Let's talk about your project today

A Value-Based Approach to Loyalty

It can be tough to keep up with the rapidly evolving medical device landscape. A seemingly endless array of factors continue to emerge – opening global markets, consumerization, maturing technologies, regulatory requirement and price pressures from healthcare systems are just a handful. Each of these market forces carries with it the possibility of stifling the efforts of medical device makers to bring new innovations to market. But these forces also create opportunities for growth and expansion – so long as they are met with a thoughtful and strategic approach.

Loyalty vs. Satisfaction

So, how does a medical device OEM succeed? How do they attract and retain customers in such a multifaceted and evolving environment? Understanding their customers and what drives loyalty should be at the heart of their approach. In a recent article, Stop Trying to Delight Your Customers, the Harvard Business Review discussed what drives loyalty in consumer markets. Some of their ideas, though, can be applied to the medical device market.

While several specific strategies to boost loyalty are outlined in the article, the main point behind them all is that a customer is more likely to be driven away by failing to meet basic requirements than they are to stay because of something extra they were offered. In other words, customer satisfaction does not directly align with customer loyalty. In many cases it makes more sense to stop trying to impress customers with bells and whistles and reallocate those resources to ensure that the customer gets exactly what they need. Just like many of our parents at least tried to teach us – do what you said you would do really well and do it when you said you’d do it.

The benefits to this simplified approach can easily lend themselves to the concerns of the medical device maker. Such a strategy can help drive down costs for the manufacturer and the customer and result in fewer opportunities to disappoint customers with product or service failures. But, of critical importance, this approach also allows medical device OEMs to reach new and developing markets with a stable, established and value-based devices.

A PLM Approach to Values-Based Design

Adopting a value-based approach opens the door for medical device makers to consider several strategies to help them thrive in this evolving market. While at first glance, these strategies might appear to be disparate efforts to adapt to new market forces, in fact, they adhere to a Product Lifecycle Management (PLM) approach. This can and should be at the heart of any product development strategy for medical device OEMs looking for a path forward through turbulent market conditions.

Phase 1: Product Roadmapping

  • The first phase of product development is less concerned with the act of designing and more concerned with learning what should be designed in the first place. As in any industry, knowing what customers want, need and can afford should be the core of strategic product development efforts. The industry forces above have helped to create a world of possibilities for medical device makers as their potential for reaching new audiences and new customers continues to expand.

  • Using a tiered product line approach is just one way to be sure that customers in multiple segments – including the value segment – can be reached (“Capturing the New Value Segment”, McKinsey & Company, 2015). The automotive industry presents a classic (albeit simplified) example of a tiered product strategy. New and innovative technologies are developed for luxury models while more basic models with lower prices either forego the additional innovations altogether or only include them once they have been commoditized in the larger market – remember when air conditioning and power windows were only available on the top-of-the-line models?

  • The medical device world, of course, is infinitely more complex making it even more important to truly understand all potential purchasers and users. Culture, technological infrastructure and education/training will all be important considerations, especially in the global context. From devices such as cardiac care (electronically programmed pace makers vs. mechanically controlled) to the myriad home monitoring devices and their varying levels of complexity and connectivity, the goal should be to understand the target market and match device tiers to the needs and capabilities of that audience rather than pushing technology or features on them.

Phase 2: Development

  • The second phase pf product development is where the rubber meets the road and the ideas and knowledge gained in the Roadmapping phase can be brought to life. Design choices will be implemented based on the target audiences in target markets. Even value-based medical devices need to be designed to operate in the environment into which they’re being sold. In fact, it may be even more critical to design to context for these devices given the potential for technological, cultural or infrastructure constraints.  Levels of technology adoption at both the consumer and institutional levels can vary from customer to customer. For instance, one can imagine differences between a home monitoring device in the EU versus Africa – EU devices can use Wi-Fi, while devices for the African market may be better served with cellular technology.

  • Additionally, both the user of the medical device and the location for care may need to be reconsidered and tested during design. Caregivers and even patients themselves are now part of the delivery of care and the site for this care may be someplace other than a traditional medical facility (e.g., retail care, outpatient care, home care). Value-based versions of medical devices can help to meet the technology, usability and affordability requirements of these new audiences.

Phase 3: Fulfillment

  • The final phase of PLM is where medical device makers ensure that their devices achieve maximum impact and time in the market, resulting in strong returns. Strategies for launch and lifecycle management are all brought into play. As medical device companies consider offering value-based devices the natural concern becomes understanding how this strategy will yield results in what can be a more commoditized competitive structure. When device features are less of an option, service offerings can become another way to achieve differentiation from competitors. Service models for medical device OEMs were once considered to be simply transactional in support of a sale. Manufacturers are now beginning to realize that service can both extend relationships with customers past the point of sale and also provide opportunities for additional revenue streams like on-going consultation, maintenance, upgrades and fulfillment of consumables.

  • As with device design, creating new and innovative service models (including tiered service models) will be predicated on understanding both the gatekeepers and users of the device, but also requires a thorough understanding of the potential device-generated data. This data can be harnessed by device makers to better understand real world usage on the individual and aggregate levels to feed services but also to help drive future design decisions.

The medical device world is changing rapidly and it can be tough to keep up. But thankfully, these market forces also present a world of opportunities, often quite literally. Whatever strategies device makers eventually deploy, a deep understanding of what their customers want and need will be more important than ever. Understanding that driving customer loyalty will be based more on meeting basic user needs in a cost effective and simple way than impressing them with features is the key to making those strategies work.



Shawn Oreschnick
Director of Marketing & Analytics 


Contact Logic PD and get started today.

We help deliver innovative solutions that conquer today’s complex and connected product challenges and optimize your market potential.