Monthly Archives: March 2011

Managing a Product Portfolio

Carlton Hoyt 7:21 pm , March 31, 2011

All companies making and / or selling life science tools and services have a product portfolio, but often these portfolios are not viewed in a strategic manner. While aligning current company competencies with current marketplace needs is a simple way to have successful products, a broader view of the product or service portfolio is necessary to ensure greater corporate, and long-term, success. In this post, I’ll go over some of the broader considerations of managing a product portfolio.

Note that many companies discuss product portfolio management to effectively be the new product development project selection process. While new product development project selection is an important part of product portfolio management, I believe this viewpoint to be too narrowly focused, as existing products need to be factored into portfolio management as well, and there are issues related to portfolio management that are indeed independent of new product development. I will discuss new product development project selection in more depth in a later post, as it is a critical business process, but for this post I will simply try to address some common questions relating more globally to product portfolio management in the life sciences.

How many products are the right amount?

Deciding how many products should be in your product portfolio is a difficult question, but there is a correct answer that requires balancing a multitude of factors. First of all, and arguably most importantly, is the amount of products that you can profitably develop. If you have the skills and the market need exists for more products, then building more is usually a good idea. Also important, however, are risk and the scope and goals of the company. If your product portfolio is too small or too narrow, then you may be exposing yourself to a large amount of risk by putting too many eggs in one basket, so to speak. On the other hand, if you have too many products you may lose focus of your scope and your goals, or simply lose the ability to effectively maintain or all of your product lines.

Should product X be in our product portfolio?

Again, if you have the skills to build a given product and the market need exists for it, then it is usually a good idea to build it. Before diving in head first, however, be sure you know the opportunities and threats of doing so. Also, if a given product is sufficiently outside the rest of your product portfolio, then other problems may arise. Your customers not view you as having a competency in that area and this can hurt customer confidence in that particular product or product line, adversely affecting sales. Furthermore, a disparate product from others in your portfolio may incur large marketing cots, as the effective economies of scale achieved by co-marketing (effectively marketing for many products at once) may not exist. For older products, you periodically need to ask if the product is still worth supporting. This should not be a simple question of if the product is obsolete, however, but rather will the profits from making or selling the product meet the desired rate of return. Ultimately, strategy and rate of return are the most important deciding factors in deciding if a product should be developed, maintained, or scrapped.

How do I know my product portfolio has the right mix of products?

Your developed product portfolio should accurately reflect your core competencies and the current needs of the life science research market while your product development projects should be addressing anticipated future needs. Make good use of market research to figure out exactly what those needs are with respect to your business.

Notes for life science distribution companies

If you’re a life science distribution company your job of product portfolio management is in many ways much simpler since you have no product development costs. However, there are still costs associated with bringing on a new product or product line, so having as large an offering as possible is often not a good strategy. Also, consider your strategic positioning within the life science marketplace and align your product offerings to that positioning. If your strategy involves certain segments of the life science market, leverage your product portfolio to gain a reputation as an expert “go-to” seller within that market segment. Since you have less variables to deal with than manufacturers, fully-quantitative, even automated, processes for dealing with portfolio management processes are also sometimes possible.

Effectively managing your product portfolio will not only ensure that your business is profitable in the short- and mid-term, but by aligning with strategies and goals can help lead your bioscience company to long-term success.

"Are you concerned that your product portfolio is too large or too small? Want to leverage your product portfolio to mitigate risk while simultaneously increasing revenues? Would you like to know what your product portfolio should look like in the future so you can make more informed decisions regarding product development projects? BioBM’s seasoned business consultants can analyze your product portfolio and help guide your bio-tools or life science services business to a more successful future. Give us a call or send us an e-mail and we’ll discuss your goals and how you can develop and leverage a winning product portfolio to achieve them."

Lowering Barriers

Carlton Hoyt 6:28 pm , March 30, 2011

Life scientists are busy people. Between bench work, meetings, writing, presentations, seminars, and everything else they may have to do in their day, their time is limited. As such, they appreciate (knowingly or not) situations where the purchasing of products that they need is easy, fast, and simple. While the ease of the purchasing process is usually not so important as to change the mind of someone who has decided on purchasing a given piece of lab equipment, antibody, reagent, or other bioscience product, it can easily sway the undecided buyer one way or the other. By identifying and lowering or removing the barriers to purchasing your laboratory products or services, you can sway those undecided minds in your life science company’s favor.

This is a bit of an oversimplification, but for brevity’s sake we can break down the sales process, from the eyes of the customer, into three steps:

Finding your product / service
Obtaining the desired information
Acting on the desire to purchase

The first step is arguably the most important. It should go without saying that unless scientists can find your product, they are not going to buy it. Getting found is a multi-faceted issue that has no single solution, but rather many different potential solutions that can be used in combination based on your company’s situation. Having distributors list your products in catalogs, traditional marketing campaigns via print advertising in scientific journals, banner advertising on relevant websites, e-mail campaigns, search engine marketing, social media marketing, search engine optimization, word of mouth marketing, and utilizing in-house sales teams are all options with different benefits and drawbacks and a unique mix of any of these may be appropriate for your company and product (note that this list is not meant to be exhaustive). Identify how you can maximize your exposure in a cost-effective manner and implement those solutions so your life science products are easily found.

No matter how a customer finds your product or service, you always need to make sure you provide them with the desired information to get them interested in buying. As a general rule, more information is better so long as it is well-organized, relevant, and positive. Use this information to keep them engaged the entire time they browse it. Any time a researcher wants more information about your product but doesn’t find it is an opportunity for them to walk away or look for different products, so even if in formats not well suited to containing large amounts of information, the location of additional information should be given and this information should be as easily accessed as possible. A key component to this, since it will almost inevitably contain the most information about your products or services, is having a website with all the necessary product information laid out in an easily navigable way. (you can learn more about streamlining your website for additional sales here)

Lastly, the ability to act on the desire to purchase should be a fast, simple, and easy process (or at least as much is plausible given the nature of the product or service). For example, if your product does not require a quote-driven sales process, e-commerce allows your customers to order quickly and easily. Online forms for quote requests or demonstration requests are similarly low barriers to action. Where possible, free samples are a great way to get your products in front of the customer. If the customer needs to contact your company, let them do it in the manner that they prefer to, be it e-mail, phone, a simple contact form, etc. to ensure that they are comfortable establishing the necessary communication to further the sales process.

Scientists, lab managers, purchasers, and procurement agents all prefer simple and streamlined sales processes, and reducing the barriers to purchasing your bioscience product can be an easy way to increase your conversion. While the ease of the purchasing process is most often not important enough to the customer to change a purchasing decision altogether, it can easily sway the undecided buyer one way or the other. By streamlining your sales process, you can tilt those undecided buyers in your favor and increase your life science sales.

"Would you like to make it easier for life scientists across pharma, biotech, and academia to buy your products and / or services? Want to use a streamlined sales process to tilt undecided buyers towards purchasing your products? BioBM Consulting’s marketing and internet consultants can help you streamline your marketing and sales process. Talk to us and we’ll help you boost your conversion by identifying and lowering barriers to purchase."

Creating Brand Champions

Carlton Hoyt 4:50 pm , March 17, 2011

Branding is an important part of marketing in the life sciences, as we’ve previously discussed in this blog. The ability to shape and manage the perceptions of your company in the minds of customers is a powerful thing. Simply having strong branding will certainly help your company in a multitude of ways, but you can do even more and leverage your brand to derive even more value from it. One such way is the cultivation of brand champions.

What is a brand champion?

A brand champion is someone who feel strongly about your brand, understands its message, and promotes it to others. You could say that brand champions are the “stewards” of your brand. While brand champions can be any stakeholder, we’re going to focus on customers as brand champions. Having customers as brand champions is of particular value.

How to Cultivate Brand Champions

Every brand champion starts as an enthusiast. Find customers who like your products and / or brand and have given you good feedback or maybe who your support or sales staff have a good relationship with. Pick customers who can identify with and support your brand values and goals. Once these customers are identified, define and execute strategies that improve engagement with those customers on a personal level. Give them that little bit of special treatment. Once your enthusiasts are engaged, be sure you have communicated the brand values to them. While there are many strategies to perform any one of these steps, so long as they are performed you’ll start creating brand champions out of your customer enthusiasts.

Leveraging Brand Champions

Once you’ve cultivated your brand champions you can leverage the value that you have created in doing so. One common way to extract value from your brand champions is by encouraging word-of-mouth marketing. Word-of-mouth marketing is both free and highly effective – your marketing message will be much more readily accepted by scientists when it comes from a colleague. (Curious how you can encourage word-of-mouth marketing among your customers or brand champions? Ask us.)

Brand champions are also great beta-testers. Have a product you’d like user feedback on before a full release? Ask your brand champions if they’d be interested in trying it out. Brand champions can be trusted to provide quality feedback and not be overly negative to colleagues about any flaws or unfinished aspects of your new product.

Testimonials and referrals are also great ways to derive value from brand champions. Scientists are more accepting of other products when they hear positive things from other researchers / customers regarding the quality of the product, the services of the company, etc, and brand champions will much more readily be the customers that flout your benefits to others.

Brand champions will also help you crowdsource. When you need the opinions of your customers, your enthusiastic brand champions will be right there to help you and provide the feedback or perspective you need.

There are more ways to leverage brand champions as well. No matter how you do so, be sure that your brand champions feel good about the interaction with your company and brand. If they begin to feel like they are simply being used or taken advantage of they’ll turn their cheek to your brand and you’ll lose a loyal champion. Don’t let that happen. Be sure your brand champions feel properly rewarded.

Cultivating customers into brand champions requires effort but is highly rewarding. Brand champions can be a strategic advantage to your business and provide unique value to your company that cannot be derived in other ways.

"Looking to build a lasting reputation with life scientists? Want to turn enthusiastic customers into couriers of your brand? Do you rely in part on word-of-mouth and want to get more out of it? Would you to reap the benefits of a loyal group of customers to help provide feedback, ideas, referrals, and more? The expert marketing consultants at BioBM are here to help you design and execute strategies to cultivate, leverage, and maintain brand champions. Contact us and we’ll put you on the right track to establishing ultra high-value customer relationships today."

Blog / Branding 4:50 pm , March 17, 2011

Fix the Cause, Not the Effect

Carlton Hoyt 5:19 pm , March 10, 2011

To ensure long-term success of your life science company fix the causes of problems, don't just treat the symptoms. In business, problems are an inevitability. No company ever sails completely smoothly to success. In the life sciences and elsewhere, companies often fail to step back to understand their own problems and their own situation as well as they should. Because of this, people often develop an overly simplistic view of their company’s problems and then implement solutions that are designed to merely treat the symptoms of a deeper underlying problem. Without recognizing and fixing the root cause of your company’s problems, the symptoms are certain to manifest again.

Let’s take an example. Life science company X is having a problem with half its sales force missing sales targets. On the surface, this very well may look like a problem with sales personnel. After all, if the half of the sales force is meeting expectations, why can’t the rest? The company may be keen to implement a solution which directly targets the manifestation of the problem – perhaps reprimanding the under-performing personnel or increasing incentives for those who meet performance. Would these solutions treat the problem? They very well may, especially if the cause was with sales personnel motivation, but if not these fixes will be an inefficient solution that will fail to alleviate the symptom or address the underlying problem. The problem may be in marketing and the sales force is simply not able to compensate for poor quality marketing or a lack of sufficient marketing. The problem may be in quality and the customer is just not receptive of the product as a result. Alternatively, perhaps the problem lies in the sales force’s training or a lack of technical sales support. Perhaps there are multiple causes. For the purposes of this example it doesn’t actually matter what the problem is, but you can see how one problem could have a wide variety of underlying causes.

So what can you do about this?

Before you can “do” anything, you need to ensure that you fully understand your company’s operations. What processes feed into other processes, and which have a secondary effect on others? How do these processes fit into the tasks, strategies, and goals of your company? (Answering these questions alone can reveal problems, many of which you may not have even been trying to find.) What feeds into the problem area? Once you know the answer to those questions, you can go about analyzing where the problem is originating.

Finding the cause of a problem is not a simple process, but you have one key ally in your search: information. Gather information from as many relevant sources as possible. This often involves getting input from your employees, and it may also involve gathering feedback from your customers. It could be quantitative data from business metrics. Whatever the appropriate sources, just remember that information is your friends. Different perspectives are also helpful, as they may have different views on the cause of the problem.

Any hunt for the cause of a problem should be scaled to the severity of the problem – a minor problem isn’t worth a major effort – but regardless the above guidelines can help you identify the problems in your company. Solutions that fix the cause of problems instead of treating the effects are longer lasting, more efficient, and critical to ensuring the long-term success of your company.

"Is your company facing challenges that you simply find perplexing? Are you implementing solutions to problems that just don’t seem to work? Don’t hit the panic button just yet. BioBM’s knowledgeable business consultants can help your company identify trouble areas and develop solutions that address the real problems. Don’t let unknowns be a drag on your business. Contact BioBM and we’ll help you get past your problems and resume a course to success."

Blog 5:19 pm , March 10, 2011

Driving Innovation

Carlton Hoyt 5:54 pm , March 7, 2011

Innovation is key to success is biotechnology and the life sciences. What was once “out-of-the-box” is no longer out of the box. As time goes on and progress is made, your company must continuously progress in order to remain competitive. In essence, those companies that can enact positive change faster than the rest will, over time, become more successful, and a key component of positive change is innovation. Knowing how to change and fostering innovation are complex and abstract challenges, and many biotechnology companies have difficulty dealing with them. The challenge of driving innovation, which I will discuss in this post, can be tackled with some creative thinking and by fostering a suitable environment.

Before I get into the “how”, I’d like to offer another important piece of advice. Innovation in many companies is something that is performed reactively. Most companies, especially those beyond the start-up phase, innovate in response to a pressing business need. Innovating in this manner will allow your company to adapt, but rarely will it allow you to excel. In order to start being a leader in your field, you need to innovate proactively. Make it a point to account for innovation in your company’s goals and strategy to help ensure innovation stays proactive.

Innovation more frequently occurs at interfaces where different ideas and perspectives come together, so encourage that within your company. Do your engineers and scientists not frequently talk? Make sure they have an opportunity to get together and talk about product development and your current products and technologies. Mix in personnel from marketing, sales, and support as well since these are the people who communicate most with customers and will be most in tune to their needs. It isn’t enough to just have them generate ideas, however – there needs to be an avenue for these ideas to be vetted and potentially obtain buy-in from the appropriate people in management. Make sure that avenue exists and is communicated to your employees so you can allow innovation to come from all areas within your company. It is also worth noting that a Gallup study found that the most engaged employees are the most likely to be driving innovation, so if you are thinking of creating focus groups or using other inclusive techniques to foster innovation, you may want to select the most engaged employees.

Innovation can come from outside your company as well. Another great benefit to having broad connections with customers (which can be fostered via customer relationship management, social media marketing, directly, etc.) is leveraging them for ideas on how to improve your products. While your customers will be unlikely to drop the next great technological breakthrough in your lap, they are often very happy to tell you what they need. If you have a particular problem that you need solved, you can use “challenges” with high-value prizes to get ideas. Such challenges themselves, however, require a solid marketing effort to ensure that they are well received and that your company gets a good enough response to make it likely that at least one submission will meet your needs. Alternatively, you can leverage existing platforms that post innovation challenges such as Nature and InnoCentive’s Open Innovation Pavilion.

All companies must change and innovate to grow and stay competitive, and the ability to successfully innovate is of immense value to life science corporations. While harnessing the power of something as abstract as innovation can be difficult, building goals, strategies and tasks with innovation in mind can being the process more within reach and under control. Once your company starts reliably driving innovation, you can proactively change to become a leader in your field.

"Is your company suffering from a lack of creativity? Need to kick-start innovation at your company to move forward product development or address difficult business or marketing issues? Every consultant at BioBM is an expert innovator (literally – at the time of writing every consultant at BioBM has conceptualized / developed a new product), and our Business team can help you build innovation into your company. Call or e-mail us to discuss how we can help your company drive innovation and become a leader in your field."

Blog 5:54 pm , March 7, 2011