Delivering Tangible Value Solutions for the Medtech Space
In my previous blog, we discussed new market trends in the medical technology space and the pressure on medical technology companies to digitize and transform their pricing and sales processes. We also discussed the need to innovate and find new revenue and margin streams like subscription services, pay-by-use, etc. However, what have medical technology companies out there in the market done in practice? What solutions have they implemented, and what were the results? In this blog, I'll illustrate three tangible examples of how PROS customers have integrated new capabilities to make the lives of pricing and sales folks easier and to improve margins.
- B.Braun – Optimized Prices for Quote Negotiations and Contract Renewals
A lot of change in the healthcare industry, including GPO/IDN consolidation and supply chain issues, made it evident that B. Braun needed data and facts at their fingertips to inform negotiations within their business.
B. Braun develops, manufactures, and markets innovative medical products and services to the healthcare industry. B. Braun has over 100,000 SKUs and 600 sales reps and was experiencing challenges managing a complex business through many operational inefficiencies causing stalls in their long-term growth and scalability. A lot of change in the healthcare industry, including GPO/IDN consolidation and supply chain issues, was making it obvious that B. Braun needed data and facts at the tip of their fingers to inform negotiations within their business. Missing data on top of operational inefficiencies such as lack of consistent pricing and slow pricing changes due to changing market conditions were piling up and impacting B. Braun’s long-term scalability and growth.
PROS was the only solution that could meet every capability that B. Braun was looking for and was able to seamlessly integrate with their existing technology stack. Using PROS Guidance and PROS Rebate Management Solution Powered by Enable, B. Braun was able to place the customer in a better position in any contract renewal or negotiation process.
B. Braun and PROS were able to make the complex simple by making meetings more efficient by 10x. A one-hour meeting now only takes 6 minutes. Where B. Braun’s pricing system used to be inefficient and ad-hoc, it is now consistent, with 4x faster RFP response time. Additionally, with PROS, B. Braun can offer the right customers, the right price, at the right time. Kevin Morris, Associate Director of Pricing Insights & Analytics at B. Braun said that the project with PROS has led to many “quality of life improvements” for him and his team. “Whenever we saw PROS in action for the first time, there were no questions… it just made sense.”
- Spire Healthcare – Making the Lives of Salespeople and Pricing People Easier
Spire Healthcare is one of our Medtech customers leveraging the combination of the POM pricing solution and Smart CPQ (Configure-Price-Quote).
Spire Healthcare is a global healthcare provider with 38 hospitals and nearly 3,000 different types of procedures. When Spire approached PROS, they had 3 main challenges they were trying to solve. 1) Lack of a consistent process- each hospital in their network did their own thing, 2) improve the usage of the official pricing process to alleviate errors in consistency, and 3) improve the pricing dynamics and process to be able to update prices and be more marketable.
Spire was looking for a company that had industry experience to create a bespoke solution to fit the needs of each of their customized requests for patients. Originally coming to PROS as a CPQ deal, pricing also became an important value driver for Spire. During the implementation, PROS created a connection to the Spire CRM system which is based on SAP C4C. Furthermore, Spire went live in 2 parts- part 1 focusing on Smart CPQ and part 2 focusing on Smart Price Optimization & Management (Guidance). Once the process was ironed out- Spire then rolled out the pricing software to all 38 hospitals.
Spire experienced a massive revenue lift from 2020- 2021 paying for their investment in PROS in less than one year. With PROS, Spire was able to grow their self-pay market significantly because of the transparency and clarity that patients were seeing on their quotes. Additionally, Spire mentioned “the new Pricing Engine”, PROS, in their annual report several times. But that’s not all- with PROS Spire is able to train new employees in weeks instead of months and have centralized the pricing for their 7,000+ contractors within Guidance for easy access in the quoting process. The pricing and quoting process at Spire is no longer in spreadsheets and in people’s heads across the business- they now have a world class engine that enables them to create the custom, curated views that their patients deserve- enhancing the level of care from the quote all the way to the procedure.
This is what Justin Ash, the CEO of Spire Healthcare stated in public: "The Group's new pricing system allows central oversight and optimization of self-pay pricing across Spire Healthcare's hospitals, while also making it easier for our consultants to securely post and amend their own, independently determined charges".
- McKesson – Reverse Margin Leakage
McKesson is a long-standing PROS customer which is using our POM pricing solution extensively, including advanced price optimization capabilities. McKesson Medical-Surgical Primary Care is the oldest and largest healthcare services company in the U.S. and is as dedicated to better health as when it started in 1833. While values remain consistent, the surrounding healthcare market has faced unprecedented change in recent years with price-sensitive customers and a booming digital marketplace. McKesson was facing growing price pressure, and their inefficient pricing wasn’t helping. McKesson was losing sales because of overpricing and losing margins because of under-pricing. On top of their internal revenue losses, there was also an increasingly competitive online market.
McKesson chose PROS Smart Price Optimization and Management and was able to improve both revenue and profit attainment. Within the solution, McKesson eliminated excessive discounting by providing real-time pricing guidance to their sales team. Within PROS Smart Price Optimization, the automated and streamlined price-setting process allowed the company to be more agile in making pricing changes. McKesson now had a system to provide competitive, logical pricing for every item and every customer at the right time.
With PROS, McKesson generated a significant increase in gross profit and increased margins basis points. With the reduced time to quote and the increased quote-to-close ratio, sellers were able to spend more time on value-added selling instead of time spent figuring out pricing.
As far as results are concerned, a quote from Peter Barr, Senior Director of Pricing, summarizes the outcomes of the pricing initiative very well: “We are realizing and exceeding all expectations for what we’re trying to do with pricing; our performance has been exceptional.”
These are a few examples of how PROS customers utilize our state-of-the-art platform to offer a seamless buying experience for their customers. If you'd like to learn more about how we assist our customers or discuss ways to enhance every buying experience and make each transaction more profitable, please reach out to us today.