About the Author
Seema Sodhani
Seema Sodhani is a Product Strategy & Marketing leader with in-depth experience in the health technology and biotech market. Seema has achieved a successful track record of building and launching health tech SaaS and application offerings. She brings a sophisticated product strategy, design, and brand development process to c-suite and product/marketing leaders.
Value drivers are what differentiate a product or service from those of a competitor, providing a clear advantage and enabling a company to dominate a particular market. These drivers can come in many forms but need to be distinguishable in order to create the impression that a company’s products and services are better than the offerings of their competitors.
Here are four ways to ensure you are clearly communicating value drivers in order to effectively increase your leverage with life science/biopharma customers. Learn what industry experts have to say.
1. Know your customers’ pain and their business model.
If you are selling into biopharma/life sciences, it’s important to communicate very clearly what your solution does for them, how it aligns with their business model, and how it addresses their specific pain points. Some examples include:
- Speed: How does your solution get a drug to market sooner? How does it push patients to fill their prescriptions faster?
- Volume: How does your solution work to get more patients on therapy?
- Retention: How does your solution ensure that more patients will stay on therapy?
- Cost Savings/efficiency: How does your solution help address the pain point of having less people on staff tasked with doing the same work?
“Pharma continues to reinforce to me that the ultimate value driver is all about actionability towards market share. How can we put this information into action in sales force deployment, messaging, or market access. The distinction between interesting and actionable is always top of mind and actionable will always get dollars, where interesting will only sometimes get dollars.”
– C. Morris, Senior Value & Analytics Executive
2. Validate and prove that your product supports these key value drivers.
Getting the data and identifying the value for each life sciences/biopharma customer is time consuming and too often companies don’t make the effort to do this. The result? They end up lacking a solid understanding of their customer’s business model, how much they are worth, and how they make money. This is why it’s essential to do the following:
- Write a value formula: The simplest value formula is: (customer cost item) X (% reduction). Alternatively, this formula is also a consideration: (customer revenue line) X (% increase). The trick is to identify which particular cost and revenue items your solution actually improves—and by how much.
- Validate the value drivers. After you have built 2 or more value driver formulas, you need to take them for a test drive. The best way to do that is find “friendly” customers and ask for their candid feedback. You may need to rewrite the value drivers a few times before it is ready to be used in real sales situations.
“Today more than ever the value of a new asset must be established early in order to have effective access and reimbursement discussions with payer decision makers. The value driver for your asset must be established, tested, refined, and communicated during the PIE discussions with customers. Your value proposition that is presented at launch must build on the evidence communicated pre-launch to reinforce how you will help to fill any gaps in care for patients, HCPs, and ultimately those paying for the treatment.”
Khawar Khokhar, Founder and CEO SAKS Health LLC
3. Build a pricing model that is backed by the value drivers
In a value-based pricing model, prices are not based on simply marking up production costs. Rather, they are based on your customer’s perception of the value you offer to their specific business model. Of course, it’s necessary to consider market influences, your product benefits, and the pricing of your competitors. But then you can apply value-based pricing depending on your customer’s specific goals and what is going on in the life sciences/biopharma industry that directly affects them. Keep in mind that value-based pricing strategy requires justification and you need to clearly differentiate by identifying and articulating the real value of your offering
4. Work with your marketing team to ensure your value proposition is part of the positioning and messaging of your offering.
Product leaders and marketing leaders need to work hand-in-hand to ensure that value driver communication is part of the product positioning, messaging, and pricing. Pricing work is too often conducted by looking at just the competitive set or after positioning and messaging work is complete. The sales person then is challenged with trying to sell an offering with misaligned go to market pull-through.
“Value drivers communication is essential for a successful selling outcome to life science/ biopharma customers. In order to be able to communicate the value drivers that we are able to deliver, we need to understand the value proposition that those drivers will help the customer achieve. It is important to cater the value proposition to the right customer persona. This includes the life science/bio-pharma internal users (ie, budget impact, speed to market) and its important stakeholders, including patients (ie, translating data into patient language), providers (ie, healthier and happier patients), payers (ie, less claims), and policymakers and regulators (ie, faster regulatory review and approval).”
Dimitri Stephanou, Managing Partner & Interim CIO, Pekasso Group
In summary, product leaders and commercial leaders in health tech and life sciences need to put in the deep thinking and work to be successful in this highly complex and competitive marketplace.
* This blog post originally appeared on RIVIR’s blog.