Medical device companies can learn from Starbucks
As global medical device companies try to take on more of the care continuum, they might be able to turn to that little Starbucks coffee shop just around the corner. It might seem sacrilege to compare the intricacies of neuromodulator with a perfectly brewed, expertly crafted cup of joe, but here I find myself. Why? Because it's not just medtech's products that need to become more innovative, but its business model as well.
PwC Principal of Innovation and Strategy Ed Yu said coffee shops could teach medical device companies in the ways of changing business models from solely product-reliant. (Their recent report on medtech and innovation suggested that, too.) They could grow to offer "that one-stop shop, that Starbucks experience."
What is the major difference between medical device companies and coffee shops right now? Everything about Starbucks, from the faux leather sofas to the music and lighting-is engineered and marketed to make me happy. Because successful coffee shops know they're not selling coffee. They're selling an experience.
Many of the top medical device companies are still only selling coffee. But there are a few things these industry giants can learn to sell an experience like Starbucks. (Hint: The patients are consumers now.)
1. Create a sense of community.
At the end of the day, if the coffee shops only sold coffee, most of us would stay home and brew it ourselves. But Starbucks and your local coffee shops (shout out to Greyhouse and K.D.'s!) have figured that out. It's why they provide free WiFi, comfortable chairs and couches, play quiet acoustic muzak and invite local artists to display their work, writers to read their work and bands for charity benefits. If the coffee shop isn't at the center of some sort of community-whether it's a relaxed corporate environment like Starbucks or the poet's refuge in an old factory town-it's dead.
To be fair, I don't foresee a future where thinking about Boston Scientific (BSX) pushes me out the door with a feeling of warmth and instant gratification. But the companies do much more than Starbucks-they save lives. Why don't patients feel more connected?
A recent map shows those who work in healthcare and the diabetes patient population they attempt to manage are in separate social media spheres. Why not have informal diabetes meet-ups so R&D engineers who build the drug-delivery methods and physicians who prescribe insulin or glucose meters can meet directly with patient populations? (Then have they actually interacted with one another.) One good example: St. Jude Medical (STJ) has actually worked with national governments in Asia to raise awareness for heart disease over the years. But preventative patient education doesn't have to be drab. Perhaps have these meetings at a coffee shop (where patients don't feel pressured, poked or prodded)?
What is the easiest way to create a kinship between your company and the patient who's literally attached to your device? It's time to fork over the data - In digestible, legible, well-designed formats. This will make patients trust your product, trust your brand and be focused more on wellness.
2. Acquire within your sphere of influence but outside your comfort zone.
Thursday, Starbucks opened its first Teavana teahouse. That's right. No coffee. The company wants to break in to the $90 billion worldwide tea market. But that's not all folks, the company's also keeping a hand in the real food and juice businesses. These are small steps, but big risks, and a way to include some consumers it might not otherwise have gotten and extend services to long-time customers. Think of this as the caffeine care continuum.
Of course, one of the biggest examples of medtech behaving in this way is Medtronic's acquisition of Cardiocom this summer. The biggest thing a medical device company can do now to position itself for future success is to take a larger chunk out of the care continuum, particularly for population health management for chronic diseases. Yu said these kinds of acquisitions aren't just about products, but about "expanding internal value" and "relevance to customers."
"Some of the best ideas we find are still external. . . . If we see something better from the outside, we need to be prepared to buy it," Edwards LifeSciences (EW) Chief Scientific Officer Stan Rowe said.
A word to the wise:Rowe said integrating the culture of those acquired companies, as well as their talent, is the hardest part of an acquisition, but key to the success of the partnership.
3. Pumpkin spice latte, anyone? #PSL, people.
Look at the company's far-reaching #PSL campaign. As this global company moves into new terrain (selling real pastries, selling upscale, expensive tea), they remind customers what they love that the brand already offers. This one goes back to experience. It's exactly why Starbucks turned a mediocre pumpkin-flavored coffee drink into the decade-long #PSL craze. They aren't selling me just another pumpkin drink. They're reminding me it's fall, a season for warm drinks and change on that long drafty wind toward the holidays.
Not to mention, they're distracting the everyday consumer from risky innovation-a teahouse with no coffee or moving into the true food industry-by reminding us what they make that we already love. Don't just constantly promote every incremental improvement your company has made. (Starbucks coffee isn't the greatest in the land. There's a reason it doesn't have a hashtag.) Take the one or two products that are your most innovative and most define how your company is helping save lives and reach out to patients that way. Create a fanbase that will get excited when you open your metaphorical teahouse and will defend you if innovation causes some failure.
How many patients are out on Twitter, YouTube and Facebook raving (positively) about your pacemaker? Do you know about them? You should.
Rowe said patients have "always been last but not least." No longer. They're at the front of the line and the center of successful healthcare business models.
[Photo by - Chris Breeze]