Doug Beveridge (DB): Hello and thank you for joining us again. I’m Doug Beveridge, and I’m pleased to be joined by my friend and co-healthcare practice leader, Craig Ackerman. Once again, we’re going to be talking about some of the latest trends and research and healthcare things that really matter, hopefully to you, the listener. So Craig, we recently did another one of our pulse surveys, of leaders across different industries. But today, obviously we’ll focus in on healthcare. And, you know, talking about relevant trends, expectations, those sorts of things. So what did we see? What are healthcare leaders saying about not only how did 2021 end up, which I’m sure a lot of them are focusing and looking at? But also, where are we headed for 2022?
Craig Ackerman (CA): Yes, so 2021 has been a great year. An average healthcare organization grew by about 15%. So it’s almost like two growth years in one. So we made up for lost ground. It was caused by the pandemic and shutting down of elective procedures. So it was a great recovery year for the industry. Next year is shaping up to also be an above-trend line type year for the entire industry. So we’re still expecting high single digits, low double-digit growth rates. And it’s also supported by the fact that healthcare providers are still recovering from COVID, so they’re still not back to 100%. They do expect to be back to 100% in 2022. So all of our data from our clients, as well as from our surveys of physicians and hospital administrators, points to another great year and 2022, not quite as great as 2021, but still great for the industry and above trend line growth rates.
DB: Whenever you hear these sorts of stories, that’s usually pretty optimistic. We have an optimistic group that we talked to often. What are the headwinds? Are there must be things they’re worried about that say things look good. But here are some things I’m worried about are things that give me pause.
CA: Yeah, there’s a few headwinds out there. We hear, we hear it across all industries, really this juncture and you just turn on the nightly news and you hear about supply chain issues. So supply chain issues and backorders are very prevalent in the healthcare industry, especially for those selling products that have to be manufactured. So that’s an issue. Also, the costs are going up. Costs of manufacturing goods on the manufacturing side, whether you’re a pharma company or med device company, you’re manufacturing something your raw material costs are going up, freight costs are going up. So that’s putting pressure on the margins in certain sectors like Med device, it’s really hard to raise prices. So it’s becoming a challenge in the industry. And the third is turnover. We’ve seen turnover go from about 6% during the pandemic to over 15% right now, and we expect that number to stay up there. I think our group that we’ve recently talked to in our latest roundtable was a bit optimistic that it was going to go down. But it seems like it’s here to stay for a while as once, once turnover goes up and it’s hard to get turnover back under control unless you have some type of external event that happens where demand for labor goes down. So there are some headwinds for the industry. And when we talk to people, those are the headwinds that come up kind of dodged a little bit of a bullet, at least for the short term around the vaccine mandates. So those have been put on pause. A lot of the healthcare providers are actually pausing their mandates because of staffing shortages. So staffing shortages are real in the industry as well. So it’s kind of what I call, the tentacles of the COVID tentacles of the pandemic. So even though you know, COVID is, you know, a lot of people have been vaccinated, the COVID you don’t hear about like you did certainly 18 months ago, it’s been predicted to be more pandemic at some point in the near future. But there’s going to be some lasting effects from COVID and we’re going to be dealing with for quite some time. And maybe even for longer than that.
DB: So I think even, you know, we’re recording this in the holiday season. Things like delivery times and availability of products. Some of those guarantees have gone away even in healthcare, where we’ve heard med device companies saying no, even delivery companies aren’t giving us any guarantees anymore because even if the products they’re at the dock or in the warehouse, just the sheer process of getting it where it needs to be is not it’s not easy given the demand and hiring challenges and things you just kind of touched on. So there’s the good here to stay, which for a while, which just makes sense. So if you’re thinking about this as a commercial leader, I’ve got these numbers to hit. Things are looking up. We were building on a pretty good year from 2021. Where do I need to invest? And what are the bets I need to place to try to maximize my chances of making that number for next year?
CA: Close to 80% of all companies are investing in their commercial organization, so both the sales and marketing side of the organization. One key theme is digital. We’ve learned we can interact with our customers differently. We’ve learned we can market them differently in a lot of that has to come in as digital and virtual format. So still investment going in there because the industry needs it. We basically we’re starting from almost ground zero, really ground zero and pretty much all cases. There was very little investment in digital capabilities. Across most industry formats and direct-to-consumer things that you could deem as digital. But from the commercial, the sales side, there is very little investment in digital. I guess if you classified CRM systems such as salesforce.com or Veeva as digital, you had investment there from catching up to other industries. And so our customers have learned they can interact with us differently, depending on what we’re selling. We don’t need to be face to face as we once did. So there’s a digital investment area that’s consistently coming up as a top investment area. On the sales side, you’re seeing heavy investment in inside sales, heavy investment in commercial operations and then also having investment in clinical type resources, which are all needed. And so those are three sales investment areas. The traditional field organization, people are investing in it, just not at the same rate. We actually saw coming in the pandemic that those who invested in research who are investing in resources other than the traditional field rep were actually outperforming their peers, and we expect that trend to continue post-pandemic.
DB: You know, I guess we touched on the COVID impact a little bit earlier in one of your responses, but, you know, just touch on that one more time given, given how pervasive and lengthy the COVID impact has been. 2022 – What are folks thinking as far as what the impact is going to be relative to COVID and all the things associated with that?
CA: And our latest roundtable, we had a poll out there and actually I was surprised by how many people think COVID is still going to be still posing risk to organizations and in a higher risk level than we had thought coming into the VRT. So in the industry, they’re still concerned about COVID because it does impact elective procedures, which most of this industry elective procedures drive revenue for most of the companies that we deal with. And so if you start seeing pockets of the country shut down elective procedures because of the worries around a new variant that poses risk on the revenue side. The other thing is I mentioned this earlier it’s inflation and supply chains. Those are the two, and they probably go hand in hand right now.
DB: For our listeners, if there’s one thing you’d say, Hey, this is one priority heading into 2022, likely something you can actually control. Some of these things we’ve talked about, you’re just going to have to be dynamic in the response to. What’s the one thing you would use as a priority heading to 2022?
CA: So I’m actually going to give you a two. But one that comes up time and time again, digital, continue to invest in digital. It’s here to stay. And just because you started getting rep Zoom or teams or some of these virtual interaction technologies, that was just the starting point. There’s significant investment that needs to be put in digital. It starts with what is your buyer journey and then mapping a series of play of customer interactions on that buyer journey to identify what digital plays you need to run. Along alongside of that as you’re doing buyer journey work, take a customer success mindset. Given staffing shortages, some of the challenges our customers are going through, they need extra support. And as we go into the next phase in 2022 is they’ll remember those who supported them through the staffing shortages or backorder problems that companies are having. It’s not just about sales and customer interactions anymore, it’s really about how do we make our customers more successful?
DB: Yeah, makes sense. I mean, if you’re thinking about situations where talent is difficult, scarce, your customers’ needs and expectations have changed. There’s a lot there to unpack, but sometimes I think customers are going to expect and demand it candidly. All right. Well, you know, great at always Craig and always great to talk to you. For those of you listening, thank you for joining us. If you’d like to hear more about our latest research, get involved in our events. Contact us about any of your needs. Please head out to the website and we’d love to hear from you. Thank you and see you next time.
