Increasing Customer Affinity
Carlton Hoyt
Affinity has a transformational value on brands.
Google, Facebook, Apple and Amazon have all moved beyond having a simple transactional relationship with their customers to one that creates intimacy and serves their needs in a more holistic manner. These companies are generous, they are unselfish, and their approach is well beyond one of asking for the next sale. Whereas most companies self-promote in order to obtain the customer’s next purchase, elite brands seek not only to create customer loyalty, but to be loyal to their customers.
The overwhelming majority of companies are only good at fostering transactional affiliations with customers. They ask for their business, the customer gives it to them, and that is largely the end of the relationship. Companies frequently try to obtain repeat business; those who do so well attract supporters – customers who have moved beyond individual transactions and consciously prefer your brand, buying repeatedly. Relatively few companies are effective at recruiting promoters, people who actively share their positive impression of your brand through advocacy to others. Those brands which have strong networks of promoters are often very successful, but there is a fourth level of customer affinity that not only drives even further degrees of loyalty, but also leverages customer assets to build brand value even further, creating a positive feedback loop for both the brand and customers: co-creation.
Co-creators actively add value to the brand by contributing to its offerings for other customers. They are so invested in the brand that they add to it themselves. This may be altruistic, but may also be to realize some kind of return, be it financial, recognition, or otherwise.
Increasing Affinity
Most companies pay careful attention to how loyal their customers are to them, measuring things like net promoter score and tracking sentiment on social media. They think that good customer service will win the loyalty of customers, and while good customer experiences may turn transactors into supporters and perhaps even the occasional promoter, good service is not enough to routinely transform customers’ affinity to the highest levels. In order to move up the affinity ladder, brands need to not only focus on how loyal their customers are, but how loyal the brand is to their customers. If a customer is anything more than a transactor, they are giving you more than money. Likewise, you need to be doing something more than selling products and services (in other words, creating transactions) to better foster that affinity. You need to actively add value to the lives of your customers outside of the transactional realm.
Building co-creation opportunities often, but not always, requires a degree of altruism. You must seek to provide opportunities for your target market which do not actually cost them anything.
Examples of Co-Creation
Many businesses are built entirely around co-creation. Yelp or any user-driven recommendation website are almost entirely based on co-creation. Facebook is driven by co-creation. Airbnb is a co-creative endeavor, relying on its hosts to build the success of their platform. Your business, however, does not need to be centered on a co-creation business model in order to leverage it for increased customer affinity.
Customer-centric resources are tools that any company can use to greatly heighten customer affinity. By helping customers solve problems outside the context of a buying journey, you will provide massively positive experiences that will increase affinity. While resources do not require a co-creation component, such a component may be integrated into them. Consider the Nike+ ecosystem, where users can share workouts, compare progress with friends, and help motivate each other. The GoPro Channel is another well-known co-creation resource, where GoPro leverages its own popularity to support its customers’ best creations.
Social Media, “Engagement” and the Affinity Failure
Many marketers consider themselves to have succeeded at forging relationships with customers if they have high “engagement” metrics or large social followings. These are not indicators of affinity and are often vanity metrics. A social follow is by no means an indication of support, and it certainly does not suggest that the follower will promote your brand. In the life sciences and most B2B industries, social media is largely a platform for the dissemination of content. It is a utilitarian tool. While the ability to foster personal relationships with members of your target audience certainly exists, social media is not a natural channel for brand-customer communication. If your goals are to increase your audience size and reach, seek new social followers. If your goals are to increase customer affinity, look for non-transactional ways to provide value to your audience.
As customers not only take greater control of their purchasing decision journeys but compress them as well, brand affinity becomes increasingly important. Those brands which are able to create heightened levels of customer affinity will have immense advantage in an accelerated journey which reduces the consideration and evaluation phases. Customers are increasingly making decisions based on established preferences. The brands with the greatest customer affinity will be the winners.
The End Is Not Nigh (now let’s get serious…)
Carlton Hoyt
People love to decry the end of marketing. It’s a good attention-getter. While those who shout about the coming of the end of marketing from their soapboxes are usually guilty of lacking realism or using poor logic, they do make us think about the future and that can be a learning experience. Let’s take an example…
Knowledge @ Wharton recently published an interesting, albeit narrow-sighted and overly apocalyptic article about the end of marketing and what, according to the author, will be the very narrow opportunities to engage audiences that will remain in the future. The author does a very good job of identifying trends but a very bad job of predicting what the future will likely look like, but both the good and the bad provide important lessons and highlight valuable opportunities.
First, the trends. No reason to discuss these much because most should be more or less obvious to anyone reading this.
- People would rather listen to other people than brands.
- People are going to greater lengths to avoid the onslaught of advertisement.
- Marketing technology “cannot truly understand the complexities of consumer intent” and therefore hitting the trifecta of the right message on the right channel at the right time is exceedingly difficult. (This I would actually say is up for debate. It’s a gray area. A discussion for another time, perhaps…)
- Marketers are overwhelming digital channels, further driving users to avoid marketing out of simple necessity. See point #2.
And here are the author’s four corresponding points of how he envisions the future:
- “As consumers bypass media with greater ease, the social feed is the wormhole to the entire online experience.”
- “As consumers outcompete marketers for each otherâs attention, every piece of media contained in the feed is not only shareable, but shoppable.” – basically, he’s arguing that social channels become capable of performing transactions.
- “As the individual controls the marketing experience, communication shifts from public to semi-private.” In other words, people move from things like Facebook to things like Snapchat, where there are fewer ads and more privacy.
- Only two types of marketing will remain: discounts / sales and transparent sponsored content.
These predictions amount to a wild fantasy.
The most obvious flaw in the author’s reasoning is that somehow a completely shoppable social media ecosystem would evade the rules that everyone else has to play by – namely that when marketing becomes overwhelming, the audience will block it out or leave. This also ignores the plain fact that the large majority of the things that people buy are not found organically via social media. There is no shortage of people who shop. Decisions may be influenced in the social sphere, and perhaps some impulse decisions both begin and end there, but those are the exception; the overwhelming majority of purchasing decisions do not occur entirely within the social sphere and that would not change if social channels were empowered with transactability.
The real world contains a great deal of equilibrium. The ability to target people and their ability to tune it out is a balancing act. It is a cat and mouse game. Technology works both ways, and as new channels and technologies are born there become more ways to reach customers. However, as channels are flooded, the impact of each individual effort diminishes. Marketing self-regulates by decreasing its own ROI as utilization of any particular channel increases.
So What Will the Future of Marketing Look Like?
There are definitely many channels that will continue their trend towards ineffectiveness. It’s increasingly likely that audiences, fed up with maddening digital display advertising techniques, continue to adopt ad blocking technology and erode the potential of that channel. Email, while still rated as a high-ROI channel, is looking like it may have a perilous future as email service providers become better at filtering out promotions. Social media will certainly take on a larger share of permission-based marketing, but it will remain a risky business to rely too much on “rented” audiences. Increasing utilization of content marketing will continue to add noise and, in turn, increase its own cost by requiring better and better content to obtain the inherently limited resource it seeks to obtain: the audience’s attention. Increased use of social media may, if adoption increases as we project, fall victim to a similar effect, limiting brands’ ability to market effectively using social channels.
Not all developments will be bad. A decline in interruption tactics will lead to a fundamental shift in how marketing is viewed from a tool to generate demand to a mechanism to deliver value to audiences and a source of strategic advantage. Customer-centric resources and other owned platforms will proliferate as companies seek new ways to deliver value to customers while increasing the affinity level between customer and brand. These companies with strong brand affinities will create sustainable advantage for themselves as they shortcut and compress the customer decision journeys. Additionally, new and yet unknown channels will develop, and at increasingly rapid pace. Consider that until about 20 years ago, no digital channels existed at all. Accelerating technology development will continue this trend and also enable more personalized, coordinated, and targeted marketing in a manner which is more accessible and usable by companies of all sizes, budgets and capabilities.
I’m not going to try to pinpoint detailed specifics – I’m not claiming to be a psychic and it would be a waste of your time to read simple conjecture – but there are things that we can be fairly certain of given current trends, a bit of logic, and a hint of foresight. Marketing isn’t going anywhere, and while in the future it may not look quite like it does today, it will still be something that Philip Kotler would distinctly recognize.
A very telling thing happened in October. YouTube, in preparation to release it’s paid subscription service, Red, told its top content creators that “any ‘partner’ creator who earns a cut of ad revenue but doesnât agree to sign its revenue share deal for its new YouTube Red $9.99 ad-free subscription will have their videos hidden from public view on both the ad-supported and ad-free tiers.” (ref: TechCrunch). In other words, if content creators who are getting revenue from their YouTube videos don’t agree to Red, their channel will go dark. All those subscribers will mean nothing if they can’t access your content.
This should be something of a reality check for marketers. On YouTube or any third party social channel, your audience doesn’t belong to you; it belongs to the channel. Those Twitter followers? Twitter owns them. All those Facebook likes? They’re not your property, they’re Facebook’s. Any one of those channels can do anything they want with them at any time. Feel insecure? It is.
What if Facebook removed access to people who have liked your page unless you pay for engagement? There’s no reason they couldn’t. Or what if the social network that you’ve poured so many resources into in order to develop a large following were to fade away – perhaps people start abandoning Twitter en masse for Snapchat (or whatever comes after Snapchat)?
You don’t own your social media audiences. In many cases, you don’t even own the content you’ve shared on that social channel. You definitely don’t own your advertising audiences or any other audience which is rented. Any and all of these audiences can be taken away. If you’re looking to develop an attentive and loyal audience that’s both engaged and secure, what can you do?
Building an Owned Audience
Building an owned audience requires that you create a platform for audience growth which is under your full control. Any audience on a “rented” channel belongs to the channel and not to you.
Building an owned audience also requires that the channel you create offer sufficient value such that people want to engage with it and return to it. Getting someone to hit the “follow” button on a social platform is very non-committal. Getting someone to sign up for an entirely new platform is a higher bar. You need to ensure that you sufficiently understand and address genuine audience needs in order to for them to commit. Furthermore, unlike social media, you need to provide enough value that the audience will go back just for the value your owned platform provides; there won’t [necessarily] be many other people and brands drawing them back into it, giving them reasons to return and engage. While yours may be just one of 100 liked pages and 500 friends competing for space on a Facebook user’s feed, that may be enough to provide you with the opportunity to grab for their attention. There may be a lot of competition for that attention, but there are also many reasons for the users to continuously return to the channel; the burden of reeling the audience back in is widely distributed among their many connections and the platform itself. On an owned channel, you must make it entirely your responsibility to entice to engage and continue to reengage over time, but each time they do you own that attention. You write the rules.
That begs the question: What do you need to do to build an owned channel?
The form that the owned channel takes is irrelevant. The form should simply be a response to audience needs. It can be as simple as a blog or as complex as anything you or I could imagine. There are only three requirements:
- It has to provide genuine value to the target audience. That’s what is going to attract their attention. Understand what problems your customers are having and focus on helping to solve them. Your platform has to be primarily about your customers.
- The value has to be sustained over time. An audience that only pays attention once doesn’t do you much good. While the audience itself can sometimes be leveraged to add value to the platform, don’t plan on it happening. Expect that you’re going to have to be the one to continue to add value to the platform over time. If that seems like an unsustainable effort, it may be time to go back to the drawing board.
- It has to meaningfully connect the audience with your brand.
By creating a platform which enriches the lives of members of your target market, you’ll find yourself growing a willing, captive, and secure audience – on your terms.
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Is Publishing the Holy Grail of Content Marketing?
Carlton Hoyt
There’s a lot of noise coming from some fairly reputable sources extolling the virtues of publishing as the next generation of content marketing (I’m sure you’ll be very familiar with this if you follow the Content Marketing Institute at all). For instance, let’s take a look at a recent article from the Harvard Business Review website – “Content Is Crap, and Other Rules for Marketers” – which makes some great points, but misses some equally if not more important points.
To begin, let’s summarize his 4 rules, which are all extremely valid points…
Rule 1 – Recognize that content is crap. This is best highlighted by the author: “We never call anything thatâs good ‘content.’ Nobody walks out of a movie they loved and says, ‘Wow! What great content!’ Nobody listens to ‘content’ on their way to work in the morning. Do you think anybody ever called Ernest Hemingway a ‘content creator’? If they did, I bet he would punch âem in the nose.” He goes on to state that marketers need to be more like publishers.
A bit of a side note before we move on. The author is appealing to emotion a bit and is forgetting that content is a somewhat technical term – no one says they drink “dihydrogen monoxide” either. What this is more illustrative of is the mentality of many content marketers. What’s important isn’t, for example, that the people who watch great movies don’t refer to it as “content” but that the producers, writers, directors, and actors who set out to make a great movie don’t refer to it as content. It’s the mentality of content – making “stuff” that begs for attention – which gets people stuck in a losing paradigm and it’s a paradigm that needs to be dropped.
Rule 2 – Hold attention, donât just grab it. “Marketers need to build an ongoing relationship with consumers and that means holding attention, not just grabbing it. To get people to subscribe to a blog, YouTube channel, or social media feed, you need to offer more than a catchy slogan or a clever stunt. You need to offer real value, and offer it consistently.” The author argues that publishing solves this problem.
Rule 3 – Donât over-optimize metrics. It’s too easy to confuse measurement with meaning. He uses the example of Buzzfeed, who no longer uses clickbait titles as they’ve realized that they optimize for pageviews, which are just clicks, but betray the readerâs trust. By under-promising and over-delivering, you create more engagement with the content and make it more likely that the reader will return to read another article later. It’s the long game vs. short game conundrum. You can make the numbers look good if you pretend not to care about your numbers a year from now.
Rule 4 – Understand that publishing is a product, not a campaign. In brief, the author makes the point that one of the keys to being successful in being more like a publisher is to treat it with more permanence and seriousness.
There are some great points here… Content is not enough. You can’t simply interrupt your way to success; you need a way to build an audience. Ensure your metrics are effectively measuring value creation. And publishing has serious merits, but the answer is bigger than publishing.
The Inherent Problems With Publishing
Yes, publishing is often superior to more basic forms of content marketing, but it’s not for everyone. Not every company has some amazing, inherently compelling story to tell, and not every company has the resources to continually deliver pieces of that story through carefully crafted content consistently over a long period of time. That’s a massive effort. Assuming publishing is a magic bullet ignores reality and ultimately falls victim to the same problems plaguing other iterations of content marketing: if it becomes well adopted, it’s very quickly going to become much more difficult to do effectively.
The audience’s attention is inherently limited, and while publishing tries to occupy more of that attention, it doesn’t solve the attention problem and it falls into the same trap as more “generic” forms of content marketing. It’s actually a natural response to the lack of supply of customer attention which follows basic economic principles: If the supply of something is limited and demand increases the result is an increasing cost. As more and more content competes for limited attention the “cost” of the customers’ attention increases, meaning you need higher quality content to obtain it. Treating content marketing more like publishing doesn’t change that fact, it simply throws more resources at the problem so higher quality content can be produced – a necessity to continue to compete for customers’ attention in an environment where it is in ever-increasing demand. It’s not like audiences couldn’t do things such as subscribe to blogs almost two decades ago, it’s simply that it takes a better content effort to grab and hold attention than it used to.
Should You Be a Publisher?
Publishing cannot be the answer for everyone. It is literally impossible for 100% of brands to be successful publishers because the audience does not have enough attention to go around. How can you tell if you should be a publisher? Answer these two questions:
- How interesting are you? Take a good honest look at your brand and figure out how interesting you are. Some have great stories to tell. Some do amazing things. Some would make highly impactful thought leaders. Others simply aren’t so captivating. If your brand simply isn’t all that interesting compared to others in your space, you might want to consider something else.
- Can you – and will you – sufficiently resource the effort? Putting out top-quality content on a regular basis is no easy job by itself, and publishing requires more than that. The amount of time and resources that will need to go into planning, editing, graphic design, etc., will be significantly greater. At the same time, publishing still won’t provide a short-term payoff. Do you have the resources and the necessary leadership buy-in to be a publisher?
The Real Focus
If you’re not in the upper echelon of brands with regards to your ability and willingness to be a publisher, all is not lost. After all, being a publisher is not the goal. The reason that taking on the role of publisher is being touted as superior to content marketing is because it’s more effective at delivering meaningful value to customers. That’s also the underlying reason why it better holds the audience’s attention. At the end of the day customers gravitate to value, and there’s a lot more ways to provide value than just being a publisher.
Shift your paradigm from thinking about content to developing actual resources that solve genuine customer problems. Ask yourself what problems customers are having that they might not pay for a solution to, but are readily solvable with a bit of time and effort. Analyze them, prioritize them, and solve the most critical ones that provide the best opportunity for long-term value creation and evolving the customer relationship beyond a transactional one.
Double down on customer experience. Make it easier, faster, and simpler for customers to obtain value from you. Look at some of the juggernauts of tech – Google, Facebook, Uber, Amazon – they didn’t get to where they are because of content marketing. Most of their content marketing efforts aren’t even on people’s radar. What they do is solve problems quickly and simply. You know what’s a great experience? When you can type a question and an answer appears, when you press a button and a cab simply shows up, or when you can instantly be connected to any of your friends. There’s are myriad examples out there, and while it may be easier to do in tech than in the life sciences, it’s certainly not impossible in any industry.
If you’re existing content marketing efforts are becoming less effective, one option is certainly to hunker down, take it more seriously, and spend the resources to become a highly effective publisher. But that’s expensive, difficult, and only delays the onset of many of the underlying problems plaguing content marketing. Publishing treats the symptoms, not the disease. Rid yourself of all paradigms but the one which relies on this one fundamental truth: customers will favor those brands which contribute the most value to their lives. Let that reality guide your actions and you’ll soon find your audiences flocking to you.
Why MAPs Are Good Business
Carlton Hoyt
I’ve heard a number of manufacturers say that online sales are “a race to the bottom.” That’s a bit like hearing a dinosaur tell you that being warm blooded is overrated. While online sales certainly aren’t right for all types of products, e-commerce often provides a superior experience for purchasers – usually because it’s easier and faster. Research from Forrester has shown that 49% of B2B buyers have intended to buy a specific product then purchased another product because it was easier to buy online. 88% of executives purchase products online. $1.1 trillion of B2B sales are projected to move online by 2020. This will likely only accelerate with generational change, as younger purchasers are far more likely to make B2B purchases online.
There is, however, a legitimate concern that e-commerce, with its much more public pricing, causes downwards pressure on prices. This is strongly exacerbated when selling through distribution – particularly if you have multiple distributors in the same country or who sell in the same currency. Especially in the United States, there is an endemic of discount, online retailers who add little to no value while encouraging price competition and therefore decreasing margins and disincentivizing other distributors from spending on marketing or support. They are effectively leeching off other distributors and, if domestic, off the supplier itself. This creates a situation where pricing is no longer based on value (which has been proven to capture more value) but rather based on cost, with distributors selling at the lowest margins they are willing to accept regardless of the magnitude of the discount the supplier provides. Low margins erode your distributors’ ability to spend on marketing and provide quality support.
Fortunately there is one simple solution to all of these issues; One that prevents the “race to the bottom,” disadvantages distributors who cannot add value to the sale, and potentially allows suppliers to recoup value for themselves. That solution is a strong and enforced minimum advertised price policy. We strongly encourage minimum advertised prices any time where there is competition between sellers of the same product, be it distributor-distributor or supplier-distributor.
MAPs: Encouraging Good Competition
A minimum advertised price (MAP) policy is either a contractual or informal agreement not to advertise products below a specified price. (We strongly recommend that MAP policies be written into distribution agreements to increase their ability to be enforced.) The MAPs may be individually specified for each product or they may be a fixed percentage of all product prices. Distributors who are found to violate the policy are usually given notice and have a specified amount of time (set in the agreement) in order to bring their advertised prices in line with the MAPs. Those who do not may be subject to a range of penalties, varying from reduced discounts to immediate suspension of the distribution agreement.
An enforced MAP policy protects distributor margins, enabling spending on marketing and support, which help drive demand and improve customer experience. It disadvantages distributors who are not adding value to the sale, since by eliminating price competition it forces distributors to compete based on customer experience. These improved customer experiences are positive not only for the customer but also for the brand, since an improved experience will lead to increased overall satisfaction with the brand.
If your distributors are giving deep discounts in the absence of an MAP policy, that probably means you’re discounting more than necessary to begin with, and therefore throwing away value. If you are confident that your pricing is competitive, there should be no need to discount. By discounting, your distributors are affirming that they have more margin than they need. You can therefore reduce distributor discounts and retain more value, or institute a higher MAP and give more value to the distributor, thereby encouraging sales. As most suppliers advertise their own list prices by default, any distributor discounts in areas where you sell direct potentially allow your distributors to undercut you. (We’re big proponents of setting competitive list prices then having MAP set to the list prices.)
Competition based solely on price is detrimental to the distributors, the supplier, and the supplier’s brand. By establishing and enforcing a minimum advertised price policy, you’ll largely eliminate bad competition and replace it with good competition that elevates the brand by requiring competition be on the basis of enhanced customer experiences. You’ll reward your best distributors, discourage the discounting “leeches” who don’t add value, and potentially be able to claim more value for your own company as well.
Stop Thinking About Content
Carlton Hoyt
Content marketers in the life sciences have reached a critical point. The traditional paradigm of content marketing is becoming ineffective. Content marketers have endeavored to create, publish, share, and then repeat this cycle to the point where there is far too much noise. It is becoming ever more difficult to win the battle for attention. Quite simply, content marketing is no longer enough.
We need to shift from a simple content marketing paradigm to a resource marketing paradigm. We need to stop thinking about creating more stuff and start thinking about how to build things of utility that meaningfully help solve our audiencesâ problems.
It’s not just the life sciences that are experiencing this, either. It’s everywhere. This is a pandemic problem across almost all industries. We have recently been honored to have our solution, as elaborated by BioBM’s Carlton Hoyt, recognized by the Content Marketing Institute. You can read about how to take your content marketing program beyond the traditional paradigm and start creating transformational value for your audience which will both captivate them and build genuine value for your brand in the CMI article “Stop Thinking Content, Start Thinking Resources”
The Growth Rate Disparity
Carlton Hoyt
Having compiled quite an extensive amount of published life science market size data, we’ve noticed a lot of very optimistic growth rates. That led me to wonder if that optimism is warranted, given overall growth in life science R&D, or if there’s something about published market reports that cause them to overstate growth rates.
As I’m sure many of us realize, life science R&D spending isn’t exactly skyrocketing. According to the Battelle and R&D Magazine “2014 Global R&D Funding Forecast” life science R&D spending has only rose from $184.2 billion in 2011 to $201.3 billion in 2014. This equates to a 3.00% compound annual growth rate. All else being equal, we should expect to see published life science market growth rates hovering around that, with the exceptional outlier for high-growth markets. It stands to reason that growth in the markets for life science tools and services should be in line with the growth in overall R&D spending.
To determine if the published studies hold to this, we took our list of published market size data and cleaned it using the following criteria:
- Only global market size data were considered. All regional market size data were removed.
- All studies not listing a growth rate were removed.
- All studies publishing data from 2008 or earlier were removed. We only wanted to look at fairly recent data, roughly in line with the time frame of the R&D spending data from Battelle.
- Only the newest study of a particular market from any given publisher was included. If XYZ Reports had a study of the cell culture market from both 2011 and 2013, only the 2013 report data was included.
- If there was data for a directly related market and sub-markets from the same publisher, only the overarching market was taken. For instance, if data for the cell culture market and for the cell culture media market existed from XYZ reports, we would ignore the cell culture media market data in favor of the broader cell culture market data.
This data cleaning still left us with quite a large amount of data – 104 studies. These studies projected an average growth rate of 11.2%, far higher than the 3.00% increase in life science R&D spending. Weighted by the value of the market size estimate, the weighted average was still 10.4%, again far greater than life science R&D growth. In fact, the lowest growth rate from those 104 studies was 4.0% (a 2012 BCC Research study of the electrophoresis market and a 2013 Decibio study of the Life Science Research Tools Market). Even the lowest published growth rates are higher than the growth in life science R&D spending. This makes absolutely no sense.
There are a few potential ways in which our analysis may be flawed, either by bias or by failing to consider all realities. For instance:
- The data we compile only includes studies that make public the market sizes and growth rates. This excludes a number of market research companies operating in the life sciences space. While our analysis included 104 studies, these studies all came from only 7 companies. Still, there is no evidence that these growth rate estimates are far higher than the estimates from any other companies.
- Some of these market sizes may include growth from outside the life science R&D sector, such as diagnostics or life science (pharma / biotech) manufacturing. While this may be true in part, it does not explain the size of the disparity. With the exception of certain high-growth sub-markets, such as biosimilar manufacturing, IVD and manufacturing growth rates are both generally predicted to be in the mid single digits.
- Companies which publish research may be focusing on “hot” markets and more likely to release studies on those high-growth markets. This is potentially a source of bias, however there are many very well-established markets included in this analysis (cell culture, research antibodies, chromatography, electrophoresis, microscopy, etc.) and even those markets have growth rates higher than the overall life science R&D market. The same can be said for market studies that analyze the life science tools and services markets at a very broad level, such as “Life Science Research Tools,” “Life Science & Chemical Instrumentation,” “Laboratory Equipment,” and “Preclinical Outsourcing.”
- Decreases (or deceleration) in life science R&D funding may be disproportionately applied across R&D costs. It may be the case that spending on products and services tends to be more resistant to budgetary contractions than personnel, infrastructure, and other sources of cost. We do not believe this to be true, however, as much equipment and service spending is far easier to cut than staff or space.
In conclusion, we believe that it is very likely that life science growth rates are overstated in published reports, perhaps by as much as a factor of two. While we can’t be certain why such overestimates exist as we do not know how the studies were performed, we do know that they are not remotely in line with overall life science R&D growth rates and the discrepancy is very unlikely to be explained by other mitigating factors. The next time you use a commercially sold study to gauge growth rates, you may want to take them with a grain of salt and assume that they are an overestimate.
Remove Steps With Content
Carlton Hoyt
While we strongly advocate that many content marketers in the life sciences shift from a content paradigm to a resource paradigm, there are still ample roles for more traditional content to play. This is especially true in demand generation endeavors when content is being leveraged to fulfill a specific role in a buying journey. When using content to move prospects closer to making a sale, the most effective content removes steps from the customers’ buying journeys. It actually makes the journey shorter while influencing the customer in a way that favors your brand.
If you want to create content that moves your scientist-customers forward in their buying journeys, you need to know where you’re starting, where they’ll finish, and not try to take a larger step than your content is able. To create great content that can help shorten a buying journey and direct customers in your favor, follow these 4 planning steps before actually putting pen to paper.
1) Map the buying journey.
You can’t effectively influence customers to progress in their buying journeys unless you understand the nature and the steps within those buying journeys. There is no shortcut to this – you need to talk to the customers. When doing so, it’s important to get feedback from a broad range of customers. In addition to simply speaking with different demographics (for instance, customers in different market sectors or those with varying seniority), it’s important to speak with those whose buying journeys have ended differently. Talk to your own customers, those who have made purchases of alternate or similar solutions, those currently involved in a purchasing decision, and some who have exited a buying journey without making a purchase. It’s important to understand all of the paths these journeys took and the factors that led to their ultimate decision.
Remember: a buying journey is not a line. It is a roadmap, where there are multiple routes from the start to the destination, and you want to understand those various routes as much as possible. Mapping the buying journey is something that will be useful well beyond content planning, so it’s a good thing to do regardless. For instance, a map of the customers’ buying journey is invaluable when designing campaigns. It’s not a simple or fast process, but it’s well worth the effort.
2) Pick a step to remove.
Once you understand the “routes” the buying journey may take, you can decide which step you want to remove. To be broadly effective and achieve the best ROI, this should be a step that is on many of the routes and is not presently being addressed well. It should also not be too large of a step, as there is a practical limitation to how much of the buying journey you can bypass with content.
3) Determine why that step exists.
The step you’re trying to remove is there for a reason. The scientist-customer may be trying to understand something, or seeking a particular experience, or looking to verify a specific belief. Unless you know exactly what they’re trying to do, you can’t design content to bypass that step.
In many cases you may be able to use your own best judgment to understand why a step in the buying journey exists, and in others you may want to speak to the target market. The more effort you put into this process the more likely you’ll end up with a correct answer, but the effort needs to be proportional to the effort required to actually create the content. Otherwise, you’d be just as well off taking the “shotgun” approach, designing a few different pieces of content, and A/B testing.
However, to know how much effort you would need to design the content, step 3 needs to overlap with step 4…
4) Determine the best way to bypass the step.
Churning out white papers is only going to get you so far, and there are a lot of steps in the buying journey that can only be effectively skipped by richer content. If your audience seeks only information, there may be a wide variety of content formats you can choose from. If your audience requires an experience, you may be required to use rich media.
The only way to use content to skip a step in the buying journey is to provide the audience with exactly what they are looking for. You can’t take a shortcut and expect to be effective.
There are far too many companies who use their content marketing programs haphazardly, as blog post and white paper factories. Those are wasted efforts. When creating content to generate demand, understand the buying journey, focus on a particular step, then design content to fulfill the needs of that step and get scientists past it. Only then will your content program achieve its potential.
Wide Nets Don’t Win
Carlton Hoyt
The fear of loss is stronger than the desire for gain.
This is a scientific fact. Here’s the first paper that describes it, but there are a lot more which confirm it. It’s known as loss aversion, and it makes both us and our customers irrational.
Loss aversion is, for instance, why challenger marketing works so well. Lots of companies talk about benefits – what customers have to gain by using your product or service – but customers respond better if you can convince them that the way they are currently doing things is wrong. Tell them that they are currently experiencing loss and they’ll more likely act in your favor. (Don’t just take it from me – you can ask the Corporate Executive Board.)
Challenger marketing is underutilized, however. Why? Simple. Loss aversion. Most marketers are scared of being negative. They think – without any proof to support it – that communicating a thought which could be perceived as negative will turn customers off and cause a blowback on their brands. They are afraid of making people upset more than they desire gains. This persists and directs action even in spite of evidence that being negative at times can provide positive results.
An even more critical and fundamental area where loss aversion cripples marketers is in positioning. Marketers, and the corporate honchos that preside over them, love to cast wide nets. They just love to pretend that everyone is a potential customer. When that becomes the default scenario, we find ourselves in a dangerous position. Loss aversion makes us scared to cut out pieces of the market, that’s not what makes positioning an effective tool. Wide nets don’t win.
Positioning is about defining who is and who isn’t a target customer. We want to maximize the chance that weâre going to close opportunities. We do that not by casting the widest net, but by resonating with those our net is designed to catch. Those are the people we should want to sell to – not the masses who will suck up our marketing dollars and sales efforts but have little chance of converting. That requires putting your loss aversion aside and cutting out your true piece of the market – that which you are realistically and effectively able to capture.
Loss aversion is a powerful tool for marketers, but the same thing that makes it so useful can be harmful when it manifests in ourselves. Don’t just understand the psychology of your scientist-customers, but understand your own psychology as well. You’ll make better decisions as a result.
Remarketing by the Numbers
Carlton Hoyt
We recently cited some newly released findings from the Boston Consulting Group (BCG) stating that “display retargeting from paid search ads can deliver a 40 percent reduction in CPA.” It was met with some hesitation from Mariano GuzmĂĄn of Laboratorios Conda, who stated:
“[…] when I have clicked on a [life science website] what I have experienced is a tremendous amount of retargeting for 1 month that I have not liked at all as an internet user, and I do not feel my clients would as well”
Being me, I like to answer questions with facts as much as possible, so I dug some up. This one’s for you, Mariano!
To directly address Mariano’s concern, I found some studies on people’s opinions on retargeting. A 2012 Pew Research Study found that 68% of people are “not okay with it” due to behavior tracking while 28% are “okay with it” because of more relevant ads and information (4% had no opinion). I’m a little skeptical of the Pew study because they were priming the audience with reasons to “be okay” or “not be okay” with remarketing. In a sense, these people are choosing between behavior tracking + more relevant ads vs. no behavior tracking + less relevant ads. However, when users actually see the ads the ads don’t say to the viewer “by the way, we’re tracking your behavior.” Are some users aware of this? Certainly. Might some think it consciously? On occasion, sure, but nowhere near 100% of the time. However, 100% of the Pew study respondents were aware of it.
A slightly more recent 2013 study commissioned by Androit Digital and performed by Toluna asked the qusestion in a much more neutral manner (see page three of the linked-to study). They found that 30% have a positive impression about a brand for which they see retargeting ads, only 11% have a negative impression, and 59% have a neutral impression.
The Pew study and the Androit Digital study did agree on one thing – remarketing ads get noticed. In both, almost 60% of respondents noticed ads that were related to previous sites visited or products viewed.
Now to the undeniably positive side… The gains a company stands to make from remarketing.
In addition to the 40% reduction in cost per action cited in the aforementioned BCG study, a 2014 report from BCG entitled “Adding Data, Boosting Impact: Improving Engagement and Performance in Digital Advertising” found that retargeting improves overall CPC by 10%.
A 2010 comScore study evaluated the change in branded search queries for different types of digital advertising and found retargeting had provided the largest increase: 1046%.
In a 2011 Wall Street Journal article, Sucharita Mulpuru, an analyst at Forrester Research, stated that retail conversion rates are 3% on PCs and 4% to 5% on tablets. According to the National Retail Federation, 8% of customers will return to make a purchase on their own. Retargeting increases that number more than three-fold, to 26%.
There are many more studies that sing the praises of remarketing, however I wanted to stay away from case studies that investigate only single companies as well as data collected and presented by advertising service providers.
Here are my thoughts on the matter: Do some customers view retargeting unfavorably? Certainly, but that’s the nature of advertising. No matter what form it takes, some people will object to it. Considering that there is nothing ethically wrong with retargeting, we can’t give up on something that is proven to be a highly effective tactic because some people have an objection to it. In the end, it’s our job as marketers to help create success for the organizations we serve.
