Blog | 2/19/2025

6 Best Practices in POC Diagnostics Customer Segmentation

By Christopher Karras, Vice President, and Donna Hochberg, PhD, Partner and Managing Director

In our last blog, we discussed why and when data-driven segmentation is needed to create value by generating higher revenue and growth while reducing waste in both product design and marketing efforts. (Check Out Unlocking Market Potential: The Power of Customer-Focused Strategy and Segmentation in Diagnostics)

Today we’d like to dive deeper into the how and the best practices for customer segmentation in the clinical in-vitro diagnostics industry.

In our >30 years of experience supporting POC diagnostics clients, we’ve found these 6 strategies critical to driving successful product development and commercialization:

Rather than trying to find a market for a product, focus R&D on solving customer pain points and satisfying unmet needs. This will help avoid building solutions looking for problems.

Different product features and test menus will be attractive depending on the needs of each customer segment that is identified. For example:

Respiratory Infections: Top settings may include urgent care centers, retail clinics, primary care offices, and at-home testing. Ease of use and rapid turnaround is valued across settings which are testing frequently for flu, strep, RSV, and COVID. The importance of price increases in the home setting where consumers are often pay out-of-pocket. On the other hand, respiratory testing is usually not a core function in specialty care settings like cardiology, obstetrics and gynecology, and dermatology.
Sexually Transmitted Infections (STIs): In addition to certain physician offices, target segments for STI testing could be community health clinics, retail settings, and at-home testing, among others. Community health clinics see a high volume of patients needing screening, retail settings offer convenience for walk-in patients seeking rapid testing and treatment, and at-home testing provides a discreet option for privacy-conscious consumers. Diagnosing a sexual transmitted infection such as Chlamydia/Gonorrhea (CT/NG) quickly is highly valuable in the professional physician office or community health clinic because it allows for faster treatment initiation with antibiotics and prevents losing the patient to follow-up. On the other hand, in the hospital STI testing is not typically an acute care priority for rapid POC testing and is often handled by labs.
Gastrointestinal (GI) Infections: If available, rapid POC GI testing could be attractive in certain primary care clinics who are frequently responsible for first-line management of GI symptoms; this segment would benefit from a rapid GI test, although the sample type can be a challenge. Retail clinics offer convenience, and at-home testing provides privacy and ease of sample collection. On the other hand, retail clinics would likely be less attractive for GI testing because of the specialized stool sample handling requirements, making the setting less suitable.

And the list goes on as there are dozens of clinical areas across various segments, each with their own pain points and unmet needs such as diabetes, cardiovascular, renal, and tropical disease just to name several more. As such, companies should understand customer pain points and unmet needs before investing in innovative R&D because this approach increases the likelihood of developing POC products that are both relevant and successful in the market. First, the risk of product failure is reduced because when R&D is informed by customer pain points, resulting innovations are more likely to address real problems that customers and patients are willing to pay for. Secondly, understanding pain points prior to R&D investment helps ensure that the product’s value proposition is clear, compelling, and tailored to a specific segment’s needs. And finally, by starting with customer insights, R&D can focus on solving specific problems, reducing the need for downstream iterations.

There are always exceptions to the rule, so this is not to say that there are not rare instances when pursuing R&D before fully understanding customer pains points makes sense. For example, when creating a truly novel product – a disruptive technology – customers don’t yet realize they have a need. However, even in these cases, early market validation and understanding customer problems can still improve outcomes.

The bottom line is that customer pain points and unmet needs provide guidance for R&D, ensuring that investments aligned with real-world demand and minimizing the risk of wasted time, money, and effort. Developing products without understanding the market is like trying to find a needle in a haystack.

Traditional POC segmentation methods often focus on care settings or practice size, yet there are other key considerations. While using copycat segmentation schemes might seem like a shortcut, it comes with risks. Relying on these schemes often leads to a lack of differentiation, blind spots due to overreliance on competitors, and potential misalignment with company strengths and capabilities.

To be sure, there are many traditional variables that can be used to segment POC testing markets, such as sites of service, size of practice/setting, and geography. However, there are just as many other variables to consider such as if the customer is part of a health system, if the customer is reimbursed fee for service or not, relative proximity to a full service lab, etc etc. All of these customer characteristics can influence the nature of patients seen (e.g., screening versus symptomatic, acute versus chronic diseases, etc) as well as technology, test menu, and other preferences. Health systems, for example, are important to consider because they encompass a diverse range of care settings – hospitals, outpatient clinics, and urgent care centers – offering numerous opportunities for device placement. Additionally, health systems often manage large patient populations and have centralized buying processes, making them high-value accounts capable of driving significant volume and growth. These dimensions allow marketers to slice and dice markets in myriad creative ways. In fact, if there are 15 variables on which the market can be segmented, and we want to examine all three-way combinations, we have 455 ways to segment the market!

As we highlighted in a prior post Unlocking Market Potential, it’s possible that your competitors might see the same segmentation variables that you do. But even if they do, combinations and interpretations of the same set of observations often differ wildly and therein lies a source of value creation. Noticing and understanding something others don’t see or are unable to respond to provides proprietary insight and potential competitive advantage.

So, being original in developing your customer segmentation will improve your odds of discovering customer groups that competitors have overlooked, having meaningful differentiation from competitors, and ensuring alignment with your company’s unique strengths and capabilities.

When developing customer segmentation schemes, all too often there is overreliance on outdated rules of thumb or gut instincts. De-risk the segmentation development process by injecting it with the most-up-to-date and rigorous qualitative and quantitative insights, which are crucial for building accurate, actionable, and impactful strategies.

Granular Insights: Primary market research helps gather insights about customers’ pain points, preferences, and behaviors, ensuring segmentation is grounded in real, relevant data. A granular approach that gathers input from clinicians, lab directors, POC coordinators, and other key stakeholders like KOLs, payers, and patients/consumers allows the customer base to be broken down into highly specific, nuanced segments that reflect true motivations and needs.
Improved Accuracy and Relevance: Relying solely on secondary data (which is in relatively short supply in the Dx industry in comparison to pharmaceuticals, for example) or intuition can lead to outdated or incorrect assumptions. Rigorous primary research ensures a data-driven segmentation reflects current market dynamics and customer behavior. As such, strategies should resonate with customers better.
Data-Driven Decision Making: Together, qualitative and quantitative insights offer a more complete picture by combining the depth of qual data with the objectivity of quant data. Whether performed together or separately, rigorously analyzing these data helps identify the most profitable customer segments to target while optimizing resource allocation and ROI.
Adaptability to Market Dynamics: By collecting up-to-date primary data, a marketer can spot shifts in customer preferences, emerging needs, or new opportunities and adjust segmentation accordingly. The approach can help the firm stay relevant over time by essentially future-proofing strategies.

Customers seeking POC solutions across different clinical areas, settings, and geographies will weigh clinical, workflow, and economic needs differently. Finding the right balance between these factors in each granular segment is crucial for product success. How POC value propositions could differ across the setting dimension, as an example, include:

In the hospital emergency department setting include speed to deliver results within minutes, streamlined workflow to integrate seamlessly into the fast-paced ED environment, and the ability to reduces bottlenecks and expedite patient throughput.
In the physician office, same-visit rapid results facilitate immediate diagnosis and treatment decisions, such a prescription for an antibiotic for strep or a STI. Patients (and physicians) are happy because it reduces the need for follow-up visits. It’s also important for tests in this setting to be easy-to-use and compact due to space constraints.
In a retail clinic setting, such as a CVS Minute Clinic, value is created by tests that offer convenience by supporting walk-in patients with rapid results. Ease-of-use for non-technical staff and cost-effective testing options for out-of-pocket cash consumers are also critical value drivers.
For at-home self-collection with lab processing, value is driven by enabling patients to collect samples at home on their own time. It provides the accuracy and trustworthiness of lab processing while also appealing to privacy-conscious individuals.

The bottom line is each setting's value proposition reflects its specific clinical, operational workflow, and economic considerations.

Once relevant segments are identified, evaluating and prioritizing them for targeting requires evaluating them on their attractiveness to the company. The process involves developing criteria for an optimal target market, assigning weights to the criteria, developing a rating system, and evaluating each potential target segment. Criteria should vary based on the company’s unique situation, but typically include, among others, segment size and growth potential, competitive intensity, and strategic fit with the company's goals, strengths, and capabilities. This rigorous evaluation helps manufacturers develop efficient customer-targeting strategies that focus resource investment, drive adoption, and boost return on investment.

Post-launch, monitoring and adapting to market dynamics over time is crucial for customer segmentation because customer needs, behaviors, and external conditions change constantly. Trends, technology advancements, and societal shifts shift customer preferences and priorities. And as markets evolve, new pain points may emerge for customers. Updating your product’s segmentation helps to ensure it stays relevant and appealing. Another reason to monitor and adapt your segmentation is because competitors may enter or exit the market, or they might adjust their strategies and tactics in your target segments. Staying proactive helps defend your position and potentially capture unexpected opportunities. Emerging trends such as with antimicrobial resistance (AMR) testing and CNS testing can create entirely new customer segments. Monitoring and adapting to market dynamics helps ensure resource allocation is aimed at the most promising segments and will help your business remain competitive and aligned with customer expectations.

Want to hear more? Reach out to our Diagnostics team at diagnostics@healthadvances.com

Authors:

Christopher Karras, Vice President, Member of Health Advances’ Diagnostics leadership team
Donna Hochberg, PhD, Partner and Managing Director, Head of Health Advances’ Diagnostics, Precision Medicine, and Life Science Tools & Services practice