Leads 101: Part 2
Carlton Hoyt
This post is the second in a three-part series. Last week we discussed lead generation, and you can find that post here: https://biobm.com/2013/11/leads-101-part-1.
Responding to Inquiries
Unless you’re marketing and selling very high-value products to a relatively small audience, be it a niche market or a narrowly defined role, you’re probably relying fairly heavily on inbound marketing to drive lead generation. (If you’re not, you’re probably doing something wrong, such as relying too heavily on distributors to do your marketing for you.) Inbound leads go cold extraordinarily quickly, so it is critical to respond as soon as possible. A study published in Harvard Business Review study found that contacting potential customers within an hour of receiving a inquiry leads to a seven times higher qualification rate than contacting the an hour later and a 60 times higher qualification rate than waiting 24 hours or longer. To state this another way, waiting a day to get around to your inquiries could cost you over 98% of your leads.
So how can we reduce response time and thereby maximize conversion? A Velocify study asked just that question, and the answer was quite clear. 1) Automate your lead distribution to your sales force, 2) “push” your leads to your sales force rather than having them “pull” leads, and 3) send leads out in a “shotgun” fashion – send each lead out to multiple reps and allow the fastest to respond. Companies that did these three things were shown to have a downstream conversion rate 107% higher than those companies that handled their leads manually.
I didn’t imagine I would need to say this until I read about a study on the matter, but don’t forget to contact the people that place inquiries. You might imagine this should be obvious, yet a study of lead response behavior conducted by InsideSales.com which included data from 696 companies showed that 36% of inquiries placed through an online form were not responded to within two weeks! There’s simply no excuse for letter your leads slip through the cracks.
Remember that not every lead requires a response, however. For example, if a prospect is requesting a piece of content then depending on the nature of that content and the prospect’s past behavior it may not be helpful to contact the prospect personally, at least not if you’re delivering the content automatically. Likewise, if a lead is disqualified due to being well outside your target market, then courtesy aside, there is little value in a response. This brings us to our next topic of lead scoring, which we’ll discuss next week.
Leads 101: Part 1
Carlton Hoyt
Everyone wants more sales. Everyone wants more demand. Sales can’t come from nowhere and demand has to be realized somehow, and the way we marketers help generate sales and realize demand is, largely, through generating leads. According to a recent Webmarketing123 study, the top objective and the top challenge for B2B marketers (or at least digital B2B marketers) is generating leads. Lead generation has even become more of a focus in content marketing – something which has traditionally been more of a branding activity than a demand generation activity. With how central leads are to most marketers’ missions, I wanted to take a moment to reflect on leads in the life sciences as well as go over some of the myriad information out there and what it means for our industry – for marketers of life science tools and services.
Lead Generation
Let’s start at the top! Lead generation first requires an understanding of how much a lead is worth. Unless you can estimate the value of a standard lead, you won’t be able to determine what is an appropriate amount to spend on generating each lead. Assuming that all leads are created equal (they’re not, but we’ll say so for sake of simplicity) you can approximate the value of a lead by calculating the net present value of your average customer and multiplying by your conversion rate. If this number is very small, you’ll likely want to minimize the cost of lead acquisition. On the other hand if this number is extremely large, it will likely be worth spending more per lead to generate more leads – at least to a point.
Regardless of the value of the customer, the buying journey will be the critical factor in determining how to generate leads for your product or service. Based on the informational needs of the customer during this journey, which can be gathered through market research and validated through testing and analytics, you should be able to create a content roadmap which informs the campaign architecture and directs content creation efforts in support of lead generation.
In most circumstances, lead generation in the life sciences should be supported heavily by scientific content with a low barrier; for example, a white paper that requires only an email address to download. This is especially true if you have any kind of marketing automation in place, since the cost of a nurture campaign for low-quality leads can be incredibly small. The reason content is so important is to establish trust and, thereby, reduce perceived risk. Scientists are trained to be skeptical and will not readily accept the claims in your marketing as fact. Content helps overcome this through educating the audience on your technology, demonstrating your expertise, etc. This provides more confidence that your products / services will fulfill their need, thereby reducing perceived risk and increasing perceived value (a less risky purchase is a more valuable one), making it more likely that a scientist will buy. Additionally, downloading a piece of content in exchange for a small amount of personal information is a far lower barrier than placing an inquiry about a product and thereby requesting a sales call. For all but low-value products, these baby steps towards purchase are often necessary.
Keep in mind that contact forms greatly effect lead generation as well. Each additional field in a contact form leads to approximately a 12.5% decrease in form submissions. Keep forms as short as possible and also make sure they’re accessible without being in the way. You want prospects to be able to contact you easily at any time without feeling that you’re trying to push them into contacting you.
Of course, content and contact forms are all components of inbound lead generation. Inbound methods are great if scientists are looking for what you are selling. If not, you probably need to get your hands dirty and go and create your own leads. This can be done at conferences, via cold calling / cold emailing, or with good old-fashioned advertising. If you’ll be trying to generate leads at conferences, or even just fill up your database with prospect for downstream marketing, remember that conferences are a numbers game and talk to as many people as you can. If you decide to cold call or cold email, remember to be forthright and to the point. If you’ll be advertising to pull in your audience, consider using a content hook rather than a hard call to action about a product to play to scientists’ curiosity.
Next week we’ll be discussing responding to leads, including some best practices which can can lead to massive increases in conversion.
Validate Your Messages!
Carlton Hoyt
I think that this point is obvious to the vast majority of life science marketers who may read this – and you should certainly be well aware if you’ve been following this blog or the Marketing of Life Science Tools & Services Group on LinkedIn – but I’ve seen this problem a few times in the past week so I think it’s worth bringing up: When you make a claim, be sure you validate that claim.
Let’s drill down to the core of this discussion and build from there. What is a claim? According to Merriam-Webster, a claim is “a statement saying that something happened a certain way or will happen a certain way : a statement saying that something is true when some people may say it is not true.” For our purposes, we can view a claim to be any statement that may reasonably be disputed.
Of course, the reason that you are making claims is to convey a viewpoint to another person. The whole purpose of marketing communications is to get an audience to adopt a particular point of view; if they can reasonably dispute that point of view and you do not attempt to preemptively address potential points of dispute, then your marketing communications will be ineffective. The nature of these disputes are myriad; they could be anything from simply questioning a factual point or rejecting an opinion to questioning the neutrality of the source or the basis for the claim itself. Resolving these disputes is where validation comes in.
Funny side note, going back to Merriam-Websters, their example usage of the word validation is: “I’m afraid we cannot act on your claim without validation.”
Validation is where you resolve the disputes that the audience may have with regards to your claims. This can involve provision of additional factual information or data, third party opinions, etc. How we do so is not important here; once you identify how your claims are likely to be disputed then the method of solving those disputes is often obvious. What is important is the recognition that what you are communicating is, in fact, a claim (and therefore may be disputed) and, subsequently, how that claim is likely to be disputed. Once those things are identified, you’re well on your way to improving your marketing messages.
Also, when validating your marketing messages, don’t forget that it’s always better to show than to tell.
Easily Improving Retention
Carlton Hoyt
Nothing is better for customer retention than great products. As marketers, however, the quality of the product is at least somewhat out of our control. The easiest tactic that the marketer has to improve retention is, ironically, one of the ones that can most easily turn customers off: email.
The occasional newsletter or promotional email will help so long as you don’t overuse it. Simply reminding customers of your brand will have a positive effect. Sending emails with great content will help even more, and is something that provides more value to customers and which fewer life science companies do. However, there is one thing that few companies do and large companies are often particularly bad at…
The surprise personal email. The surprise personal email should be from a person and be highly personalized. (Note that this does not mean it cannot be automated; using email automation for this is fine.) The more information you use about the customer the better; referencing their application is great, but at minimum you should refer to them by name and reference the product which they purchased. This email could be sent soon after a purchase where personal contact would not necessarily be expected (a low-cost consumable, for instance) or months after the purchase of something where follow-up would be expected. Generally, the surprise personal email should inquire about the customer and offer support. You want to show that you care and you’re accessible. Response rates will vary based on the nature of the product and the timing, but response rates as high as 20% are not uncommon so be sure you can take the time to tend to the responses which you may receive. It will be worthwhile; not only will you be helping your customer retention but you’ll also get a lot of useful feedback about your product or service.
Email is often overused in ways that underperform for the life science companies that leverage it. At the same time, it is the easiest way to improve customer retention. By seeking to provide value to the customer, email will better serve that purpose. Ensure that your emails provide value to the customers and demonstrate commitment to them and your scientist-customers will reward you for it.
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.
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.
Reflect Your Priorities
Carlton Hoyt
What do catalogs, websites, and many other general-purpose marketing tools have in common? There are a lot of possible answers to that question, but the answer of the day is that they all contain information on a large amount of offerings. Surprisingly frequently, the order in which these are presented is due to factors such as newness, alphabetical order, legacy documents, or some type of semi-arbitrary organization that seems to make sense to the person creating the document. These layouts do not adequately serve the company.
When creating marketing documents highlighting multiple offerings, be sure to give the most important ones the best “real estate”. While your company may define importance in its own way (it is often measured in profit potential, but may also be based in part or in whole on how central an offering is to the core business, potential for new customer recruitment, or other factors), be sure those most important products and services receive the attention which they merit.
This may seem obvious (it is) and it may seem easy to do (it is) but if you go back and look at any marketing documents your company has which describe many offerings you may be surprised at just how buried some important offerings are.
It is of critical importance that the layout of the document makes sense for the user, but life science marketers should be able to easily divert attention to important offerings while still having a logical flow of information. You should be able to simultaneously prioritize and organize your life science communications with relative ease.
Shed The Problem Customers
Carlton Hoyt
Anyone who has spent time in sales or customer support can recall a few customers who always demand more than others or are just notoriously stingy. Chances are that all life science companies have some, and they’re all cutting into your profits. While a few extra service calls or the occasional negotiated discount might not be that bad, when this type of behavior is repeated or taken to an extreme customers can become unprofitable. This effect is aggravated by a very common practice: cross-selling.
Denish Shah and V. Kumar from the Robinson College of Business at Georgia State University published an article in the Journal of Marketing which analyzed data from five Fortune 1000 companies. Their research showed that while only about one in five customers who cross-buy are unprofitable, those that are account for approximately 70% of companies’ total loss from customers. While cross-selling increases profitability from good customers, it also increases losses from bad ones.
Who are these unprofitable problem customers? There are many types, but in the life sciences we have noticed some that have a history of returning items, not making complete payments, demanding an inordinate amount of time from sales and service personnel, or requesting many demos or free trials before making only a small purchase.
The solution to minimizing the losses from these customers is not to stop cross-selling, and the authors of the aforementioned study note that cross-selling is definitely profitable in the aggregate, but it highlights the fact that there are such things as bad customers and companies need to shed them. However, unprofitable customers need to be flagged by sales, support, and / or marketing (this can be done very simply and easily in just about any CRM system) and these customers should either not be marketed to or should be “upsold” more profitable products to compensate. In some circumstances, especially for service companies, relationships with clients may need to be terminated altogether.
No matter what you do to limit the customer losses, do not cut back on service. It’s better to let unprofitable clients go than to offer poor or lacking service. Letting a customer go effects you one time. Poor service can leave a much larger impact.
Your company almost certainly has some problem clients, but chances are you probably wouldn’t be able to come up with a list. By keeping track of your problem customers and taking appropriate action to mitigate them, you’ll be able to increase your profitability with a very low expenditure of effort.
The Customer’s Perspective
Carlton Hoyt
In most life science companies, marketing and product development work in somewhat close contact. Marketing (as well as sales) frequently relay customer needs to product development and help them to understand those needs and adopt a customer perspective. When it comes to their own craft, however, life science marketers often fail to follow their own advice and adopt that critical customer perspective. Instead, marketers tell the tale of their products, focusing on why the product is great rather than how it fulfills a need.
A while ago, we posted about the end of solution sales; how customers typically will be 60% of the way to completing their purchasing decision before ever contacting a supplier. This means that solution sales are becoming less effective. At 60% of the way through the buying journey, customers know what their problem is, what their needs are, and already have (at least superficially) evaluated a number of options. A sales rep who tries to work through all that all over again with the customer is wasting their time. However, earlier in the decision cycle the customer is far less certain about the nature of their need. In these early stages, customers generally seek information from colleagues or the internet (an unpublished BioBM study showed about 45% of scientists turn to colleagues first when considering a product and about the same number perform an internet search first). Marketers therefore need to engage in a sort of “solution marketing”, helping the customer to frame their own problem and needs and, in the process, showing how their products or services can fulfill those. Simply discussing your product’s technology, features, and benefits does not adequately do that job. Instead, marketers need to take on the perspective of the customer and frame their products and services around their needs.
To help guide you in creating customer-centric communications, ask yourself these questions:
• Does this communication ever address the customer? (with second-person language – “you” “your”)
• Did we clearly address the needs of the customer? Would our statement of this need still be valid if removed from the context of our product / service?
• What do we define first? The product / service or the customer’s problem that we are trying to solve?
• Did we clearly state how our product / service solves the problem? Do we offer specific solutions or simply general ones?
Product-centric marketing leaves a disconnect. The customer has a need, and the product provides a solution, but the customer is left on their own to decipher how (and how well) the product would meet their needs. Customer-centric marketing does that math for them by framing your product or service from the perspective of how it provides value and fills their needs. By adopting the viewpoint of the customer and creating customer-centric marketing communications, life science marketers can generate more demand.