Life science marketers often hold many simultaneous viewpoints on why customers purchase products. Frequently, the attributed reasons include a hodgepodge of quality, price, ease of use, suitability for their application, adoption by others, various performance metrics and many other reasons that may be general or product-specific. All that gets a bit confusing, and is a bit over-defined if you ask me. I prefer to start from one attribute and then elucidate from there: life scientists make purchasing decisions based on risk.
Considering the scientist as a purchasing decision-maker, risk has two main components: financial and utility. Financial risk can be represented as price, although a more accurate representation is total cost of ownership (TCOO). If a product is very expensive, that makes the purchase more risky since there will be less resources to devote to other important endeavors and also since there are more sunk costs if the product doesn’t perform to the customer’s expectations. Utility risk pertains to the product ability to perform the functions that it is expected to by the customer. In other words, from a customer-centric standpoint: “In my particular application(s), how likely is this product to meet my expectations?”
The risk-based view can answer a question that leaves a lot of companies scratching their heads: why free samples are used so infrequently. It’s common for life science consumables companies, especially smaller companies, to give out free samples when a product is first launched in order to get people to try it. Most often, unless the brand is highly trusted, free samples fail their purpose and are left unused on the shelf. This is because giving away the product only serves to reduce one of the two main components of risk: financial risk. It does nothing to mitigate utility risk.
What life science tools and services companies should aim to do is reduce overall risk by lowering utility risk as much as possible such that financial risk does not need to be reduced and they therefore do not need to discount their product (or perhaps can raise the price on their product!) This gets to the heart of conveying value to the customer – that value should, as much as possible, be something that is experienced rather than something that is simply told. This becomes clear if you ask yourself: “What can we do to minimize utility risk?” Simply claiming that your product works would be pretty far down the list.
If you’re still not convinced, go out and ask a few scientists which of the following they would be more likely to purchase: 1) a product that claims to have better performance but you are unsure if it will work for you, or 2) a product that has lesser performance but you are certain it will work.
Performance metrics are undeniably important, and scientists have different reasons for purchasing different products. At the end of the day, the product with the lowest risk will be able to capture a greater market share than its competition.
I did a small study earlier this week to compare prices across six major US life science distributors (you can read about it here). Because of that, I had occasion to go through those companies’ websites and look for products. All of these companies are, by industry standards, fairly large companies, and all of them sell online. For some of them, online sales is a very significant portion of their revenues. I would bet that for most it’s their fastest growing sales channel. Yet most had glaring problems in their website. One had search results that blinded the user with bright yellow highlighted terms all over the page. Another had a high percentage of products that were not identified by their model number. Yet another had an annoyingly persistent “featured product” box that showed up front and center in the search results but never had anything in it. There was a search that seemingly only used “OR” logic for every word in the term – the more terms you added, the less relevant the results became.
These are glaring errors that hurt user experience, and they could be easily identified if these companies did user testing. This is an important point, as anything that takes away from the experience of using your website decreases your competitiveness by driving users away from your website (and likely to your competitors websites).
For those who may not be familiar with it, user testing involves someone who is within your target demographic and recording their interaction with their website. You usually give them a generic task to perform on your site and they speak their thoughts as they perform the task. The output comprises a series of screencasts with voice recordings which are then analyzed to find problems with the user experience or more generally find things that users like and don’t like (there are other techniques and tools that can enhance the output as well).
User testing is very common in many markets, but seems to be relatively uncommon in the life sciences. That may, in no small part, be due to the inherent difficulty in getting a group of scientists to sit down and do a user test, but we find that to be more of an excuse than a reason. User testing may simply not be in the culture of life science marketing, contrasted to it being fairly prevalent in B2C markets. Whatever the reason that it isn’t used, there is no good reason that it shouldn’t be used.
Anything that adversely affects user experience will have a negative impact on the purpose of the website – be it lead generation, sales, or simply progressing users through the purchasing funnel. User testing, especially in conjunction with website analytics, can be a powerful tool to improve user experience and the overall performance of your life science company’s website.
In our Marketing of Life Science Tools and Services group on LinkedIn, we recently discussed an article in the Harvard Business Review on “The End of Solution Sales.” While this is an excellent article and I suggest reading it, we’ll focus on one key finding: that “[…] customers completed, on average, nearly 60% of a typical purchasing decision — researching solutions, ranking options, setting requirements, benchmarking pricing, and so on — before even having a conversation with a supplier.” This is just the beginning, but it does highlight something of key importance for marketing that is not discussed in the article.
If 60% of the purchasing decision is concluded before interaction with sales, marketing needs take responsibility (and claim the opportunity) for satisfying customers’ self-driven quests for information.
As the default behavior of B2B consumers is changing to include more self-fulfilled quests for information, life science marketers must make the necessary information to drive their target audience’s purchasing decisions available. The ability to predict the information that will be necessary, as well as the downstream ability to shape content to the audience’s measured behavior, is of increasingly critical importance. Marketing campaigns need to be able to respond dynamically to collected data on prospect behavior if the appropriate content is to be delivered at the appropriate time. A content roadmap becomes an even more critical component of generating demand. These factors collectively drive the importance of performing market research / marketing research, developing a clear marketing strategy, and planning a content-driven campaign.
If B2B purchasing decisions are 60% made by the time a conversation w/ supplier occurs, this places more of a responsibility on life science marketers to shape opinion before that first conversation. More planning is required, however such planning will have an increasingly positive effect on marketing ROI. Furthermore, we can conclude that marketing campaigns driven primarily by awareness-generation efforts will continue to decrease in effectiveness.
Efficient life science sales operations require that opportunities are handed from marketing to sales at the correct point in the buying cycle. When there is a lack of proper marketing support, leads often get handed over to sales too early, creating situations where sales effort is wasted, leading to operational inefficiencies in sales. The symptoms caused by underdeveloped leads are usually three-fold:
- Sales conversion is low because of poor lead quality which is ultimately due to underdeveloped leads. This situation often leads to sales and marketing pointing fingers at each other.
- The sales cycle is prolonged, requiring more overall effort from sales and, therefore, increased costs
- Leads will go cold at a high rate
The opposite effect, where sales effort is insufficient or too much is left to marketing, is also possible. Recent research suggests that it may actually be common and also cause decreased conversion and wasted sales effort. Regardless, the method for diagnosis is similar.
If you are creating a lot of leads but not closing a lot of opportunities then you may be under-nurturing (or over-nurturing) your leads. Compare your marketing contact points to your content roadmap (you may need to design a content roadmap if you do not already have one). A content roadmap based on strategy and market research should provide a complete picture of the information requirements of your target audience. Like a blueprint for a house, the content roadmap will provide a framework for creating leads and, subsequently, nurturing your leads into qualified opportunities. Overlay that framework onto your current marketing campaign and ask: Are you delivering all of the necessary content? Is sales delivering content that marketing should deliver (or vice versa)? At this stage, the difference between what you are doing and what you should be doing should be clear.