? Do you have a pricing model or a pricing strategy? Price sensitivity plays an important role. Setting a base list price, ceiling, floor, ASP (average selling price) and discounting strategies are important considerations. Establish rules early in the process; clarify volume, ASP and margin goals, and determine which behaviors could increase, protect or erode your business.
Ask yourself: Do you prefer to price fairly and maintain prices, and only use discounting sparingly, or do you need quarter-end or year-end sales to unload stagnant inventory? Although complicated, it is important to determine what works best for your product and business. When discounting, it is important to approach with caution. If you overuse promotions, your buyers could come to expect discounts consistently, which may lower your overall ASP and cause a rebound effect. After all, you wouldn’t want your customers holding out for a discount, which would turn your forecasting process upside-down. Think about it this way: pricing should reflect the “value” and should prompt anticipated and desired behaviors of your customer base in a consistent manner. Utilize concrete forecasting models to determine appropriate price ceilings and floors.
Another consideration, and possibly the most important when dealing with a new MedTech product is reimbursement, which is a much more complex topic. Many teams are all too excited to launch as soon as they receive product clearance, however, reimbursement and clinical support are critical to the success and market adoption of your product. [We will table this topic for another blog post].
4. Articulate your Value Proposition to Key Customer Segments.
Investing time to identify key benefits and the true value your product brings to your customer is critical to your success. Take the time to understand your market demand better, as well as market drivers and what customers value about your product. How does your product solve specific pain points, and what can it offer that no other product can? It is important to develop benefit statements for your key customer segments. Do you have other valuable services as add-ons and do you make things easier? Make sure you spend the time upfront not only articulating these claims, but also validating them both qualitatively and quantitatively to set yourself up for success. Your product and its features won’t sell itself…. the features should benefit the user. Hopefully that benefit is differentiated.
5. Identify Costs for Promotion and New Customer Acquisition.
To sell your product, you must create awareness and education, which takes time and money. Define your buying cycle. Develop customer profiles and understand which tools and tactics resonate best in each phase of engagement to convert a lead to a sale. You should have a good understanding of the cost per customer and cycle length to turn a prospect into a customer. Once you have figured out how much it will cost to acquire those customers, you must determine the best channels to reach them. Is it social media? Is it through advocacy? One tactic(s) does not fit all.
Spending time upfront to identify your channels and tools in a solid commercialization plan will save you time and money in the long run. Not only will you have a clear idea of who your customers are, and how to reach them, but you will also understand the channels they prefer as they move through the buying cycle to become repeat users, and ultimately, loyalists.
Your plan should further define your customer base. Are your customers repeat users, or one-time users? Is your customer base loyal or are you constantly converting them with repeat acquisition? With this information, you can plan your strategy appropriately as you work to create critical momentum for your product.