Online Leads: It’s All About Speed
Carlton Hoyt
Almost all life science companies market via the internet these days. Of those, a vast majority have a method of capturing leads online – be it a contact form, an e-mail address, or even a post on the wall your company’s facebook page. Everyone always tried to have a fast response time to display their superior customer service to prospective customers, but it wasn’t until recently that we realized how important it is to have excellent response time to online leads.
A recent Harvard Business Review study found that online leads go cold incredibly quickly. Quoting the article: “Firms that tried to contact potential customers within an hour of receiving a query were nearly seven times as likely to qualify the lead (which we defined as having a meaningful conversation with a key decision maker) as those that tried to contact the customer even an hour laterâand more than 60 times as likely as companies that waited 24 hours or longer.” Wow. This data implies that companies that responded in 24 hours or more are potentially losing 98% of their sales from online leads.
Not to say we shouldn’t take that information with at least a little independent thought of our own. This information was compiled by tracking leads across 42 different companies in no particular sector, and includes both B2B and B2C sales leads. I can personally speak from my own experience both as a former scientist and as one who sold to them that scientists act more deliberately than the average consumer and therefore leads likely don’t go cold quite as fast. Still, even if you apply such an assumption, the data is still overwhelmingly supportive of cutting your lead response time down to a few hours at most.
The researchers go on to offer some reasons as to why companies aren’t responding faster to online leads: “Reasons include the practice of retrieving leads from CRM systemsâ databases daily rather than continuously; sales forces focused on generating their own leads rather than reacting quickly to customer-driven signs of interest; and rules for distributing sales leads among agents and partners based on geography and âfairness.â ”
What is your company’s average or median response time? Do you keep track of it? If not, this data certainly encourages you to do so. After all, you wouldn’t want to be the company losing 98% of its leads.
Site Metrics: Where to Focus?
Douglas E. Rogers
Website analytics can provide very useful information to bioscience companies. It can be used to assess the effectiveness of your marketing messages, optimize your site navigation, and track external marketing campaigns. At it’s most basic, and without spending too much time on the matter, most companies want to know one thing: how much traffic are we getting? For most purposes, however, this isn’t the question they should be asking.
By “traffic”, most people are referring to visits – how many people viewed their website over a given period of time. Alone, that doesn’t really tell us much. Another measure of traffic is pageviews – how many pages on a website were viewed over a given period of time. Again, that doesn’t really tell us much on its own. Where you get to some rich metrics is in the pages per visit and the bounce rate. Pages per visit is exactly what it sounds like – how many pages the average visitor is viewing. A “bounce” is when a visitor views a page and then leaves the site without viewing any other pages. Having high pages per visit and a low bounce rate is indicative of quality visits. It is an indication that your content is relevant to the people that are finding your site, and you are successfully engaging those people with your content.
Another good thing to focus on is your search engine optimization as measured via search rankings for relevant search terms. While you can’t get your search rankings via Google Analytics or similar free analytics tools, there are tools on the internet for determining your search rankings. Our favorite is Rank Checker from SEO Book. It’s a plugin that operates in the Firefox web browser and can tell you your rank for up to 100 different terms at a time in Google, Yahoo, and Bing search engines, save searches and output results into .csv files which can be opened in Excel. Knowing where you stand in search rankings, and keeping track to see if you’re moving up or down in key search terms, is key for driving relevant (and free!) search traffic. This information can be analysed in conjunction with search traffic data from Google Analytics to determine if you’re optimizing for the right terms. If you’re very high in the search rankings for a particular term, but you’re not getting much traffic from searches for that term, then it’s likely that few people are searching for that term in the first place and you should consider how you can re-optimize for a more popular but still relevant term.
If you dig just a little deeper into your analytics instead of just looking at raw traffic, you can learn a lot more useful information.
What Inventors Don’t Think Of
Carlton Hoyt
Most great life science inventions come straight from the bench. That also means that most great life science inventions come from career scientists, who are most often inexperienced in commercialization. There’s a host of things that you should think about before rushing to commercialize and many scientists turned first-time inventors often neglect one or more such issues. We’ll go over a few commonly skipped considerations so when you have the next great idea, you can properly vet it before you run to your patent attorney.
1) Be sure you own your IP!
There’s a good chance that great idea of yours may not belong to you (at least not totally). If you developed it at work or school, your institution may have a partial or full claim to your IP. Check your employment contract or other signed employment documentation. A similar issue: if you have a great idea that is essentially an improvement of another technology but is based on that other technology (in other words, your invention would require the existing technology in order to operate) you can claim rights to the improvement and file a patent, but will most likely be unable to commercialize it due to needing protected technology in order to do so.
2) Is your idea as good as you think it is?
It’s easy to get really excited about an idea for a new invention, but your emotions have to be tempered with reality and pragmatism. Is your idea really as good as you think it is? Understand the key differentiators of your technology. For example, would it be cheaper, faster, easier to use or would produce better results? What Ask some trusted friends and get some feedback or set up a survey using a free online survey tool (without giving away the idea!) and leverage social networks, forums, colleagues, professional networks, etc. Be sure others think your idea is a good one as well.
3) Is there a market for your invention?
Just because you need something doesn’t mean anyone else does. Would this product be used by a large enough market in order to justify pursuing it? This decision will need to be based primarily on three things: market size, price of the product, and cost to develop it. Ballparking at this stage is perfectly fine, but you want to be reasonably certain that your development costs would be far less than your total potential lifetime sales.
4) What would it cost to make / what would scientists be willing to pay?
This is a frequently overlooked issue early on. While without manufacturing experience or having worked in a manufacturing environment the cost of building a product can be difficult to quantify, you can think in terms of simplicity. Simple things are usually cheaper and easier to make than more complex things. If your invention would be approximately 20% better in a certain performance metric than the next best technology available but would be 100% more complex, think long and hard as to whether researchers would pay about twice as much for that 20% increase in performance.
Another small piece of advice for those innovative minds out there – don’t always think big. Some incredibly profitable yet relatively simple inventions have come in areas that were ignored for decades. Things slip under the radar all the time, and if no one else is thinking about a topic the lack of competition among innovators in that area can make commercialization much easier and improve your likelihood of success.
The Limitations of Referrals
Carlton Hoyt
While less common in highly technical industries such as life science tools and services, it’s not wholly uncommon for entrepreneurs to “boot-strap” their start-up companies (try to start without external funding and race to become profitable before they run out of cash). Yet more common, even with outside investment, is under-capitalization. In either case, when small companies start to become low on cash, one of the first corners that often gets cut is marketing. Entrepreneurs sometimes think that word-of-mouth or referrals will be a sufficient marketing tactic to grow their business, but that is very rarely the case for life science products and services. Why is this the case? Customer interaction patterns. To illustrate my point, let me give an example of when referral-based marketing can be effective.
Take Twitter as an extreme example on one end. Twitter never advertised. They were established 100% on word-of-mouth marketing and over their short sub-5-year history have ballooned to over 200 million users and are now the ninth most popular site on the internet. You can top that off with an estimated valuation of $8 to $10 billion dollars. Why was twitter able to be so successful at harnessing the power of referrals / word-of-mouth marketing? There are two key factors. The first is that Twitter was something that people were excited about and talked about – obviously you can’t be successful at word-of-mouth marketing if you don’t create something that people want to talk about. That, however, is something that life science companies can replicate. The other factor, however, is something that life science companies cannot replicate, and that is customer interaction patterns. Anyone, anywhere could be a twitter user so long as they had a computer or a cell phone. This meant that in many markets everyone was a potential user, and connections between users and potential users could be drawn seamlessly. Interaction between the groups was very easy and close at hand.
Companies manufacturing life science tools do not have the advantage of everyone being a potential customer. Customers are usually grouped into discrete units with limited interaction – universities, research institutes, pharma / biotech company research centers. If a scientist at university X is very happy with your product, this scientist will tell others around him or her, but the pool of potential customers will often be limited to those within their institute since that is where the relevant connections involving frequent interaction stop. This is especially true in the more restricted-access and secretive environments of pharmaceutical and biotech laboratories.
You can analogize the situation to an infectious virus. If a virus can infect anyone, it will have an easy time spreading. If it can only infect a small subset of the population, however, and those populations are grouped together and quarantined from each other, the virus will have a very difficult time spreading. A similar quarantining happens to word-of-mouth marketing in the life sciences, so don’t rely solely on referrals to grow your market share. There are enough low-cost and effective ways of marketing to provide even cash-strapped bioscience startups high-ROI options to more proactively reach their target audiences.
Success in Product Development
Carlton Hoyt
For companies, success in life science product development does not mean completed development of a single product, or even successful commercialization of a product. Likewise, triage of one product development project does not equal failure. Successful product development lies in product development operations which best contribute to the success of the company. For any life science product development project, or for product development operations as a whole, projects must be evaluated for four key factors: value, strategy, balance, and resource availability.
Value is the most obvious factor by which to evaluate a product development project. There are many metrics by which to measure project value, such as net present value (NPV), expected commercial value (ECV), Productivity Index (PI) and a host of others. Our favorite metric is slightly different – We take the NPV of expected future profits, divide that by the NPV of project costs, then multiply by the probability of success. Note that for projects that are in progress, only future costs are considered. Money already spent can’t be recovered, so it is effectively irrelevant. Value, while very important, should not be the only thing considered. If your company is evaluating projects by value alone, you are likely making some poor decisions and not realizing it.
Strategy is crucially important in selecting life science product development projects. Companies must determine how the product will fit in with their greater strategic direction. A project that does not fit with the company’s strategy can shift focus away from more important areas, both within and outside of the context of product development.
Bioscience companies should also have a balanced portfolio of product development projects. Balance comes into play in many forms: long-term projects vs. short-term projects, projects with higher probabilities of success vs. those with higher potential returns, projects that are a close fit with corporate strategy vs. projects that are more loosely aligned, products that will protect markets vs. products that aim to expand the company’s market, etc. Too little product portfolio balance, either by too little diversity or too much, can increase risk.
Last but not least, life science product development must take into consideration resource allocation and availability. If an otherwise attractive project will hit a bottleneck because of insufficient resources, it may be more effective to begin another project first which better addresses current and projected resource availability.
In order to be successful, companies need to look at life science product development at a high level, ensuring that not only is each product right for the company, but all product development projects taken as a whole represent the best mix of projects for the company in terms of value, strategy, balance, and resource allocation. While many companies will rush to declare success based on individual projects, lasting success will come from a product development selection process that takes into account multiple factors and is geared to improve the company’s performance over a long term.
Encouraging Action
Carlton Hoyt
Life science marketing often involves an abundance of technical information. This is often for good reason – scientists are inquisitive and want to know what they are potentially buying. What amazes me is how often, in the whirlwind of technical information, lists of benefits, and descriptions of products, life science marketers fail to use effective calls to action. Alarmingly frequently, life science marketing materials contain a complete lack of any call to action whatsoever. There have been brochures, product pages on company websites, and a host of other materials where I get to the end and think “so if I’m a customer, how do I go about buying this or making an inquiry?”.
There is no excuse to not have a strong call to action in your marketing materials, be them print, web, or other. Calls to action to not detract from the content of the message, they don’t have to be distracting, and they are incredibly easy to use. Simply think at what point(s) a potential customer would want to place an inquiry or make a purchase and provide them simple, straightforward directions for doing so. If you want them to call to make an inquiry, tell them to call in order to do so. If you’d like them to fill out an online form, provide a link or put the form in a sidebar, etc. If they can purchase online, put an “add to cart” button on your site or direct them to your e-commerce page.
When you get your marketing message in front of potential customers and you have their attention, you have successfully completed one of the most difficult tasks in life science marketing. Don’t waste that opportunity by failing to lead them to the next step in the sale or inquiry process. Continue the engagement by using calls to action which inform them how to continue to the next step in the purchase process and encourage them to do so.
Leveraging a Weak Dollar
Carlton Hoyt
In one of the first posts on our new site we discussed some ways in which life science tools companies can take advantage of a weak dollar, but with a decidedly U.S.-centric focus. With the dollar index hitting a three-year low last Thursday and not far from an all-time low, we decided to revisit the topic, this time with an international focus. While a weaker U.S. dollar is most often a positive for U.S.-based manufacturers, it can pose problems for international companies that want to export into the United States. While there is no way for a company to circumvent the exchange rates, a very weak dollar may present a good time to act on certain cross-border opportunities for some non-U.S. life science companies.
The U.S. Dollar Index (5-year chart)
For non-U.S. distribution companies, the exchange rate probably doesn’t seem so bad. A cheap dollar can be a good time to stock up on inventory from U.S. suppliers. Manufacturers need to look a little harder for a silver lining as their products become effectively more expensive in the U.S. Now, however may be a time to look to the U.S. to source parts, etc. in order to decrease manufacturing costs. If you are willing to bet that the dollar is near a local minimum, you may even want to prepay for items that are sourced within the United States.
Ever think about starting operations inside the U.S.? Now might just be the time. One-time expenses will now be relatively cheap and operating costs will currently be low, allowing your company to mitigate the large capital outflows necessary to begin operations. (shameless self-promotion warning: looking for a way to less expensively start U.S. operations?) Speaking more generally, for non-U.S. companies, now is the time to execute dollar-denominated contracts.
The dollar may not stay weak for long. With expected budget cuts by the U.S. Government and tightening of fiscal policy by the Federal Reserve (including the end of the second round of qualitative easing) imminent, it is likely that the dollar will stabilize at the very least, meaning we are likely near or at low levels. If your bioscience company have a future expense that will be in dollars, you may realize significant savings by pushing that expense forward and executing now.
A Note on Off-Site Blogs
Carlton Hoyt
Going somewhat in step with our previous post on projecting expertise, I’ve noticed a recent trend of life science companies starting or sponsoring unbranded, off-site blogs. I have no problem with using such blogs as a marketing tool so long as the strategy for doing so is properly addressed. There are a lot of potential things that can be done wrong, strategically, and some key issues need to be considered before launching an unbranded off-site blog. Here are a handful:
- Scientists don’t like underhanded marketing. If you’re promoting your company or products and you aren’t forthcoming about self-promotion (for example, neglecting to mention that the blog is written by a company employee or that the blog is funded by your company), scientists will think you are trying to trick them and that will hurt your reputation.
- How will you target the desired audience? I’ve witnessed many of these blogs post information that doesn’t seem to have a well thought-out theme and end up being more general and less focused than the target audience. Remember the ultimate purpose: marketing.
- Set goals, and make sure they’re well-defined. What do you want to achieve? How will you measure success? If the blog isn’t meeting the required metrics, take it down and focus your resources somewhere more worthwhile.
- Have a valid reason for neither incorporating a blog on your main site, nor using your branding in a more prominent manner.
Off-site / unbranded life science blogs can be good marketing tools when used correctly, but all the rules of marketing still apply. Think strategically to make sure that you’re achieving your goals with such a blog.
Be The Expert
Carlton Hoyt
The life sciences are, almost by definition in being a science, a highly technical field. Most life science products, and certainly life science services, are of a similarly highly technical nature. At the same time, experiments are precious and expensive. In this environment, scientists want to be sure that the products and services they purchase will provide high-quality results, and they are often highly skeptical customers. For many small life science companies which may not have the strong branding or widely adopted products or larger companies, such skepticism can be especially acute. Making customers comfortable enough with your company and products to shake this skepticism can pose a challenge, but there are strategies that small life science companies can leverage to help preempt it. Among the best strategies is to project an image of being an expert in the relevant scientific areas. This requires two things: actually having expert knowledge and understanding, and successfully projecting that knowledge.
Being an expert is often the easier component of the strategy. Chances are if you are creating a product for a particular purpose you already have members on your team who are experts in the the relevant scientific area. There are rare situations where this is not the case, however, and the solution is straightforward – learn. Never will a scientist run from your company faster than if your customer-facing employees don’t know what they’re talking about.
Projecting your expertise is harder. Some customers will contact your company if they have doubts, giving you an opportunity to demonstrate your knowledge and ability to them, however many customers will never contact you in the first place if they question your knowledge and skills in key areas. This requires you to be proactive in projecting your expertise. You need to actively seek out opportunities to show the scientific community that you really are a top-caliber thought leader in your field. How can you do this? There are many ways, and here are a few ideas (this list is nowhere near comprehensive):
- Discuss new research and ideas in your field on social networks
- Present at relevant scientific conferences
- Author or co-author methods papers or other journal articles
- Make compelling presentations of your technology on your website
- Draft white papers
- Maintain a blog where you address current topics in your field
- Create a website with updated information relevant to your life science field
Scientists want to do business with people and companies that it has faith in, and a large part of that is faith that you have sufficient expertise. By effectively projecting the image of an expert, you will simultaneously improve your brand image earn the trust of scientists, effectively making them more willing to do business with you.
The Lost Art of Go / Kill
Carlton Hoyt
Great ideas are precious things. They are the fuel driving innovation, the sustenance of progress, the energy that powers success. Not all great ideas are so great in practice, however. In the life sciences, as in all industries, ideas that are put into action need to be periodically re-evaluated to make sure they are working out to be as good as we thought they were. If they are not, then we would be best off scrapping them and focusing our energy and resources on something else … but life science companies seem to have a very hard time doing so, and this inability is to their detriment.
For your information...
Want to learn more about go / kill decision making? You can read about the stage-gate project management technique, from which go / kill is based, on Wikipedia.The area where this lack of go / kill is most prominent and has the largest effects is product development. Life science product development projects have well-defined milestones and easily tracked metrics, yet go / kill criteria are usually nonexistent and when they are they are most often poorly defined and almost never strictly obeyed. Put simply, not having such criteria is a poor business practice and not obeying them is a poor business decision. Go / kill criteria are defined based on the risk at any point in time in comparison to the revenue potential. This information, which may be subjective but is still based on the best knowledge and information at the time the criteria is created, tells us whether we are likely to achieve our desired returns at any stage-gate (the point at the project when the go / kill decision is made) if we move forward with the project. If you are unlikely to achieve the desired returns, and resources would be better allocated elsewhere then the kill decision should be made, yet it very rarely is.
It is, to some extent, easy to understand why companies so infrequently utilize stage-gates successfully. Kill decisions are hard to make. In our business culture, killing a project is often interpreted as the project failing and this can cloud the business judgment of those on the team who do not want to appear to have been on a failed project. In practice, recognizing the need for a project kill and implementing it should be commendable, a gesture that the project team are willing to put the greater good of the company as a whole. Unfortunately, this rarely happens. No one ever handed out a “best project kill decision of the year” award. Kills are not seen as an achievement but project completion is, so most often projects push on even in the kind of adversity that makes desired returns extremely unlikely.
Other types of endeavors can benefit from stage-gate type go / kill decision making. For example, marketing campaigns can be periodically re-evaluated for ROI determination. If the ROI is not up to par, the campaign can be killed in favor of another which has a greater likelihood of success. Distributor / supplier relationships can be subjected to go / kill, and because of easily quantifiable metrics these decisions can be very easily gauged. Go / kill gates can even be easily and beneficially applied to the continuation of existing products. There are a multitude of other areas where life science companies can benefit from such gates as well.
Ensuring that resources are allocated to areas providing the greatest benefits is a cornerstone of a successful company. Ongoing projects and processes have a need to be periodically reevaluated to determine if they should be continued or “killed” in favor of other more promising endeavors. Despite this, life science companies rarely use go / kill decisions. Implementation of stage-gates and proper adherence to go / kill criteria will help life science companies ensure that that their resources are more optimally allocated and utilized.