The development phase is an important step for the success of innovative products. Yet it is only the first of many. Profitable placement in the target markets is an equally important task – both regarding digital and non-digital products. Digital products face another challenge: Many companies have no systematic or standardized go-to-market approach for these. And yet precisely such an approach is becoming increasingly important: Digital business models are becoming more complex from every day. Those who reinvent the wheel for every market launch fall behind the competition and quickly become outpaced in digital markets.
To prevent this scenario, an international IVD company secured the support of Homburg & Partner. The client had already witnessed some economies of scale in the development of digital products. However, the launch into respective target markets was always as difficult as the first time. Hence the project’s objective was to design a systematic go-to-market approach for digital products. In the future, it was to be embedded in the company worldwide in order to reduce the workload and increase the success of market launches.
“The digital healthcare market is currently characterized by many new product launches. What nearly all share in common is that a systematic, globally defined and locally adaptable go-to-market approach is missing. It offers added value to every digital health solution. The ideal solution is a combination of globally uniform guidelines that are adapted to the situation and above all to the market.”
“As is the case with all modern therapies, refunding costs is of crucial importance for a comprehensive establishment of digital healthcare products. The success of the new introduction depends on the additional benefit for the end user or the incentives for the cost unit. By pursuing a structured go-to-market approach for digital healthcare products, the correct users can be identified, value stories can be formulated and price points set. This way, innovative products can be successfully launched both regionally and globally.”
At the project start, there was a digital idea that was meant to increase the reliability of diagnoses along existing medical decision-making paths. However, the question as to which goal our client wanted to pursue with the solution was not answered at the time. Our client often provided earlier digital solutions as additional services at no extra charge in order to promote non-digital products to their customers. In the course of a joint workshop with Homburg & Partner, it was determined that the new digital solution should also generate additional revenue itself. The aim was to set an anchor point in the market and to gather knowledge from the commercialization process for future market launches.
Next, in a first step, the market was profiled along the 4C framework to determine the solution’s medical added value. The idea was to also include prevalence, epidemiology and current treatment methods. An analysis of the competitive landscape followed and the added value of the digital solution was evaluated using various treatment scenarios. This was done by means of a primary market assessment study using primary and secondary sources.
In a further step, the client’s perspective was included. To this end, an evaluation of potential customer groups and their individual needs was carried out. This also included evaluating the attractiveness of the digital solution for individual customer groups. To do so, the strength of demand per customer group, implementation effort for our client and implementation effort for the end customer were assessed. An additional focus was on understanding the individual steps of the purchasing process of digital solutions for customers and stakeholders involved.
One of the biggest challenges when designing a go-to-market strategy is to identify optimal monetization and payment models. To overcome this challenge, the results from the previous project steps were key: Since a clearly defined digital solution with an area of application, customer group, medically added value and value story existed, several compatible scenarios for monetization were quickly found. Our client planned to use the digital solution to generate additional sales and to enter the market as quickly as possible.
In order to achieve these goals, a classic commercial sponsorship model for the solution was finally defined, which was planned to develop over time into a value-based system in which the price of the solution is determined by the added value supplied to the customer. As part of the payment model, customers were granted a high degree of flexibility. Depending on the frequency of use, both flat rate and pay-per-use options exist.
For a digital healthcare solution to be successful, more must be done than to just satisfy a customer need. A value story must also be formed that includes various medical, economic and emotional facets. Accordingly, the new digital product was equipped in this project step with a value story that addresses all of the facets mentioned above. In parallel, suitable distribution channels (online and offline) were selected in order to reach future users in the best possible way.
The next step included gaining an understanding of the addressable market volume so that sales potential could be optimally estimated. Together with our client, we decided to divide this market outlook into two phases: the near future (upcoming 1-2 years) and the medium future (upcoming 3-5 years). The addressable market for the new digital solution consisted primarily of providers of laboratory services – both in the private and public sector. Hence, a pilot phase for the solution was therefore decided upon, which will take place in two laboratory chains in five country markets.
A regional approach was chosen to implement the product launch. Initially, a launch of those five European country markets was prioritized, that are most important for our client. The goal was to generate knowledge and best practices to facilitate the subsequent launch in the USA and APAC. In addition, resources were planned for the launch, in the course of which the scope of the required field staff was also determined. The already active cooperation with established laboratory chains enabled their additional assistance in communicating the digital solution to doctors.
The Digital Innovation Canvas represents a model for market-oriented innovation design. The visible content represents an exemplary concept for an algorithm-based solution in the field of oncology. By using the canvas during an early product development stage, stakeholders can consolidate ideas and jointly determine the direction of the further development process.
At the project start, there was already an idea for a digital solution. However, a detailed understanding of the end customers and the commercial possibilities was missing. Based on the conducted market profiling and customer assessment, the product concept could be decisively sharpened. This provided clarity regarding the medical added value, the needs satisfied and the target customers of the new product – on a global level and for the subsidiaries in the respective target countries.
Our client was aware of the potential of digital products, but there was a lack of a structured, global approach to their launch at the project’s beginning. This reduced the speed and chances of success in the go-to-market. Our structured go-to-market approach and associated frameworks enabled us to identify the right target customers, uncover unmet needs and define individual steps for a successful go-to-market step in all target markets. In this way, we ensured that the new product found suitable market niches in all target countries – a key success factor for generating additional revenues.
At the project’s start, the digital solution already existed as an idea, but there wasn’t a value story yet. Consequently, our client had a hard time determining monetization and payment models and to select appropriate price points. By combining internal (client) and external (end customer) perspectives for the new product, we laid the foundation for the formulation of a value story that can be equally internalized by all stakeholders. This way, there was clarity about the benefits of the new product. This not only fostered an effective approach for the sales force, but also an overall successful go-to-market.
If you are interested in finding out more about our services in the field of the go-to-market for digital innovations or would like to discuss similar approaches for your company, please do not hesitate to spend a few seconds to leave an inquiry via our contact form. Our partner Karl-Hubertus Gruber will personally contact you promptly. Alternatively, you are welcome to contact us by emailing or calling us!