Personalization Can Backfire
Carlton Hoyt
Marketers are used to seeing a lot of data showing that improving personalization leads to improved demand generation. The more you tailor your message to the customer, the more relevant that message will be and the more likely the customer will choose your solution. Sounds reasonable, right?
In most cases personalization is great, but what those aforementioned studies and all the “10,000-foot view” data misses is that there are a subset of customers for whom personalization doesn’t help. There are times when personalization can actually hurt you.
When Personalization Backfires
Stressing the points which are most important to an individual works great … when that individual has sole responsibility for the purchasing decision. For large or complex purchases, however, that is often not the case. When different individuals involved in a purchasing decision have different priorities and are receiving different messages tailored to their individual needs, personalization can act as a catalyst for divergence within the group, leading different members to reinforce their own needs and prevent consensus-building.
Marketers are poor at addressing the problems in group purchasing. A CEB study of 5000 B2B purchasers found that the likelihood of any purchase being made decreases dramatically as the size of the group making the decision increases; from an 81% likelihood of purchase for an individual, to just 31% for a group of six.
For group purchases, marketers need to focus less on personalization and more on creating consensus.
Building Consensus for Group Purchases
Personalization reinforces each individual’s perspective. In order to more effectively sell to groups, marketers need to reinforce shared perspectives of the problem and the solution. Highlight areas of common agreement. Use common language. Develop learning experiences which are relevant to the entire group and can be shared among them.
Personalization focuses on convincing individuals that your solution is the best. In order to better build consensus, equip individuals with the tools and information they need to provide perspective about the problem to their group. While most marketers spend their time pushing their solution, the CEB found that the sticking point in most groups is agreeing upon the nature of the solution that should be sought. By providing individuals within the groups who may favor your solution with the ability to frame the nature of the problem to others in their group, you’ll help those who have a nascent desire to advocate for you advocates get past this sticking point and guide the group to be receptive of your type of solution. Having helped them clear that critical barrier, you’ll be better positioned for the fight against solely your direct competitors.
Winning a sale requires more than just understanding the individual. We’ve been trained to believe that personalization is universally good, but that doesn’t align with reality. For group decisions, ensure your marketing isn’t reinforcing the individual, but rather building consensus within the group. Only then can you be reliably successful at not only overcoming competing companies, but overcoming the greatest alternative of all: a decision not to purchase anything.
The Plight of the Distributor
Carlton Hoyt
Let’s be frank: if you are a laboratory products distributor, you have a ton of competition. With inexpensive digital marketing at anyone’s fingertips and drop-shipping increasing in prevalence, it’s incredibly easy for almost anyone to start a distribution company with little up-front investment. As the laws of economics would predict, if something is cheap and easy, lots of people will try to do it.
That doesn’t mean it’s easy to succeed, however. In fact, it may be more difficult than ever.
The Value Squeeze
There are way too many distributors out there and differentiation is hard to come by. Distributors are facing increasing pricing pressure, and while it is certainly in part due to heightened competition and simultaneous tepid growth in research budgets, eroding margins also have a much more fundamental reason.
As a whole, distributors simply don’t add as much value as they once did.
Information used to be time consuming to find, and often difficult or impossible to find. Distributors were once viewed as a critical source of knowledge on various equipment. Today, for many purchases, it’s very easy for scientists to obtain the large majority of the information they need on their own. Doing so is often significantly easier for the scientists than subjecting themselves to a sales rep. We see evidence of this in the increasing delay of when customers are contacting suppliers within their buying journeys. The value of distributors to customers has eroded.
Geography used to be a massive barrier to the flow of information, and a local distributor was critical to allow customers to even know a product existed. Today, according to BioBM’s own research, 100% of users perform an internet search at some point in a buying journey (unless their goal is only to purchase a known product from a specific brand). Any company anywhere in the world can get in front of that customer with a simple search ad which costs all of a few dollars. Email can connect any two people in the whole world. Even product demonstrations are becoming increasingly virtual. The result: the value of distributors to suppliers has eroded as well.
The Four Models for Successful Distributors
The old rules are no longer relevant. Being a distributor in today’s business environment means assuming a particular role and providing a particular value. As such, there are a limited but highly defined number of business models which can reliably provide long-term success to both new entrants and incumbents alike.
- The Price Competitor. The Price Competitor attempts to be as visible as possible for people who are looking for a specific product, offer as many products as possible, and offer them at the lowest price. They seek the value buyers – people who know exactly what they want and only want the best price – and provide value to those customers by sacrificing margins to provide discounts. Their advertising is minimal but effective, as their razor thin margins simply don’t allow much else. They generally will deflect as much of the responsibility for support back to the manufacturers as they don’t want to spend the resources to do otherwise. For The Price Competitor, reducing cost as much as possible becomes almost a singular focus. The distributor who can obtain the best prices from their suppliers while operating on the lowest margins is most often the winner. The smart supplier, however, will avoid the price competitor, as they add little to no value to the supplier so long as the supplier’s list pricing is competitive
- The Exclusive Rep. The Exclusive Rep fills their product portfolio with unique items that they obtain exclusive rights to resell within their territory. Being beholden to their product lines, their success is often based on the products which they represent and their ability to maintain favored status with suppliers. To obtain their exclusivity, The Exclusive Rep will bear additional responsibility for developing the market in their territory, stock inventory, offer demos, or perform other services which are of value to the supplier. The additional value to the customer comes in the form of convenience – having someone local who knows the products well.
- The Relationship Builder. A difficult model for new entrants and one that is arguably the most endangered, The Relationship Builder relies on person-to-person relationships between their sales team and researchers. They rely heavily on an outside sales force. Acquisition of business is based on trust, extremely high levels of service, and loyalty. Because of this, they break the trend of the customer taking control of their buying journeys and instead customers may involve The Relationship Builder earlier and more directly. Relationship Builders used to be able to be effective in all types of sales, however due to easing access to information are presently most successful for complex purchases. These types of distributors add value to the supplier by having existing relationships with potential customers and add value to the customers by being a trusted source of information to aid them in their purchasing decisions.
- The Decision Engine. The Decision Engine provides a superior customer experience which makes the buying journey easier and more fulfilling for their customers. Their success is based on their ability to claim ownership of as much of the customers’ buying journeys as possible. They are adapting to a declining ability for salespeople to influence customers by providing the platform on which customers make their own decisions. The Decision Engine provides value to customers by enabling them to make purchasing decisions more quickly and easily, and provides value to suppliers by drawing in potential buyers.
Note that these business models are mutually exclusive. The price competitor generally does not have sufficient resources to take on any of the additional duties required by the other business models. The exclusive rep cannot be a decision engine due to lack of choice within each product category. The decision engine and the relationship builder have conflicting approaches to serving the needs of the customers’ buying journeys. The relationship builder will have a difficult time being seen as a trusted advisor if they are only promoting a single type of solution for each customer need, and therefore cannot reliably be an exclusive rep.
Lacking the ability to meaningfully differentiate aside from by their product offerings (and only the exclusive rep can reliably secure a differentiated product line), distributors must pick one of these business models and execute it better than the competition. That is the only mechanism to ensure success. Even then, the changing nature of scientists’ buying journeys puts business models themselves at risk.
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The Four Key Types of Content
Carlton Hoyt
There are a lot of reasons why content can fail to fulfill its objectives. When content fails, it usually just feels like “stuff” – things that are churned out more for the sake of having content than to serve a specific purpose. The most common reason for failure is lack of a coherent content strategy. Even when a strategy exists, however, content often fails because its role in the customer decision journey isn’t clear. In order for content to be maximally effective, it’s critical to understand the decision journey, the four main types of content, and what role each type of content needs to have within the decision journey.
The Four Types of Content
All content can be binned in one (or more) of four general categories:
- Educational Content. Educational content provides helpful information to the audience. It is strictly customer-centric. It can build brand value and awareness by helping customers build useful knowledge and solve problems. It is best aligned to early stages of the buying journey when the need is nascent and the customer may not even be aware of their need. Educational content often is used to make the customer aware that a need exists. For instance, a brochure highlighting problems with an industry-standard method would be educational content.
- Validational Content. Validational content serves to verify a belief that the customers hold or a claim that the brand is making. Exceptional validational content does so while still maintaining the customer as the core focus, but all validational content also has a strong focus on the brand or its offering(s). This is most useful when the customers have an established need and you want to guide them towards your solution. For instance, a performance comparison of multiple offerings from different vendors would be considered validational content.
- Promotional Content. Promotional content is used to prompt customers who are ready or nearly ready to make a decision into action. It is the most solution-centric type of content, and it often doesn’t look or feel like content as many content marketers would think of it. For instance, an email offering a discount would be promotional content. Most ads we see on TV are promotional content.
- Emotional Content. Unlike all the other forms of content, emotional content doesn’t seek to influence the customers’ perceptions of need, but rather seeks to connect with customers on a less tangible, emotional level, although it doesn’t need to be overtly emotional per se. Emotional content is used outside of the context of a purchase to influence customers’ brand preferences, and therefore position your brand to have an advantage in customers’ future buying journeys.
Content doesn’t need to fall into only one of these categories. For instance, validational content is often used in conjunction with promotional content in order to both prove a point and attempt to prompt a purchase. A hybrid of emotional and promotional content may be used to try to induce an impulse buy. Educational content is often used with emotional content to position a brand as a thought leader. Just about any type of content can be used with any other. You could even have all four in one.
Mapping Content Types to the Buying Journey
A fairly simple buying journey model would be one that starts at the consideration of a need, continues through the evaluation of a number of options to fill the need, ends in a purchase, then continues to a post-purchase period where the solution is experienced, affinity with the brand (or against the brand) is formed, and advocacy (or antagonism) may take place. The cycle then begins again at some point when a further need is realized. (For a more detailed discussion of customer journeys, I recommend reading “Competing on Customer Journeys” in HBR.)
In this model, educational content would span from before consideration, where it may be used to catalyze realization of a need, through the early evaluation phase, where it helps shape the customer’s understanding and perception of the need and influences the criteria by which potential solutions will be evaluated. Validational content should be deployed from the late consideration phase through the evaluation phase in order to reinforce the brand’s proposed solution. Promotional content should be leveraged late in the evaluation phase up to the point of purchase in order to induce the customer to initiate a purchase.
Emotional content, unlike all the other types of content, is not reliant on a place within a buying journey and does not seek to directly influence customers’ purchasing behavior. Instead, it exists to shape the customers’ perceptions of the brand, thereby putting the brand at an advantage due to conscious or subconscious preferences / biases in the brand’s favor. It can be deployed at any time.
A basic buying journey with the four types of content mapped to it.
Content requires many things to be successful. It needs to be differentiated and segmented. It needs to be organized and customer-centric. It needs to avoid falling into a pit of skepticism. The most fundamental of requirements when creating content, however, is the need to serve a specific purpose that aligns with specific goals for influencing customers’ purchasing behavior.
To be even more effective in your content marketing, keep an inventory of your content, and include in that inventory which of the four types of content each piece falls into and which stage of the buying journey it attempts to influence. That will help reveal holes in your content marketing program and allow you to spend your efforts on the areas of greatest need that will provide the largest returns.
BioBM has pioneered the next-generation of content marketing strategies in the life sciences, and our leading marketing thinking has been published by the American Marketing Association, Content Marketing Institute, and other prestigious associations. We donât stop at âbest practices,â and we go beyond simple content. We proactively identify new, unique ways of creating value for your audience then design superior customer experiences around those value opportunities. Provide meaningful value to your customers, and theyâll provide value to you. Itâs a virtuous cycle. Start yours."
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.