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    ConvaTec sets healthy pricing strategy with Phocas data insights

    ConvaTec is a global medical products and technologies company with innovations that advance wound care, stoma care, continence and critical care. ConvaTec deployed Phocas in 2015, and the following year, the company’s 30-plus sales team achieved record sales. The success was attributed to better visibility of their data and the ability to use data to support pricing decisions.

    The company’s mission is to help improve the lives of the people it touches, especially individuals living with chronic illness. ConvaTec uses Phocas data analytics to review the buying habits of its customers, measure the company’s impact in Australia and New Zealand, and report to its Asia Pacific headquarters in Singapore.

    The last couple of years haven’t been easy for the Australian arm of the business with a product recall and a delay in the opening of a new manufacturing plant. Despite the challenges, the med-tech company is growing. ConvaTec is experiencing an uptake of its strategic brand lines such as Aquace™ and FoamLite™ dressings and is putting more of an emphasis on data-driven decision-making.


    Being price competitive in the hospital tender system is essential

    Hospitals (public and private) are the majority of ConvaTec’s customer base. Most of its products are introduced to patients after stoma surgery or when they have a chronic illness and are being treated in a hospital for a stagnant or infected wound.

    Public hospital purchasing systems are complex and organised through state health boards. The health boards issue competitive tenders which determine the products that will be available to the hospitals.  The hospitals manage their budgets and often source products from a central warehouse which has the products that were listed as part of the tender process.

    Nicola Harris, financial planner and analyst at ConvaTec, explains, “Hospitals decide who they want to buy from and what they're willing to pay. Given that they're our biggest customers, it is important that we make it onto a hospital’s preferred buy list. Price plays a huge part in keeping hospitals onside, so that’s where Phocas has helped us the most. We use Phocas to go over every price point in every tender.”

    “Our pricing analyst has all the price history in Phocas, so she knows what hospitals paid for particular products in previous years and the purchasing power of the hospital compared to other customers,” said Harris. “This information helps determine a reasonable price for each product in the tender. We have to be extremely diligent with any decreases to the price point we offer because if volumes don’t increase, our revenue takes a hit.”

    She added, “It is not unusual for customers to ask us what they've purchased from ConvaTec, particularly the health boards who we provide a lot of reporting to. Given they hare a public health system they don’t have the resources to invest in reporting tools to the same level as a private company.”

    Two parts of business want different insight

    It is not uncommon for companies to run a number of reports for different departments. Convatec, however, takes the time to produce ‘two views of the world.’ One view is called ‘corporate,’ which the finance, senior leadership team and head office in Singapore need to monitor on overall sales and costs. In ‘corporate’ view, sales are recorded as soon as the products leave ConvaTec’s warehouses.

    The other view is called ‘in-market,’ which helps the product and sales team determine when a product makes it to the end customer. Knowing who the customer is, and what they are buying and not buying, gives ConvaTec an understanding of how products are being used. The sales team can then better target end-user product education and sell more.

    “When compiling this view, Phocas is most helpful because the software allows us to include the data we receive from our largest third-party distributor, Clifford Hallam. This information comes in daily and outlines where our products have been on-sold, providing another layer of insight such as products being sold to veterinary clinics,” says Harris.

    In the coming months, ConvaTec plans to add seven new data sets into Phocas, including the number of hospitals in each state, aged care facilities and specific information the number of new ostomates in each state each month.

    “I now manually add all our in-market data into an Excel spreadsheet, which is 50GB in size. At this point, the spreadsheet often dies so I can’t wait until I use Phocas for the entire ‘in-market’ view,” said Harris. “The thing I love about Phocas is that it is intuitive. I remember finding the nesting tool during one of the monthly online training sessions. It revolutionised how we pull data. We can look at the top 10 customers by a multiple of variables (per region, per sales, per product).”

    For more information about how ConvaTec is using Phocas to sell more strategically and create competitive pricing strategies click here.

    Written by Phocas Software
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