How a Plummeting Medical Device Company Drove the Competition Out of the Market
A medical device company’s flagship product, which was expected to drive growth, was a system for surgery that consisted of a powered handpiece and control box, as well as disposable blades to be used for each surgical case. After just going public and being valued at $96M, this company began to get concerned when it missed its first quarter numbers and the price of its shares dropped by 62%.
Reliant on this product, the company needed to implement a strategy that would contend with its competitor that had 90% of the market share that was driven by powerful national contracts. To match the competition, this client placed the powered handpieces in facilities at no cost, and the disposable blades were sold at a 50% discount of their list price.
Despite having a superior product, sales were not being met, more than $2M in field inventory was sitting in hospitals, the company was going broke and could not compete with the market-share leader.
- On-site Strategic Intent to analyze existing sales process, productivity, and profits
- Created a customized strategy on how to engage in higher level conversations (with the
doctors and administrative staff) in order to IMPACT at a different level
- Karr IMPACT! System™ Integration: resulted in successfully selling unit based on value and competitive differentiation
Within a year 50% of the competitor’s business was taken, field inventory was cut by 50%, discounts were cut by 70%, and sales grew by 36%. In the second year another 50% of whatever business the competition had was taken, field inventory was cut again by 50%, discounts were reduced to 50% and sales grew by $33M. By the third year the competitor had virtually no market share left, Ron Karr’s client was dominating the market, selling both the power units and the disposable blades at list price, resulting in another successful year with sales growing by $35M.
Within three years, $2M of field inventory placed in hospitals was reduced to $50K of field inventory that was primarily placed for demos only. Nearly all of the sales were made at list price, the company became a market leader and completely drove the competition out of the market.
In one of the highest valuation acquisitions in medical device history, the company that was valued at $96M three years earlier was sold for $1B, 10x the public valuation.
CLIENT BUSINESS SUCCESS METRICS:
- Increased client’s incremental sales revenues by over ¾ Billion dollars (Karr IMPACT! System™)
- Landed a 10-year agreement worth $200M (client repositioning & negotiations)
- Knocked competitor out of the market and grew sales by $33M (new business growth strategy)
- Within three years, company once with 62% decrease in shares and valued at $96M was sold for $1B (sales strategy, team leadership)
- Consulted with a company merger worth $2B to combine two disparate sales forces (sales strategy)
- Helped client close a $5M deal with a new customer (negotiation and value positioning)
- Grew a $24M company to $30M (senior team/CEO coaching, recruitment/training of sales teams, growth strategy)
- Turned around a $12M company and increased a buy-out offer from $8M to $20M
- Client doubled its business with fewer bids (450 to 250)
- Client closed largest consulting contract at $70K (outcome selling)
How a Chemical Manufacturer Changed Its Customers’ Buying Process
A company created the technology to significantly cut the cost of mining copper and as a result saved copper mines from going bankrupt. The competition reengineered the product/technology and left the company that developed the technology with only 60% market share. The client’s market share of the largest mining organization was only 25%. All of its mines were up for bid and the client wanted the new deal to achieve a market share with that customer of 75% on a negotiated deal, not a bid.
- Process & Strategic Collaboration: to identify challenges, company goals, scope of contract, and execution
- Created an innovative differentiation strategy that resulted in other bidders having to pull out because they weren’t qualified and didn’t have what the client was looking for. The strategy was to elevate the conversation above the product, leverage core competencies, and to help the client achieve results in areas other than the product.
- Designed and trademarked a Minesite Services Program® (MSP) that differentiated the client from the rest of the competition
- Quarterly Evaluations: identify future goals, different players, and positioning
- Enterprise Sales & Negotiation Coaching: customized approach to expand the scope and negotiate a deal for 10 years versus a single product bid.
After 1.5 years, the company went from being perceived as a commodity player to a vendor critical to their customers’ success. The Result – A game-changing deal valued at $200M over 10 years without a bid!