Motivating Your Distributors
Carlton Hoyt
Last week, we discussed how the key to a distributor successfully selling a given product line (from the supplier’s standpoint) is how motivated they are to carry, promote, and sell the line. There is simply no substitute for effort. The responsibility for maintaining the motivation to put in that effort, however does not fall solely on the distributor. As we mentioned last week: “The effort that distributors will give to a product line is not solely dependent on the distributors themselves; the supplier’s distributor manager is responsible for keeping the distributors motivated as well.” So, what can (and should) a manufacturer do to help motivate their distributors and keep them selling?
Of course, this question has some obvious answers such as price / discount rates, exclusivity, etc., but it’s the less obvious answers, and therefore the less commonly diagnosed and remedied problems, which we are interested in.
Previously we discussed how distributors should play a role in executing suppliers’ marketing strategies but suppliers should not shift too much marketing responsibility to distributors. By treating marketing as a collaborative effort between supplier and distributor, you are actually creating an excellent opportunity to improve distributor motivation over a long time frame. By providing marketing support to your distributors you will both achieve more holistic and better integrated marketing campaigns and also demonstrate that you are committed to the success of your distributors.
Another often overlooked tool for motivating your distributors is fostering relationships between them. Highlighting the success of some distributors will demonstrate that distributors can successfully sell your products, and creating and fostering channels of communication between them will help them learn from each other, increasing the effectiveness of your entire distribution network.
The implementation of a system to enable and foster easy collaboration on both of these levels does not need to be time consuming nor expensive. While there is existing channel management software, it often focuses too much on the supplier-distributor relationship and not sufficiently on fostering communication between distributors. So long as you do not require that a system to manage this process is integrated with many other enterprise systems, an effective solution can be constructed relatively inexpensively using mostly free, open-source tools.
Life science tools manufacturers need to take an active role in fostering the success of their distribution networks; “set it and forget it” type strategies are very rarely effective. Improving distributor performance does not need to be difficult, but it is the distributor manager’s job to ensure that the distributors stay motivated. By enhancing collaboration and communication with distributors, suppliers are investing in their distributors’ long term success while helping to ensure their own.
Qualities in a Distributor
Carlton Hoyt
We find that life science companies have very different ideas of what qualities are most important when looking to partner with a distributor. Some focus on the size of the sales force, some focus on technical / scientific expertise, some focus on complementary products (or lack of competing products) in the distributor’s product offerings, some focus on the extent to which a distributor has existing customers that would fall into the supplier’s target market … the list goes on. All of these focuses are reasonable and should be given focus, but I would argue that they overlook the most important quality that any distributor could demonstrate: the desire to sell your product and the willingness to put in the effort to properly promote it.
I should mention that this doesn’t apply to situations where you’re using distributors solely or primarily for local fulfillment capabilities. In those situations there is very little effort required by the distributor as you’re not relying on them for marketing or sales. They just warehouse the products, ship orders and collect payment. I also don’t mean to play down the importance of qualities which, in certain situations, may be a hard requirement; an example of this may be repair and / or maintenance capabilities for certain kinds of instruments.
That said, the importance of the willingness to sell your product cannot be understated. In most circumstances, a distributor which is otherwise a poor match – one that does not have the right scientific expertise, does not sell complementary products, and does not have a large sales force or existing customer base – but which has a strong desire to sell your product and puts in the effort to do so will sell more than a distributor who looks like a perfect match on the surface but does not prioritize your product and puts in little effort. I have witnessed one-person distributors who had practically no existing customer base outsell far larger and more established companies which have over 20 outside salespeople. This kind of performance is admittedly the exception, but it illustrates the value of desire and effort. Of course, a distributor that demonstrates a genuine willingness to put effort into promoting and selling your product and also is a good match in all of the other important ways would be ideal, but such ideal matches rarely occur.
Determining the level of effort that a distributor will put into promoting and selling your product line is very difficult to do in advance. It is most often ineffective to directly ask how much effort a distributor will put in, as most will either exaggerate in an effort to impress the supplier or will not want to verbally commit to any particular courses of action. Responsibilities should be discussed in advance of an agreement and this will help, but expected levels of effort are rarely written into distribution agreements and are almost never binding. Discussions must be had which allow the supplier to gauge the interest of the distributor indirectly, as these discussions will be more telling than asking directly.
The effort that distributors will give to a product line is not solely dependent on the distributors themselves; the supplier’s distributor manager is responsible for keeping the distributors motivated as well.
When recruiting distributors, identifying distributors who will place an appropriate effort into the promotion and sales of your products is invaluable. More than any other distributor quality, the effort put forth by the distributor will determine the level of success your products will have in a particular geography.
Social Media Optimization
Carlton Hoyt
A lot of life science companies create social media accounts for the wrong reasons. Some do it strictly for demand generation (bad idea – scientific products are not impulse buys), some do it because they feel like they should, and some do it because they have some unrealistic expectation that social will make them the next big thing (not to ruin your dream, but your chances of your content – whatever it may be – going viral are very slim). While we’ve always been proponents of social media marketing so long as expectations are realistic and the focus is on brand-building, there is an increasingly important reason to engage in social media: SEO.
As search engines, and in particular Google, have aimed to find ways to improve search results, they are effectively crowdsourcing their rankings by relying more heavily on social media. In what I believe to be a clear indicator of the increasing importance of social media in SEO, a recently released study by SearchMetrics correlated 44 factors to Google Rank and found that social signals correlate with Google rank better than any other type of factor. In fact, the seven social factors investigated all ranked in the top eight Spearman Correlation scores. Keeping in mind that the SearchMetrics study is a correlation study and not a causation study, due to the complexity and opacity of search engine algorithms, determination of causation in search engine rankings is effectively impossible so correlation is as good a measure as we’re going to get. Despite that Matt Cutts himself stated in an interview that “Links are still the best way that we’ve found to discover [how relevant something is]”, there is little doubt that social has become very important in search engine rankings and will continue to become more important in the future.
Does this mean every company should be active in social media? Certainly not. First of all, SEO itself is not important to every company (although it is important to most) so jumping on the social media bandwagon isn’t necessarily important even within this context. Secondly, you have to have the resources and dedication to do it right. Having an unused, abandoned or spammy social account, or even one simply devoid of meaningful content, can hurt your brand. Social media is mostly about content, so if you don’t have anything of value to say then don’t bother. This isn’t to say that you need to devote large amounts of resources to social media.
If you do want to engage in social media for SEO (or “social media optimization”), the rules to follow are mostly the same as for social media in general but with a few exceptions. Most notably, while you can help build your brand by sharing the content of others, social media optimization is much more effective when you post your own content as the ultimate target of the social sharing will be your own site. You will need at least a partial focus on content creation.
Search marketing is arguably the most powerful tool for most life science companies to generate demand, and search engine optimization is a key part of that. In the rapidly evolving search engine algorithms, social media is playing an increasingly important role. Companies relying on search to generate demand should be looking to social media optimization to make sure that they can get to the top of the rankings and stay there.
Intent to Purchase
Carlton Hoyt
We’re avid fans of search marketing for demand generation-focused campaigns (both search engine marketing and search engine optimization). Even as other platforms begin to offer enhanced levels of targeting to match the capabilities of search engine marketing, and even in situations where one can identify specific customers (through data mining, for instance), we believe that for most life science companies SEM & SEO offers superior value for demand generation. Why? When properly targeted, searchers have the greatest amount of commercial intent. In other words, they are more likely to be looking for information to help them make a purchase than are scientists targeted via other channels.
As a bit of a case study, I’ll use a recent scenario. I was discussing marketing with the owner of a small life science company who does a reasonable amount of sales through e-commerce. He was complaining about the cost of CPC advertising on Google AdWords. The company does a lot of blogging, and the blogs were disseminated quite broadly to many large life science-focused groups on LinkedIn. He bragged that the traffic resulting from blogging was extremely inexpensive (the effective CPC was probably 5% – 10% of the CPC through AdWords), the unique viewers per month was very high for a company of its size and traffic was still increasing at a good clip (most traffic was a result of the blog). Sales, however, weren’t where he felt they should be.
This case illustrates two points. 1) unique visitors is a vanity metric – it doesn’t mean anything unless you can convert those visitors to sales at a satisfactory rate. 2) Not all marketing channels will produce viewers with the same commercial intent. In fact, the intent to make a purchase can vary wildly across channels. Simply reaching your target market with just about any message is usually good for the purpose of awareness (although awareness is useless if the audience doesn’t have a reason to remember you and you don’t regularly re-engage them) but for demand generation you need to reach the audiences that have the intent to purchase a product, and specifically a product such as yours. Targeting anyone in your target market often doesn’t do the trick, especially if your target market isn’t extremely well defined.
If you think about what customers do when they are considering a purchase, it makes sense that search is the medium of choice for demand generation campaigns. They either a) have a brand in mind already and go directly to that brand, eschewing shopping around, b) ask a colleague for a recommendation or c) look for information through search engines. These three behaviors encompass almost every scientist when considering a purchase. There is only one of those things that you can have a significant effect on in the short-term and that is making sure you show up where they search. You can try to create a positive and memorable overall brand experience to influence the brand preferences of the scientist and his / her colleagues, but that isn’t something that can be done over the short term and often requires that customers have a significant degree of experience with your company in the first place (hence why attempts to generate demand via brand-building alone are something of a catch-22).
Small life science companies often don’t have the finances or time to wait around for campaigns to pay off in the long-term. Most need to see an ROI in the short-term to stay afloat. To generate those shorter-term revenues your campaigns need to focus on the places where you can target not just your target market, but the members of your target market with commercial intent.
Speak with the Customers
Carlton Hoyt
Life science companies rarely speak with their customers as often or as deeply as they should. You can make the common excuse about scientists being distant and antisocial (which I would like to go on record as saying is complete nonsense) but many companies actually start out being good at speaking with customers but then lose that trait as they grow. Why? Simple – taking the time to speak with customers isn’t something that’s easily scalable. It’s easy to view large amount of customer interaction as unnecessary and cut it in the name of efficiency. Or a company might just become large enough that it makes a lot of financial sense to automate the heck out of everything. While marketing automation and customer relationship management automation are very powerful tools that we strongly advocate, they should not displace real conversations with your scientist-customers, for a number of reasons.
1) Customers love good support.
Nothing says “we don’t care about you” like a robotic confirmation email sent from a DO-NOT-REPLY email address. While you can still do better without actually speaking with the customers, your customers will appreciate getting an email from a real person (or at least what looks to be an email from a real person) with the ability to reply to that person and ultimately get a response. It shows that you care enough to give them some of your time, if they want it. And while some customers may abuse the privilege, most will not and it gives you the opportunity to create a lot of goodwill. It’s great for your brand and great for customer-retention.
Of course, you don’t need to wait until after the sale to have a conversation or to demonstrate great support (but we’ll address that in a minute).
2) You WILL learn things.
Want feedback on your product? Want MORE and BETTER feedback? Want to learn what the customer is thinking when they’re contemplating a purchase or perusing your website? You could fire off an email asking them to take a survey to try to win an iPod, and that might be useful if you’re dying for quantitative data to perform some large-scale analysis, but in most situations you’ll be better served and you’ll almost always get a better response from just striking up a conversation. Have an actual person type an email to a few people who bought your product three months ago and ask how things are going. I’m sure most of you would be genuinely interested in how the customer feels about your product, so let that interest shine through. Show them that you have an interest in them and you care about what they think and how things are working out.
Of course, you don’t need to wait until after the sale to have a conversation and learn about your audience (almost there…)
3) It can be great for conversion.
You know those live chat boxes that you occasionally see popping up asking if you want to chat with a representative? Or the popup-like “lightbox” that appears after you’ve been on a website for 10 seconds where you’re asked if you’ll take a 4-minute survey? Those both seem pretty silly and useless and they often are, however their failure is more due to design than their intention. Customers will speak with you during their buying journey, and you can effectively prompt them to do so on your website (or just about anywhere else). Whether you’re making use of live chat or simply encouraging users to call or email, try to start a conversation as early as possible without being forceful or gimmicky about it. Not only will you help your conversion by answering questions and helping to simplify the customer’s buying journey, but you’ll also learn a lot about how they make their buying decisions and demonstrate good support all at the same time.
It’s very easy to get out of the habit of having meaningful conversations with customers. By ensuring that you take the time to speak with the customers you’ll be doing a valuable service to your company and helping your scientist-customers at the same time. There’s simply no substitute for real conversations.
Differentiating Services
Carlton Hoyt
Some types of offerings can be especially difficult for life science companies to effectively market. Services, in particular, seem to cause companies problems. Services are intangible. Many services are customized and lack a fixed set of features. Because of this, marketers need to be especially careful or else marketing messages can quickly become uncompelling. While the default differentiators for products are their features, services often cannot be defined in such a way. In the hands of a novice marketer, this often causes the message to devolve into little other than benefit claims. The lack of anything tangible causes many companies to give up message validation almost in its entirety. Messages often revolve around the vague and facile claims of a company being “experienced,” “knowledgeable” or “leading” and its services being “valuable” and “effective,” among other claims which offer no comparative advantage and are largely meaningless to a skeptical audience.
So how does one effectively market a service-based life science business? Like any other offering, it starts with a meaningful differentiation. Since the differentiation won’t lie in anything tangible, we need to look at things such as processes, specialization or people along with more obvious things such as proprietary intellectual property. Attribute analyses can be important in helping to identify positioning opportunities, but there will ultimately be a limited amount of meaningful attributes which the scientist-customers truly care about. The life science marketer must ensure that any value propositions are extensively validated to combat the inherent ambiguity (and therefore increased utility risk) of the intangible service. Every time you make a claim, think about how you could best substantiate that claim, then do it. Standard tools such as case studies and testimonials help as well, but more direct validation techniques should be used when possible and applicable. As always, educational content should be a core component of your marketing. In order to trust you to perform a service for them, the scientist-customer will have to accept that you have the requisite knowledge and experience. Unless your brand is very well known to the customer, you should display your knowledge through educational content.
Service companies often have difficult time differentiating their services and validating their messages, and sub-par demand generation is often a direct result of this. By focusing on differentiators and strong validation of claims to reduce the perceived risk in purchasing the service, life science service companies can greatly improve their rate of lead generation.
Succeeding at Conferences
Carlton Hoyt
We’re no stranger to scientific conferences, myself especially. I’ve attended scientific conferences on all sides – as a scientist, as an exhibitor, and as a business developer targeting the exhibitors. From all this experience, I am certain that one thing, above all else, will determine your level of success if you are at a conference for sales or marketing purposes. This one thing will sound simple. It will sound obvious. But look around at the next conference you attend and see how many people aren’t doing this one thing. So… What is the “magic bullet” for conference success?
Speak with everyone you can.
A conference is a numbers game. There are a fixed amount of scientists at any given conference who will be within your target market. The more people you speak with, the more of those scientists that you’ll identify, and the more leads you’ll generate.
It doesn’t matter how pretty your booth is. You could have a massive, open, wildly elaborate booth or just a table in front of a curtain. Those elaborate, expensive booths don’t do much more to reel scientists in than a large bag of candy dumped into a bowl. All you need is to capture enough of their attention to be able to gracefully say hello and ask them what they work on.
Being successful at a scientific conference really is that simple, yet at least three quarters of the company representatives at the average conference fail to come close to being as successful as they could be because they neglect to be outgoing. If you, or someone in your company, is going to be exhibiting at a conference, be sure to take to heart that one key element for a successful conference: speak with everyone you can.
When Search Ads Don’t Work Pt.2
Carlton Hoyt
About a month and a half ago we wrote an article about times when search advertising isn’t worthwhile, focusing on the results of a study by eBay Research Labs. However, that study highlights just two specific instances when search advertising isn’t profitable; there are many more instances when search advertising would not be able to play an effective role in demand generation for life science marketers, and we discuss these here.
The most obvious example is when your product isn’t simply something that scientists aren’t looking for. This is most common with services and software, but sometimes occurs with other products as well, especially those which are non-essential to life science research. You can attempt to expand your targeting to include ancillary terms (for example, if you manufacture an accessory to a product then you might advertise for the terms related to the main product). However, this often leads to a low clickthrough rate, which both increases cost-per-click and decreases the frequency that your ads will be shown, which may lead to lackluster campaign performance. Additionally, if search volume for a given term is too low, most SEM platforms (AdWords, Bing Ads, etc.) simply won’t show any ads.
Another example is when the people doing the searching aren’t the people you need to sell to. For example, in the situation of suppliers of very high-end equipment, most of the search traffic may come from lab techs but the decision-makers may be director-level individuals. It may be that this ultimately doesn’t matter – it may still be worthwhile to advertise even if only 1 out of 100 clicks is relevant – but this can dramatically increase the cost per conversion, which is a much more meaningful metric by which to measure ROI.
Chemical / biochemical companies often face a unique problem with search marketing. Depending on the substances they sell, they need to take care to not be flagged as an “online pharmacy” by ad platforms, which can result in account suspension.
Additionally, for low-cost items it is often the case that search engine marketing isn’t profitable on the initial sale, especially for distributors and for manufacturers of lower-value products who often operate on fairly thin margins to begin with. In order for SEM to have a good return in these situations, it is imperative that life science suppliers continue to re-engage with customers in order to drive repeat sales.
As we said previously, search engine marketing is a fantastic tool and can work wonders for lead generation but we should not blindly expect results from it. Regardless of the situation, SEM should be carefully monitored and coupled with appropriate analytics and CRM such that results can be measured, informed decisions can be made, and campaigns can be improved over time.
Single-Page Websites & SEO
Carlton Hoyt
One of the newer trends in website design, which has actually existed for quite a while but is just now becoming more popular and easy to implement, are single-page websites where the content is accessed via anchor links which trigger dynamic scrolling. (In case you’re not sure what I’m talking about you can find a whole website of examples here.) While single-page design can add a lot of character to a life science website and be visually captivating without sacrificing user flow, a single page website almost always sacrifices SEO.
The reason is quite simple: Fewer pages means fewer URLs, fewer page titles, and fewer high-on-page header tags. Google Webmaster Trends Analyst John Muller explained on the Google Webmaster Central forum:
Quote from Google Webmaster Trends Analyst John Muller
I’d generally recommend a more traditional site format. It’s complicated for search engines to understand a “one-page” site like that, given that there is so much information on a single page. It’s much easier for our algorithms to focus on individual pages with content that matches the same context. Additionally […], it could be extremely confusing to the user to see basically an empty page when they expect to find content based on a search that they’ve made.
John raises another excellent search-related point that addresses a UX flaw in single-page websites. Even if you do manage to optimize for content that is farther down the page, Google doesn’t index anchor links. Therefore, the search results could indicate the page being relevant to the search due to content well below the fold, but a user who clicks the link will land at the top of the page and not at the relevant content.
Does this mean you can’t use all those nifty scrolling effects on your site? Not at all. It’s possible to use the same type of single-page design and the same effects while still having multiple pages – for example by using a static nav bar header with “real” links as opposed to anchor links but making on-page content accessible via anchor tangs with dynamic scrolling. Another solution is to use landing pages to target additional keywords then link back into the dynamically scrolling page(s) – or just capture leads right on the page by leveraging more highly targeted content, which is the purpose of most landing pages. Landing pages are generally not well cross-linked with other site content and are outside the normal site hierarchical structure, however, and therefore often require additional off-site SEO effort to achieve a high rank for competitive terms.
Ultimately, if you want scientists to be able to easily find your products via search engines, it’s probably best to have a traditional site format.
Find Positioning Opportunities
Carlton Hoyt
Your life science company could have a stellar new product or a unique new service. It could be wonderfully differentiated and offer your customers a unique value. If you fail to effectively communicate that differentiation and value, however, than your marketing is still going to flop.
As we’ve discussed before, life science marketers often resort to facile claims to describe their products, and in most cases that not only leads to messages that are devoid of real meaning but also leads to messages that are not unique or differentiated. Even when meaningful claims are made, competing products / services tend to describe themselves in the same ways, using similar attributes. Your product may be differentiated, but if your messages are largely the same then how can scientists tell that your product is better than the competition? They can’t, which is why it is so important to not only differentiate your product, but convey a unique positioning in your marketing message as well.
One of the best and easiest ways to make sure that your positioning and value claims are unique is to perform an attribute analysis. An attribute analysis is a market research technique that determines how competing products / services are outwardly positioned* by looking at their marketing communications and seeing how they are defined.
To perform an attribute analysis, first list all the competing products or services and collect references which you will use for the attribute analysis. Webpages and pdf brochures are generally the best options in terms of content and accessibility, however product manuals and other more technical documentation may be used, as may marketing materials that are generally less accessible such as webinars or email blasts. Have at least two references for each product whenever possible, although more is better. Secondly, collect all the attributes that are used for each product. Note that attributes should be counted – you want to know how many times each attribute is used rather than simply if it is used. Attributes can include descriptive terms, features and specifications. The list of attributes can easily become larger than is valuable, so basketing similar terms is recommended (for a basic example, “fast” “rapid” and “quickly” could all be basketed under one attribute, and you could assign ranges for specifications such as “read lengths between 200 and 300 base pairs”) as is ignoring unimportant specifications or features (example: for many products, few people may care about weight). Once attributes are counted, you can group them into categories as well. You then have laid out in front of you a numeric map (or a visual map, if you plot the attributes) of the positioning of competing products and services. The data can be analyzed in various ways.
Having performed the attribute analysis, you will be able to see what claims are commonly used and which are uncommonly used. You can combined this with market knowledge of scientist needs to find positioning opportunities; positions that align with customer needs but which are not used by competitors.
*I use the term “outwardly positioned” because many companies do not have their positioning formalized or do not effectively translate their positioning into effective marketing messages. This erroneously leads to different outward and inward positions, where the company believes the product has a certain positioning but the positioning communicated through its marketing is different. You could also call these externally-facing and internally-facing positions.