Colin Callow, Life Sciences Advisor at the Business Growth Hub, offers guidance to businesses operating in the life sciences sector around the virtue of value proposition to NHS policy-makers.
A substantive value proposition is critical if a small business wants to progress from a concept/prototype to building a successful company, especially in the healthcare sector.
In its simplest terms, a value proposition is a positioning statement that explains what benefits you are providing for a healthcare organisation and how your capacity and capability to deliver those benefits well.
It describes the target decision-maker (the buyer) and demonstrates a clear understanding of the problem(s) that the company intends to solve, and why the proposed solution is distinctly better than the alternatives.
As you set out to create a compelling value proposition, we need to consider the following four steps: Define, Evaluate, Measure and Build.
Defining the problem, its burden and validating the need for your proposed solution
A significant part of defining a value proposition involves answering the following questions.
Is the problem Unworkable?
Does your solution address deficiencies in and/or fix a broken healthcare delivery process where there are real, measureable consequences to inaction? Are patient outcomes and experience currently being compromised due to the lack of a solution?
Is fixing the problem Unavoidable?
Is solving the problem driven by a mandate with implications driven by fundamental requirements associated with regulatory body requirements (CQC/NICE/MHRA) or is it driven by a fundamental requirement for better resource efficiency?
Is the problem Urgent?
Is it one of the top few priorities for the NHS? In selling to the NHS, you’ll find it hard to command the attention and resources to get a buying decision if you fall below this line.
Is the problem Underserved?
Is there a conspicuous absence of valid solutions to the problem/unmet need you’re looking to address? Focus on the whitespace in a market or segment. If the answer is yes – then you know the market is primed for the solution.
Qualify the Problem:
Is it “Blac and White”?
Is it BLAC (Blatant, Latent, Aspirational, and Critical) and does it addresses a WHITE space in the market, allowing you to capitalise on an open area of opportunity?
In the current healthcare market, it’s important to address problems that are blatant and critical, as they are far more acute than those that are latent and aspirational and therefore likely to be closely aligned to key organisational strategic objectives.
Blatant and critical problems stand in the way of effective and efficient care delivery and put NHS organisations at risk. Latent problems are unacknowledged, which means they often require costly and protracted sales efforts.
Aspirational problems can frequently be looked on as optional, which can be the hardest of places for a healthcare business to sell their product or service.
Evaluating whether your breakthrough product or service is unique and compelling
After the problem to be solved has been clearly determined and its criticality has been validated, the next step is to articulate what is unique and compelling about your breakthrough product or service.
A useful approach is to think of a new product or service in the context of the 3Ds:
- (D)iscontinuous innovation,
- (D)efensible technology, and
- (D)isruptive service model
Considering the above in combination, describe how your product or service will be brought to bear and what makes it truly compelling to key clinical and non-clinical stakeholders?
- Discontinuous innovations – offer transformative benefits over the status quo by looking at a problem differently.
- Defensible technologies – offers intellectual property that can be protected to create a barrier to entry and an unfair competitive advantage.
- Disruptive service models – yield value and cost savings that help the provider meet growing demand or improve access.
Simply having a product or service that is faster, cheaper and better is not enough to make it compelling, but evaluate it in 3D and you can really open up the potential for a productive dialogue with healthcare decision makers.
Measuring potential customer adoption using the gain/pain Ratio
Too many SMEs are so focused on the features they deliver that they sometimes fail to examine how hard it will be for customers to adopt their product and/or service − the gain/pain ratio involves measuring the gain you deliver the customer vs. the pain and cost for the customer to adopt it.
Many healthcare decision-makers are looking for non-disruptive disruptions: technologies, products and/or services that offer game-changing benefits with minimal modifications to existing processes or clinical environments.
Non-disruptive is critical to SMEs bringing innovative products or services to the healthcare market since the gain delivered will also be discounted by the risk associated with buying from a young company.
A successful SME will, therefore, need to deliver an order of magnitude improvement over the status quo. If a proposition can’t deliver a 10x gain/pain promise, healthcare decision-makers will typically default to “stick” rather than bear the risk of a procurement decision.
Building the Value Proposition
Following the defining, evaluating and measuring steps, the value proposition can now be constructed, using the following framework.
- For (target customers)
- Who are dissatisfied with the current alternative(s)
- Our product is a (new product or service)
- That provides (key problem-solving capability)
- Unlike (the product or service alternative).