Focus on “Why”
Carlton Hoyt
While a large part of a company’s brand is controlled by what a company does, this is not a compelling corporate image to project. It would be far more beneficial to life science brands to focus on why they do it, as “why” is simply an inherently more compelling proposition than “what”.
As an example, I’ve taken the first self-defining statement from five life science tools companies’ about pages and anonymized them. This is what I came up with:
- “[Company] develops and manufactures innovative scientific instruments and systems that exploit digital imaging technology for a range of disciplines.”
- “We believe in the power of science and appreciate its rigorous discipline. Thatâs what drives our passion for innovation, leading to transformative offerings that support endeavors throughout the world.”
- “[Company] develops, manufactures, and markets a wide range of laboratory instruments, apparatus, and consumables used for research in functional genomics, proteomics, and food safety.”
- “As a global technology leader, [Company] is taking action to harness the power of insights and transform them into knowledge to deliver innovative, differentiated solutions for our customers.”
- “Established in [date] as a cooperative laboratory of experienced scientists, [Company] is a world leader in the production and supply of reagents for the life science industry.”
Of those five, three (1, 3, and 5) are extremely straightforward definitions of what the company does, one (4) is a description of how a company does what they do, and only one (2) is a description of why they do what they do. Did you notice any particular one being more compelling that the others?
Your reason for existing can actually be a very compelling driver for both new customer acquisition as well as customer loyalty. Not only can it improve your current business, but also enable you to more easily enter new marketplaces. Furthermore, integrating this reason for existence into your company can motivate your employees and make you more productive and successful. I don’t mean to make it sound like a magic bullet, but your company’s reason for existing can and should be a powerful driver for both internal and external stakeholders.
There’s a great TED talk on the subject:
Reduce the Risk in Buying
Carlton Hoyt
Life science marketers often hold many simultaneous viewpoints on why customers purchase products. Frequently, the attributed reasons include a hodgepodge of quality, price, ease of use, suitability for their application, adoption by others, various performance metrics and many other reasons that may be general or product-specific. All that gets a bit confusing, and is a bit over-defined if you ask me. I prefer to start from one attribute and then elucidate from there: life scientists make purchasing decisions based on risk.
Considering the scientist as a purchasing decision-maker, risk has two main components: financial and utility. Financial risk can be represented as price, although a more accurate representation is total cost of ownership (TCOO). If a product is very expensive, that makes the purchase more risky since there will be less resources to devote to other important endeavors and also since there are more sunk costs if the product doesn’t perform to the customer’s expectations. Utility risk pertains to the product ability to perform the functions that it is expected to by the customer. In other words, from a customer-centric standpoint: “In my particular application(s), how likely is this product to meet my expectations?”
The risk-based view can answer a question that leaves a lot of companies scratching their heads: why free samples are used so infrequently. It’s common for life science consumables companies, especially smaller companies, to give out free samples when a product is first launched in order to get people to try it. Most often, unless the brand is highly trusted, free samples fail their purpose and are left unused on the shelf. This is because giving away the product only serves to reduce one of the two main components of risk: financial risk. It does nothing to mitigate utility risk.
What life science tools and services companies should aim to do is reduce overall risk by lowering utility risk as much as possible such that financial risk does not need to be reduced and they therefore do not need to discount their product (or perhaps can raise the price on their product!) This gets to the heart of conveying value to the customer – that value should, as much as possible, be something that is experienced rather than something that is simply told. This becomes clear if you ask yourself: “What can we do to minimize utility risk?” Simply claiming that your product works would be pretty far down the list.
If you’re still not convinced, go out and ask a few scientists which of the following they would be more likely to purchase: 1) a product that claims to have better performance but you are unsure if it will work for you, or 2) a product that has lesser performance but you are certain it will work.
Performance metrics are undeniably important, and scientists have different reasons for purchasing different products. At the end of the day, the product with the lowest risk will be able to capture a greater market share than its competition.
Simplify Your Message
Carlton Hoyt
Last week, I discussed the importance of positioning statements in crafting and delivering marketing messages. Today I’ll discuss a similar topic: making your life science marketing more effective by keeping your marketing messages simple. First, let me explain what I mean by “simple”.
Having a simple marketing message does not necessarily mean that it should be short, that it should contain only a small amount of information, or that you should stay away from technical information, data, or other things that may by some definitions seem “complex”. Instead, a simple marketing message is one that focuses on the customers needs, your products core claims to value, and little else. It is a message that isn’t diluted with a long list of relatively unimportant attributes that detract from your core message.
It may not be immediately clear how this is related to the positioning statement. The positioning statement should be rooted the customer need that your product or service is solving as well as how yours is differentiated from other offerings. It is concise and to the point. If this is the starting point for all of your marketing messages, then you will be starting with a message that is highly targeted and focused on the key value proposition. From that point, all you have to do is resist diluting your message.
This isn’t to say that you should only ever focus on one single value proposition. Indeed, different attributes may have different perceived value to different customers and there also may be two or more value propositions that are almost equally important to a large segment of your audience. However, the focus of the message should be on the most important value propositions and put the others on the back burner. To do this, life science marketers need to have a very clear understanding of how their product or service creates value. Without such an understanding, there will be the temptation to propose value in as many ways possible, which in turn dilutes the value propositions that create the most value.
Life science tools and services create value for their customers in a wide variety of ways. Chances are, however, that a select few of those value drivers are by far the most important to your customers. By focusing marketing messages on those key value-creating attributes. life science marketers can more effectively generate demand for their products. Using a positioning statement as the basis for your marketing messages helps to achieve this.
Positioning Statements
Carlton Hoyt
Over the 2+ years that BioBM has now been in business, we’ve had the pleasure of working with a wonderful diversity of life science tools companies and contract research organizations. One thing that we’ve been consistently surprised about is how many small life science companies lack positioning statements for their product lines and services. Positioning statements should be central parts of any marketing strategy. Even for the more pragmatic life science marketers who may eschew strategies for every product line, positioning statements should still be central to their marketing. They not only help form the basis of marketing messages, but ensure consistency in the message. Without them, marketing messages often degrade into uncompelling feature / benefit statements.
Such that life science marketers can more effectively create positioning statements, we’re going to give a quick lesson and offer some tips to help make the statement more powerful and help marketers avoid common pitfalls.
How a Position is Stated:
I’ll use a close approximation of Geoffrey Moore’s version from his book Crossing the Chasm (a great read, by the way): For [target customer] who [statement of need], the [product name] is a [product offering] that [statement of key benefit]. Unlike [primary competitive alternative], our product [statement of primary differentiation]. As you notice, there are a number of “variables” in this.
The target customer should be defined specifically. Keep in mind the target customer is NOT a market. “The pharmaceutical industry” or “environmental labs” are not customers. People are your customers. People make purchasing decisions, and you should state what people you need to speak to. There should be at least one noun that represents people (for example: “scientists,” “lab managers,” “analytical chemists,” etc.)
The statement of need cuts through your target customer to get to your customer segment. Of your target customers, what need will identify which will see value in your product? Ensure that you’re realistic. No matter what the situation, you will never achieve 100% market share so don’t pretend that you will. If you define the need too broadly, your targeting will be weak, leading to your messages not reaching the right people (and not being as effective when they do) and therefore decreasing the efficiency of your marketing communications.
The product offering should be a factual description of your product. There’s no place for terms like “revolutionary” or “breakthrough” in your product description. If you have fluff here, you’ll end up with fluff in your marketing messages, so be honest, be specific, and avoid exaggeration and hyperbole.
The statement of key benefit addresses how your product meets the aforementioned need of your customers. This statement should be specific and factual. Descriptors like “best” “reliable” or “high quality” should not be used. Also, benefits and specifications are not always interchangeable. If you use a specification or feature in your statement of key benefit, be sure to ask yourself if the benefit that feature / spec conveys would be obvious from the perspective of your audience. Furthermore, the focus should be on the single most valuable benefit; this is not a laundry list. Choosing one benefit is often not simple, but you either need to make the tough decision or reconcile multiple benefits in order to present them as one unified benefit. Lastly, note that the key benefit does not have to be your primary differentiator. That comes later.
The primary competitive alternative is not necessarily another product or service (although it often is). You want to address how most of your audience with your stated need are currently fulfilling it.
The statement of primary differentiation should summarize how your product or service provides value in ways that no other competitor can claim. It may be related to your statement of key benefit, but does not have to be. Remember: the key benefit is what provides the greatest value to the customer. The primary differentiators are what distinguishes you from other competitors. (Side note: the best differentiator should be determined by market analysis.)
A strong positioning statement is something that life science marketers can and should refer to in order to develop messages that are consistent and on target. To keep your marketing focused and ensure you target the most opportune audiences, have a positioning statement for all your product lines and service categories.
RSS Feeds & Publicity
Carlton Hoyt
Let’s face it: all companies love free publicity. However, many life science tools companies, especially small companies, don’t take full advantage of industry press. It’s certainly not for lack of news. Life science tools companies are constantly developing new products, expanding distribution networks, collaborating with academia, getting grants, and doing lots of other potentially newsworthy activities. They simply do not do a great job of disseminating their news. One very helpful step in getting your company news picked up is setting up a meaningful RSS feed.
Simply publishing your company news on your website is not sufficient to ensure it gets distributed. It is not realistic to assume that relevant members of industry media will routinely check your website for updates. Even if you are publishing your press releases through major PR outlets, such as PR Newswire, your releases may not be easily found by more focused industry press. In contrast, an RSS feed allows your news to easily be delivered to industry news media.
Simply having an RSS feed isn’t enough, though. You need to treat journalists as if they will be customers of your news content. After all, they will have many different sources of news competing for their attention. You therefore need to ensure that your feed is of high value to them. Your feed needs to be interesting and relevant. As a litmus test for any particular piece of news, try to think from the perspective of a general member of your industry and / or target market. Landed a big customer recently? It might be important to your company and maybe your investors, but the industry in general probably doesn’t care much. There are many other such examples.
Everybody loves free press, and for good reason. Spreading the accomplishments of your company can build your reputation and brand. It can raise awareness within your target markets. It can help attract investment. It can even have a very positive effect on SEO. To ensure that your company gets the most free publicity possible, ensure that you have a company news feed that is relevant, interesting, and easily disseminated to members of industry news media via RSS.
Product-Unrelated Value
Carlton Hoyt
At BioBM, we often advocate that companies find ways to create what we call “product-unrelated value” (we first discussed it publicly in a blog post last month). Note that when we say product-unrelated, we don’t mean “has nothing to do with your product” but rather “is not intrinsically linked to your product”. Product-unrelated value should still be something that is relevant to your products, services, or market, but the delivery of value to the customer, as well as the realization of value by the customer, should be completely independent of purchase or use of your products. Product-unrelated value can build trust and strengthen your brand without requiring the user to have participated in the purchasing cycle. Still, many companies scoff at the notion of spending resources to develop value that isn’t intrinsically linked to a product.
It’s good to know that some of the top thinkers agree with our philosophy, though.
Bill Lee, the president of the Customer Reference Forum, Executive Director of the Summit on Customer Engagement, and frequent contributor to the HBR blog network, recently wrote: “It’s always a good idea to look for new ways to create value for customers. But focusing only on doing so through your product or service is entirely one-dimensional. The hard reality is that your product or service, however great it is â however much it helps your customers get a job done or provide an enjoyable experience â is likely just not that important to their lives in the grand scheme of things.”
Companies exist because they are able to provide value to their customers. Companies that cannot do so cease to exist. Life science tools companies, and indeed companies across all industries and sectors, need to realize that they need to focus on creating value for customers in more ways than just through their products. Those that argue that product-unrelated value doesn’t help their bottom line are being shortsighted. Product-unrelated value builds the critical trust and brand value that allows a company and a brand to succeed in the long-term. This is especially true with a highly skeptical audience such as scientists.
User Testing & Conversion
Carlton Hoyt
I did a small study earlier this week to compare prices across six major US life science distributors (you can read about it here). Because of that, I had occasion to go through those companies’ websites and look for products. All of these companies are, by industry standards, fairly large companies, and all of them sell online. For some of them, online sales is a very significant portion of their revenues. I would bet that for most it’s their fastest growing sales channel. Yet most had glaring problems in their website. One had search results that blinded the user with bright yellow highlighted terms all over the page. Another had a high percentage of products that were not identified by their model number. Yet another had an annoyingly persistent “featured product” box that showed up front and center in the search results but never had anything in it. There was a search that seemingly only used “OR” logic for every word in the term – the more terms you added, the less relevant the results became.
These are glaring errors that hurt user experience, and they could be easily identified if these companies did user testing. This is an important point, as anything that takes away from the experience of using your website decreases your competitiveness by driving users away from your website (and likely to your competitors websites).
For those who may not be familiar with it, user testing involves someone who is within your target demographic and recording their interaction with their website. You usually give them a generic task to perform on your site and they speak their thoughts as they perform the task. The output comprises a series of screencasts with voice recordings which are then analyzed to find problems with the user experience or more generally find things that users like and don’t like (there are other techniques and tools that can enhance the output as well).
User testing is very common in many markets, but seems to be relatively uncommon in the life sciences. That may, in no small part, be due to the inherent difficulty in getting a group of scientists to sit down and do a user test, but we find that to be more of an excuse than a reason. User testing may simply not be in the culture of life science marketing, contrasted to it being fairly prevalent in B2C markets. Whatever the reason that it isn’t used, there is no good reason that it shouldn’t be used.
Anything that adversely affects user experience will have a negative impact on the purpose of the website – be it lead generation, sales, or simply progressing users through the purchasing funnel. User testing, especially in conjunction with website analytics, can be a powerful tool to improve user experience and the overall performance of your life science company’s website.
Amazon Supply’s Positioning
Carlton Hoyt
Amazon Supply has been making some waves in the laboratory products market since they got into what they refer to as “Lab & Scientific Products”. A lot of manufacturers have asked us what we think about their entry into the market and we have generally responded anecdotally that it’s most likely an extension of their current business model: Sell a huge variety of products, inexpensively, with easy ordering and fast shipping. The assumption is that Amazon, with all its efficiencies, would be able to offer lower prices than could its competitors. We said that enough that we started to wonder if it’s actually true.
To settle this once and for all, we did a little mini-study. We compared the stated online cost of 10 products sold by Amazon Supply vs. 5 of the major US distributors: Fisher, VWR, Daigger, Cole-Parmer and Thomas Scientific. We only considered products where the exact same product from the same brand was offered by Amazon Supply and at least four of the other companies. Included was plasticware (3 products), glassware (1 product) and equipment (6 products). Reagents were not included because Amazon Supply is weak in that area and carries mostly commoditized chemicals and buffers which are difficult to brand match across 6 companies. We admit, there is no good way of selecting products in a manner that is both random and practical, so we simply searched for popular items from common brands that we believed most large, general-purpose life science distributors would carry. It actually worked quite well.
A few notes before we get to the findings… The costs analyzed are the US costs. Prices in other countries will vary, and of course every country will have its own unique distributors. If you’re outside North America, you may very well only know 2 of the distributors we used as a comparison. We also tried to remove any influence caused by differences in pricing given to each distributor by specific manufacturers by having as little overlap in manufacturers as possible. In fact, the only manufacturer of more than one product used in our mini-study was Corning, who manufactures two of the products sampled.
We took all the prices for all 10 products, normalized the prices for each product, then took the average of the normalized prices for each distributor. This gave us one number – if our study is accurate (which it very well may not be since the sample size is quite small) this number will represent how much more or less expensive any given distributor is. A value of 1.050 would indicate the distributor is 5% more expensive than the average of these 6 distributors. Likewise, a value of 0.900 would indicate a distributor is 10% cheaper.
So, these are the averages of the normalized prices for our basket of 10 products:
- Amazon Supply: 0.896
- Fisher Scientific: 1.052
- VWR: 1.035
- Daigger: 1.077
- Cole-Parmer: 1.003
- Thomas Scientific: 0.950
Turns out that we very well may be correct – Amazon does seem to be competing on price. Their prices for these 10 products were, on average, over 10% lower than the average competitor. (For all you statistics nerds, the 2-tailed, 2-sample unequal variance t-test score on the difference in Amazon Supply’s prices was 0.033.) What was at least equally as interesting to us is that for every product – 10 out of 10 – Amazon Supply’s prices were lower than the average. In our sample population, the closest they got was a normalized price of 0.984 on an IKA orbital shaker. They also advertise free 2-day shipping on orders of $50 or more, which is just about everything, so taking that into consideration Amazon would be even more price competitive.
Something else that I found noteworthy was that there were only two companies that carried all 10 products (aside from Amazon Supply, which did by definition due to our study design) – VWR and Thomas Scientific. Fisher and Daigger each carried 9 of 10, Cole-Parmer carried 7 of 10. Again, this could very easily be an anomaly due to the limited sample size, and we didn’t bother to do any statistics, but I thought it was interesting nonetheless. If two makes a coincidence and three is a pattern, ten might even be called data, albeit not a whole lot of it.
We figured some people might be interested in the data, so we put it online here. It’s in excel format so you can play with it if you’d like. If you get motivated and add to it or do additional analysis, let us know! E-mail me at carlton.hoyt@[you know the rest].
Ads are Not Enough
Carlton Hoyt
Many of you reading this may be familiar with BioBM, but for those who are not: the best one or two phrase description of what we do would be “marketing for small life science tools companies“. That being the case, we run into a lot of problems that are more common to smaller companies or start ups. For example, one of the more common issues that we run into is an improper marketing focus. A product is developed, and the manufacturer rushes to pull the advertising trigger before sitting down and thinking about the message or the audience. They focus on the channel rather than content and on their product rather than the users. They confuse an advertising plan for a marketing strategy.
When a product launch is on the horizon, the first question that needs to be asked with regards to marketing is “How?” The answer cannot be some combination of in journal X, website Y, search engine Z, and by emailing a bunch of people who really don’t want you to email them. That’s not “how”, that’s “where”. More specifically, the question that needs to be asked is: “How will we be able to persuade scientists that our product provides a superior value than alternatives?” That is the most basic question that marketing needs to ask. From that perspective, the answer “by advertising in journal X” seems both insufficient and a bit silly.
An advertising plan is not a marketing strategy. Before any life science tools company thinks about channels, it needs to address that most fundamental marketing question and, with consideration of the product or service, its competition, the behavior of the target market, and many other factors, consider the messages and content that will need to be delivered. (Side note: the positioning should have been determined long before this point.) Only then can the company start to think about how their marketing content should me delivered and how to draw people to it.
Know What You Outsource
Carlton Hoyt
Something that we do here at BioBM is help clients strategically outsource; to improve and expand their capabilities and / or to help reduce costs. We’re not politicians and outsourcing isn’t a dirty word here. Our clients, small life science tools companies, can’t be expected to have all the capabilities that they might need in-house. Outsourcing is a way to fill that need.
Low-cost outsourcing is an attractive prospect in many cases. You can often source a service for a small fraction of the cost to do it in-house or use a higher-cost, more reputable agency. However, in order for low-cost outsourcing to be successful, you need to have an understanding of what you’re outsourcing.
We sometimes have companies come to us after they have attempted to outsource a project or function to a low-cost provider. For the sake of illustrating the point, we’ll use one of the more common examples: website design and development. Companies looking to save a few thousand dollars often look to companies in low-income areas that offer to build websites for as little as a few hundred USD. While there are certainly times where such companies get lucky, often it ends up being a waste of time and money. Why is that?
Quite simply, these companies did not have a good enough understanding of web design and development to effectively outsource it to a low-cost provider. They may not understand the technical aspects of the projects, the nature of the work involved, or even how to properly define their needs and requirements. This leads to poor communication, poorly defined scopes, and ultimately a poor deliverable. If they had a better understanding of website design and development, they would be more able to effectively manage their contractor and would be unlikely to encounter such problems.
(Just for the record, we do not outsource web design / development. We do outsource some lower-level but time consuming tasks in order to keep down our own costs and therefore the costs to our clients. We can be successful in doing so we not only understand outsourcing, but have a keen understanding of the projects that we outsource.)
If you have a good understanding of the task that you need performed, you can probably make use of low-cost outsourcing. However, if the work contains a degree of ambiguity to you, it is probably best that you choose a reputable, well-established service provider who will work closely with you to fulfill your needs.