Adapt to Your Customers
Carlton Hoyt
It’s no secret that traditional approaches to life science marketing are becoming less effective. Customer behavior is changing, and returns on advertising dollars are being hit hard. A recent Harvard Business Review article reaffirmed this point, stating:
[…] buyers are no longer paying much attention. Several studies have confirmed that in the “buyer’s decision journey,” traditional marketing communications just aren’t relevant. Buyers are checking out product and service information in their own way, often through the Internet, and often from sources outside the firm such as word-of-mouth or customer reviews.
The days of trying to tell your customers what to buy and why they should buy it are long gone. Replacing that paradigm must be one that respects the scientists’ freedom in their quest for information. Life science marketers must position themselves within the customers buying paths, not try to dictate the paths themselves. We must let the scientists make their own purchasing decisions and act as a courier rather than a candidate. However, in order to be an effective courier, your brand must be trusted by the customers.
How does a brand go about building trust? By providing value. For the purposes of this discussion we can segregate value into two categories: product-related value and product-unrelated value. Note that by related we don’t mean “having anything to do with” but rather “intrinsically linked to”. In this sense, product related value is something that by definition requires affiliation with the product. Examples could include technical or customer support, benefits realized by use of the product itself, or any communication of those benefits. Product-unrelated value is anything that can be completely removed from the context of your product while having its value to the scientist undiminished.
Product related value is somewhat of a catch-22. Unless a scientist has used your product or heard good things through word of mouth, there’s not much you as a marketer can do to build solid product-related value prior to a customer’s interaction with your company (and it’s difficult to get a customer to interact with your company prior to the building value for them). That leaves product-unrelated value.
How can we, as marketers of life science tools, provide value to scientists outside of manufacturing and delivering valuable life science tools? The answer is simple (even if the execution isn’t): look outside your core business. You may be a manufacturer or a service provider, but you need to find ways to deliver unique value that don’t intrinsically depend on your product or service. The most common way of doing so is by providing information and expertise (either novel or curated).
One of my favorite examples of delivering product-unrelated value is, ironically, within a product catalog. However, I’ve found it to be one of the most common product catalogs in life science laboratories specifically because of the product-unrelated value within it. It is the New England Biolabs “Catalog & Technical Reference”. Many molecular biologists keep this catalog – a CATALOG! – close at hand because of its very useful technical reference section with, as they put it, “up-to-date technical charts, protocols and troubleshooting tips to aid experimental design.” That technical reference acts as the courier and delivers their products alongside it. It makes the molecular biologists decision simple: New England Biolabs knows their stuff – after all, look at all these useful protocols and troubleshooting guides – so it’s reasonable to presume that they make quality products.
The combination of a leadership brand position and a courier / decision simplicity marketing style, along with quality products to back it up, is an incredibly powerful combination. The creation of such a combination by life science marketers will allow them to capture market share and, ultimately, dominate their segment.
Forget the Sunk Costs
Carlton Hoyt
Companies resist change for many reasons: corporate culture, inter-departmental differences, vested interests, and many more. Yet one of the most common resistances to change, be it in marketing, product development, operations, or other areas, is one of the least justifiable: sunk costs. The reasoning that one’s company has already spent so many resources pursuing a particular endeavor is no more than an excuse with flawed reasoning and should be dismissed.
Ignoring sunk costs in decision making is a very broadly understood business principle however is often poorly implemented. This is often due to perception that changing direction would amount to the failure of the department, team or individual who is in charge of the current effort. Understandably, no one wants to be viewed as having failed.
So what can life science tools companies do to help ensure that we actually let sunk costs be bygones? First, we must ensure that all quantitative analyses used in decision making are unbiased and have ROI or other metrics calculated from the present day rather than any time in the past. In other words, we can only consider the costs and opportunities from the present day forward when we determine the opportunity costs of any particular option. That’s the simple part, however.
The more complicated part deals with defining failure. We also need to make clear how we define failure on any particular endeavor, as well as be cautious of how we disincentivize failure, to help ensure we create a culture that is appreciative of change rather than wary of it. An overly competitive corporate culture can contribute to such a resistance to change as well. All individuals and departments must work together to ensure that they progress effectively towards their common goals. This is admittedly a simplification, as such issues have been the focus of entire books, but it is still something that business leaders must be aware of.
When there is resistance to change within an organization, leaders need to determine the reason why such resistance exists in order to determine the validity of the resistance from a business standpoint.
Don’t Focus on the Brand?
Carlton Hoyt
Brian Millar of Sense Worldwide wrote an interesting article for Fast Company Design arguing that talking a lot about branding isn’t actually helping companies. It got a lot of criticism, so he then wrote a follow up. One of the key points was that brand value is imaginary – it’s only in the mind of the consumer, will be unique to every consumer, and will be based on a culmination of all of the actions of a company, so why try to manipulate it? Millar argues that we should not focus on branding and shouldn’t discuss our brands but rather take that effort and give it back to all the other efforts of the company.
In short, I disagree.
We discuss this topic on our Life Science Marketing LinkedIn group.
End of Solution Sales
Carlton Hoyt
In our Marketing of Life Science Tools and Services group on LinkedIn, we recently discussed an article in the Harvard Business Review on “The End of Solution Sales.” While this is an excellent article and I suggest reading it, we’ll focus on one key finding: that “[…] customers completed, on average, nearly 60% of a typical purchasing decision â researching solutions, ranking options, setting requirements, benchmarking pricing, and so on â before even having a conversation with a supplier.” This is just the beginning, but it does highlight something of key importance for marketing that is not discussed in the article.
If 60% of the purchasing decision is concluded before interaction with sales, marketing needs take responsibility (and claim the opportunity) for satisfying customers’ self-driven quests for information.
As the default behavior of B2B consumers is changing to include more self-fulfilled quests for information, life science marketers must make the necessary information to drive their target audience’s purchasing decisions available. The ability to predict the information that will be necessary, as well as the downstream ability to shape content to the audience’s measured behavior, is of increasingly critical importance. Marketing campaigns need to be able to respond dynamically to collected data on prospect behavior if the appropriate content is to be delivered at the appropriate time. A content roadmap becomes an even more critical component of generating demand. These factors collectively drive the importance of performing market research / marketing research, developing a clear marketing strategy, and planning a content-driven campaign.
If B2B purchasing decisions are 60% made by the time a conversation w/ supplier occurs, this places more of a responsibility on life science marketers to shape opinion before that first conversation. More planning is required, however such planning will have an increasingly positive effect on marketing ROI. Furthermore, we can conclude that marketing campaigns driven primarily by awareness-generation efforts will continue to decrease in effectiveness.
Marketing & The Cost of Sales
Carlton Hoyt
Efficient life science sales operations require that opportunities are handed from marketing to sales at the correct point in the buying cycle. When there is a lack of proper marketing support, leads often get handed over to sales too early, creating situations where sales effort is wasted, leading to operational inefficiencies in sales. The symptoms caused by underdeveloped leads are usually three-fold:
- Sales conversion is low because of poor lead quality which is ultimately due to underdeveloped leads. This situation often leads to sales and marketing pointing fingers at each other.
- The sales cycle is prolonged, requiring more overall effort from sales and, therefore, increased costs
- Leads will go cold at a high rate
The opposite effect, where sales effort is insufficient or too much is left to marketing, is also possible. Recent research suggests that it may actually be common and also cause decreased conversion and wasted sales effort. Regardless, the method for diagnosis is similar.
If you are creating a lot of leads but not closing a lot of opportunities then you may be under-nurturing (or over-nurturing) your leads. Compare your marketing contact points to your content roadmap (you may need to design a content roadmap if you do not already have one). A content roadmap based on strategy and market research should provide a complete picture of the information requirements of your target audience. Like a blueprint for a house, the content roadmap will provide a framework for creating leads and, subsequently, nurturing your leads into qualified opportunities. Overlay that framework onto your current marketing campaign and ask: Are you delivering all of the necessary content? Is sales delivering content that marketing should deliver (or vice versa)? At this stage, the difference between what you are doing and what you should be doing should be clear.
Strategy Before Action
Carlton Hoyt
At BioBM, we interact with a lot of start-ups. Most often these start-ups consist of a team of scientists and / or engineers, sometimes with little to no start-up experience on the team. Marketing experience is often lacking entirely. Because of this, we run into the same problem over and over – young, ambitious companies who, knowingly or not, wager their success by putting action before strategy.
Having a great product or service is the #1 factor in a young company’s success. You’ll never catch me saying otherwise. However, a great product alone isn’t sufficient to be successful. By rushing to market without thinking strategically about anything other than product development and prior to having strategy-backed plans in place for marketing, sales / distribution, support, and a multitude of other factors is, plain and simple, a bad idea. You are very unlikely to hit your target if you’re shooting blind, regardless of how big your gun is.
Furthermore, there is often an assumption among scientists that their experience in the field makes them sufficiently knowledgeable about the needs of the marketplace that little to no outside information is necessary. While experience being a member of a market certainly conveys some knowledge about the broader marketplace, and if you were to ask one person to explain a market in great detail it would naturally be someone within that market, it should never be assumed that this knowledge is sufficiently accurate. Start-ups should never rely solely on their own opinions and views for the same reason that you would never want to do a market research study with only a small handful of individuals. Opinions and perceptions vary. Just like anyone else, scientists are perfectly capable of being biased by their own opinions. As the saying goes, the plural of anecdote is not data.
Companies would be far better served by doing their homework. The time and resources required to properly strategize and plan should be incorporated into the estimates of start-up costs (not to mention the costs of initial marketing campaigns, which are again frequently underestimated or overlooked by individuals with little or no functional expertise in marketing) and resourced appropriately. The product(s) may be the heart of your company, but a heart alone doesn’t sustain life. If you want to ensure that you’ll be successful, make sure you have all the other pieces in place before you rush to market.
Distributors: Not for Marketing
Carlton Hoyt
Many life science tools manufacturers, especially smaller companies, have a tendency to push a lot of marketing responsibility on to their distributors. In most such cases, the manufacturer often retains some broad marketing responsibilities which are usually focused on branding or awareness (for example, advertising in scientific journals or websites) and leaves their distributors responsible for most or all aspects of lead generation and nurturing. Allow me to take a very clear stance: this is a massive mistake – one that costs life science tools companies and their distributors incredible amounts of lost potential product demand (and, in turn, revenue).
Your distributors strong point is not marketing your products. It’s selling your products. It doesn’t matter who your distributors are – they are salesmen first and marketers second. There is a very good reason for this.
Creating and distributing individual marketing communications is relatively cheap. Developing a highly effective content-oriented marketing strategy, framing the campaign architecture, then building and deploying such a campaign is a very laborious process that can require a very significant time commitment by highly skilled marketers. A distributor, with maybe dozens or hundreds of product lines, can not realistically be expected to take on that burden. Additionally, distributors’ internal competencies often strongly favor sales to marketing, and many smaller distributors lack sufficient in-house marketing skill to perform deep analyses on products (and, perhaps, markets) that are novel to them. As distribution contracts may be tenuous and temporary, distributors are rightfully hesitant to devote such resources to marketing.
Life science tools manufacturers would be far better served by creating holistic marketing strategies that map out how to take prospective customers through lead generation to the point of sale, defining what will be performed by themselves and what will be handed off to the distributor (if any). If the distributors will be responsible for any aspects of marketing, there should be a high degree of collaboration to ensure that the marketing efforts are synergistic and build a single, coherent campaign rather than a set of discreet, loosely-related components. In other words, it is acceptable for your distributors to execute parts of your marketing campaign, and indeed they may have marketing resources which can help manufacturers generate demand beyond what the manufacturers could generate on their own, but they should not be left to design the campaigns or key marketing messages.
While salesmen are certainly capable of generating leads, marketing is a much more efficient and effective tool for this purpose. Because life science tools manufacturers often leave lead generation to their distributors, who are heavily sales-oriented and almost always have a very limited incentive to invest heavily in marketing for any single product line, a lot of potential demand is never realized and both manufacturers and distributors suffer from sub-par sales.
Creating Balance in Marketing
Carlton Hoyt
Life science marketing requires a degree of balance between two opposing factors: information (content) and simplicity. On one hand, life science marketers want the scientist-customer to be able to access all of the information that they may need or want in order to make a purchasing decision. On the other hand, marketers and salespeople want to efficiently guide the customer to the point of making a purchasing decision, and want to create simplicity such that the customer is efficient in his or her own decision making. These needs are often in opposition: providing more information than any particular scientist wants can complicate the purchasing decision, lengthening the sales cycle and creating “stress points” in the campaign where scientists may lose interest, while oversimplifying their decision-making process may leave scientists without enough information and feeling as if they are being forced into a decision.
So how do we balance these two opposing forces? It is not simple. Any given scientist-customer may have different information demands. A single marketing flow will provide poor results in life science tools sectors where such demands may significantly differ (as is true in most sectors). The key lies in planning and foresight.
Through both internal knowledge and interviews with members of your target market, life science marketers should be able to gather all possible information requirements of a prospective customer, classify this information into “essential” and “non-essential” information, and determine what information may be needed at what point in their purchasing decision. Essential information will form the backbone of the marketing campaign architecture – the content designed to “touch” all prospective customers. Non-essential information should be offered but not placed directly in front of all customers. Consider these factors along with when certain pieces of content will be required or beneficial and draw out a content roadmap. The content roadmap should provide life science marketers with a clear view of the informational requirements and will implicitly guide marketers towards deciding the optimal channels for delivering any particular piece of content.
Through understanding the information requirements of the audience and development of a content roadmap, life science marketers can develop a marketing campaign architecture that balances content and decision simplicity to customize and self-optimize the campaign for each individual prospect.
State of LS Tools Survey Results
Carlton Hoyt
In mid-April, we discussed how despite the presence large amounts of negativity in the life science tools market, things actually appeared to be getting better. To follow that up, we conducted a brief 6-question survey last month to determine if people within the sector felt similarly and try to gauge if companies were preparing for better times or worse times ahead.
The survey was open from May 1st through May 31st. 22 respondents completed the survey. One respondent’s set of responses was removed from the survey due to not responding in the affirmative to the qualifying question which asked respondents if they worked within the life science tools and services market. Based on IP, 14 respondents were from North America, 6 were from Europe, and one was from Asia.
The questions (aside from the qualifying question) and responses are below:
1) Complete the following statement: “Thus far in 2012, my company’s sales have _____.”
2) Complete the following statement: “Compared to the last quarter of 2011, I feel _______ about the life science tools market”
3) Compared to the first half of 2012, how much does your company intend to spend on the following functions in the second half of 2012?
| More | Same | Less | |
|---|---|---|---|
| R&D | 33.3% | 57.1% | 9.5% |
| Marketing | 38.1% | 47.6% | 14.3% |
| Sales | 57.1% | 33.3% | 9.5% |
4) Which of the following is presently true about your company?
Additionally, two respondents left comments at the end of the survey. One noted “The market seems stable at the moment. We are mildly optimistic about the future.” The other stated “There are significant cuts in the research budgets.” The latter statement allows for some confusion as to whether “research budgets” referred to mean the academic research budgets or the budgets for internal R&D, although use of the plural leads us to believe the respondent most likely meant academic research budgets.
We find these results very interesting. While year-to-date performance in the respondents’ companies tends towards under-performance, perceptions compared to the previous year are roughly flat but companies are hiring and will be spending more. This could be due to any of multiple factors. For example, companies could be re-hiring and increasing budgets as a rebound from previous, overly conservative budget cuts. In other words, companies may have planned for a situation that was worse than the present, and therefore even though the present situation may not be good, hiring and increased spending have become necessary. Another common macroeconomic cause for increased hiring is decreasing workforce productivity. Additionally, some companies may increase spending in response to increases in spending at competitors in order to “keep up with the competition.” This discrepancy could also simply be a flaw in the survey, or perhaps a real difference in perception between the overall attitudes of life science tools companies and individual employees. There are many possible explanations, and we simply do not have enough data to evaluate all of the possible causes. All are free to draw their own conclusions.
Regardless, while the responses about company performance and the perception of the overall life science tools market are tepid, we are encouraged by the trend towards hiring and increased spending, and hope that companies rightfully see a reason to continue to invest in future growth.
Let The Scientists Decide
Carlton Hoyt
A common failure in life science marketing is being too pushy. Marketers frequently try to force scientists into accepting their viewpoints by making bold claims and attempting to force marketing content upon them. This approach, however, misjudges the audience. Scientists are taught to be skeptical and to arrive at their own conclusions. When companies are selling scientific products to them, scientists approach a purchasing decision with that same level of skepticism. Bold claims and forcefully wielded content do not overcome that skepticism.
Most life science marketers (and therefore, presumably, most people reading this post) were scientists at one point. Think about yourselves and how you would make a purchase of any significant importance. Maybe a computer or a television. You likely didn’t just go to a store (online or in person), look at one model, decide that you like it and buy it right there on the spot. You most likely looked up other options, researched reviews, or asked around to see if anyone you know has had experience with that model or brand. Scientists do the same thing when making purchases for their labs. They shop around, ask around, and compare multiple options. They form their own decisions, regardless of how many benefits you claim, how many features you have or how many testimonials you tout. There should be no expectation that your marketing will be able to take someone from a point of mere curiosity to the point of making a purchase then and there. Yet so much marketing is designed to do just that.
The most common reason for this overbearing and unrealistic marketing approach is fear. Put simply, many marketers fear that if they do not generate a lead or sale at any given point of contact then they have “lost.” This is not the case – ask any life science marketer how many “touches” a prospect needs to become a lead, then a lead to an opportunity, and finally an opportunity to a sale. The answer will almost never be “one”. However, marketers are unwilling to lose control. You need to be able to accept that scientists are going to shop around, try to find more information, and eventually come to their own decisions. They are simply too skeptical to accept your company as the sole provider of information in their purchasing decision.
This does not mean that marketers need to sit back and watch the purchasing decision get made. Marketers are correct in being proactive. However, in order to create a truly effective marketing campaign, life science marketers must understand what the customers will want to know and how they’ll want to obtain that information. There will be content that the customer wants that is out of your control. The best marketing campaigns will neither refuse to cede control nor allow the scientists to continue their decision-making alone, but rather will act as a shepherd that guides them to the content that both satisfies their needs while helping to validate the company’s claims.
Let the scientists decide. Just be there to help them make their decision in your favor.