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Healthcare

Navigating Market Disruptions with Effective Go-to-Market and Compensation Strategies

Author
Tray Chamberlin Principal
Author
Ann Marie Verhamme-Alexander Group, Inc.
Ann Marie Verhamme Director

Key Areas to Align Go-to-Market Models and Compensation Strategies

The healthcare industry is known for its dynamic and rapidly changing landscape, made more complex by workforce challenges, financial distress, consolidation and evolving patient care models. To mitigate these challenges, healthcare companies are in the midst of a transformation. As the industry evolves, three key areas drive shifts in the way sales leaders look at go-to-market models and compensation strategies for MedTech, digital health, healthcare services and health insurance companies:

  • Evolving Market Landscape: Exploration of the macro trends and realities shaping today’s landscapes. While these may not be specific to commercial models, their impact on the commercial model is significant.
  • Commercial Strategies to Drive Growth: The strategies top organizations are employing to drive growth, given the understanding of what is impacting the market and the ability to sell.
  • Sales Compensation Strategy and Trends: A deep dive into sales compensation strategy, trends, and best practices that reinforce the go-to-market strategies observed.

According to Alexander Group research, healthcare executives expect a 15% growth across healthcare in 2024 despite industry challenges, with companies optimistic about their revenue growth objectives and ability to deliver. As companies aim for double-digit growth figures, they are also preparing to do more with the teams in place, indicating less anticipated reduction or addition to existing teams but instead driving productivity per headcount and expanding roles eligible for sales compensation.

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Six Go-to-Market Imperatives

With an eye on achieving these double-digit growth targets, there are six go-to-market imperatives for go-to-market models for healthcare vendors and suppliers:

1. Move beyond single rep models

Diversify the go-to-market strategy to include various roles such as customer success managers (CSMs), business development representatives (BDRs), and technical specialists.

2. Strengthen go-to-market and delivery interlock

Ensure that the customer journey extends beyond the initial sale to include implementation and ongoing support, emphasizing customer experience.

3. Differentiate with value-added services

Augment products with services that support HCPs and address broader provider challenges.

4. Embrace AI

Integrate artificial intelligence into enablement plays for sales, marketing, and customer service teams.

5. Continuously evolve commercial models

Stay agile and adaptable to keep pace with the market and outperform static competitors.

6. Adjust sales compensation strategies

Align compensation with broader commercial strategies and drive desired behaviors to support the high-growth model.

Industry Go-to-Market Imperatives Begin with Upstream Elements and Culminate with Sales Compensation
Industry Go-to-Market Imperatives Begin with Upstream Elements and Culminate with Sales Compensation

Profitability, Performance and the Potential of AI

One of the strongest motivators driving companies to implement changes is profitability measures in sales compensation plans. For roles with considerable influence over pricing and contract terms, such as national account managers, profit-based incentives are more common. However, for most individual contributors with limited pricing control, incentivizing strategic, profitable products may be a more effective approach.

Another key focus for healthcare companies is driving an increased pay-for-performance culture through their sales compensation program. A majority of leaders reported driving productivity as the primary plan design challenge. Pay-for-performance plan design best practices include clearly linking business performance to rewards, driving individual accountability in the plan, aligning pay mix to degree of persuasion, and differentiating between top and bottom performers.

In the realm of talent practices, there is a noticeable trend towards more hybrid work environments and employee-friendly policies. The potential role of artificial intelligence (AI) in sales compensation management and plan administration is also being explored. However, it is worth noting that many companies are still in the early stages of adopting these AI-driven strategies.

Healthcare companies must be prepared to continuously reassess and adapt their go-to-market strategies and compensation plans to navigate the industry’s changes effectively. As the Alexander Group continues to research and build a community around revenue growth in healthcare, the learnings and insights from such discussions will be critical in shaping the future of healthcare sales and service functions. For healthcare leaders looking to stay ahead of the curve, these shared insights offer a blueprint for driving growth in a market that demands innovation, agility and strategic foresight.

Alexander Group offers a spectrum of services to MedTech, digital health, health insurance, healthcare services and biotech companies. The healthcare practice is committed to propelling top-line revenue through strategic and execution-oriented programs. Specialization spans various areas within the marketing, sales and services domain, including commercial strategy and planning, blueprinting market wins, addressing shifting market realities, programmatic fixes, job design, segmentation, digital motions and resource deployment. Sales compensation design and marketing optimization are among the key offerings.

For more information on effective go-to-market and compensation strategies, please contact an Alexander Group Healthcare practice lead.

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