Healthcare Cloud Business Models: Creating Customer Value
The Healthcare and Life Sciences (HCLS) industry has resisted the aptly named, “Age of the Customer” and digital transformation for too long. With new entrants transforming the industry, resistance is now futile. With patients taking control of their healthcare experience and ownership of their data, a shift to healthcare-based cloud business models is necessary to compete in today’s digital marketplace.
HCLS businesses are under more pressure than ever before, not only around pricing, but also due to an increased demand for innovation and value. Knowledgeable, savvy patients expect the same user experience that they receive from consumer cloud applications and services when it comes to their care. Success lies in your ability to converge digital access with user experience to encourage easy adoption of services and features to build long-term relationships. You must be able to balance personalized care with the efficiencies provided by technology, such as patient portals that allow 24/7 access to health information. Connected care is no longer a nice to have, but a critical component of innovation and growth.
These changes have introduced new business models for healthcare manufacturers and providers that are designed to deliver complex and highly innovative products to market via the cloud. New products, medical equipment and machines are utilizing the Internet of Things (IoT) to provide a connected customer experience that drives better and measurable medical outcomes. Hospitals, clinics and patients are willing to pay for add-on services that offer information access through portals and dashboards.
The challenge is how to cost-effectively manage operations that drive the value of these services and ultimately subscription renewals. Manufacturers need to continue to drive warranty conversions, while offering additional services that maximize customer lifetime value.
Smarter healthcare and life sciences companies need the ability to:
- Deliver connected, personalized care
- Design innovative products and improve time to market
- Maximize operational effectiveness, while minimizing costs
- Retain and grow customers
Much like SaaS and other technology businesses that have made the move to cloud business models, HCLS companies need to adopt best practice processes to manage customer engagement, expansion and extension. Growth is highly dependent on forming a discipline around customer success, warranty conversions and service renewals. This operational innovation is equally as important as product innovation. So what does it take to get it right?
Best-in-class companies start by implementing a holistic Revenue Lifecycle Management (RLM) methodology. RLM includes customer engagement playbooks that allow proactive outreach to warranty customers. With skilled experts who can clearly articulate the benefits of an extended support and maintenance contract, these companies routinely convert and capture more service contract revenue. Using a RLM approach, companies can increase profitability and drive up warranty conversion rates by 10 to 15 percentage points to capture millions in previously missed opportunities.
And that is just a start! RLM best practices also provide playbooks to identify cross-sell and upsell revenue opportunities.
The pressure in healthcare to improve operations and reduce costs cannot be at the expense of coordinated care and connectivity. Growth comes from the adoption of healthcare cloud business models, as well as product innovation and operational improvements. As the healthcare and life sciences business landscape continues to shift rapidly, you need a strategic roadmap for success. Learn more about how RLM can help you grow revenue faster by reading Forbes Insights: Mastering Revenue Lifecycle Management or watching our Webinar On Demand.
Authored by Michele Ballinger, Solution Marketing for ServiceSource.
In her role, Michele provides market insights and best practice advice to customers.
When she is not writing, you can find her hiking and photographing the breathtaking