The diagnostics industry has evolved rapidly because of COVID. Some areas such as molecular and point-of-care diagnostics have seen a surge in demand as new standards are established for infectious disease testing while other areas such as clinical chemistry have experienced declines as a result of lower patient volumes. A major healthcare diagnostics company, whose accounts spanned acute facilities, physician offices and references labs, saw these changing dynamics and understood the need to adapt their commercial organization to capitalize on the opportunity. As sales leadership considered how to structure the future commercial organization, they saw an opportunity to sell additional products within their portfolio, which had grown recently due to an acquisition, to their current customers as well as the ability to target new customers with a more robust offering.
Success lay in transforming the future commercial organization, and company leadership identified the need for subject matter expertise and project management support for the multiple work efforts that they were set to undertake. They contacted Alexander Group to leverage our experience designing and deploying commercial models within the diagnostics industry. Commercial leadership had previous success working with Alexander Group to assess and create go-to-market (GTM) strategies that accelerated growth rates from low single digits to over 10%. Alexander Group also provided proprietary diagnostics industry benchmarks to guide the blueprint for execution.
Alexander Group structured the engagement into four distinct phases to transform the commercial organization:
Alexander Group first completed a current state assessment of the commercial operating model. This approach included interviews with more than 50 executives and individual contributors while conducting account concentration analysis for the organization.
Alexander Group worked closely with the company’s leadership team to design and build out the future state model details, including customer coverage, organizational structure, sales compensation and change management requirements.
Complimentary product offerings in multiple account segments indicated a substantial opportunity to cross-sell where the company had a significant footprint in one product set. The expanded product bag changed the prioritization of accounts to reflect the total opportunity available.
Based on these insights and analysis of sales operations capabilities, Alexander Group developed recommendations to achieve revenue growth expectations by realigning sales roles while balancing cost impact.
Originally, the company had a headcount retention and cost synergy target associated with commercial optimization, targeting a retention goal of 88% of their headcount, including both displaced roles and voluntary attrition.
However, Alexander Group recommendations limited displaced headcount to only 4%, resulting in total retention of over 90%. The cost synergy forecast from the commercial optimization was 11% of the variable cost in year one, meeting the target set by leadership.
Commercial planning and M&A present multiple challenges for every sales organization. Uncovering the potential for revenue growth and market expansion is necessary, but it takes industry expertise. Alexander Group supports industry leaders in identifying hidden opportunities and setting the stage for future growth.
Alexander Group designs compensation strategies for leading healthcare companies that provide value, reduce cost and incentivize behaviors that drive growth. Join us for one of our future virtual roundtables that provides a platform for industry leaders to discuss and share insights on current challenges and opportunities.
Alexander Group understands your revenue growth challenges. Since 1985, we’ve served more than 3,000 companies across the globe. This experience gives us not only a highly sophisticated set of best practices to grow revenue—we also have a rich repository of unique industry data that informs all our recommendations. Aligning product, marketing, operations and finance efforts behind a successful sales organization takes insight and hard work. We help the world’s leading organizations build the right revenue vision, transform their organizations and deliver results.