Cross-promotions are a valuable and highly focused marketing tool to drive additional sales. By promoting products to a customer who has purchased a related product, you help ensure that your marketing dollars are spent on a highly targeted audience that is more likely to be receptive to your marketing message. However, creating highly relevant cross-promotions can be an issue for a small company with a limited product offering, but still provides an opportunity to compete with larger competitors.
Life Technologies, a biotech behemoth among laboratory products companies, has no such problems. If they sell a customer a piece of equipment, for example, they more than likely have all sorts of reagents, kits, and even related equipment to promote based on the customers initial purchase. Knowing a customer’s prior purchases allows them to predict their needs, and cross-promotions ensure that they deliver a marketing message relevant to those needs. A small company, however, may sell the kits or reagents but not the related equipment. Cross-promotion is like a puzzle and you can only successfully execute it if you have all the pieces. The pieces, however, can be obtained through “outside” cross-promotions.
Small life science companies can form marketing partnerships to execute outside cross-promotion strategies. For example, if your company sells thermal cyclers but not PCR primers you can partner with another small company that sells PCR primers but doesn’t compete in the thermal cycler space and jointly promote each other’s products. You then gain the benefits of each others marketing efforts – every time your partner gets a sale or a new customer, you get a highly targeted lead, and vice versa. This is not only a great way to drive sales and product / brand awareness, but is also an effective way to develop highly positive long-term relationships with companies in markets closely related to your own.
I was speaking with someone the other day about the general state of things (not just the industry or the economy but everything, really) when I remembered and used a phrase that was uttered to me some time ago – “change is permanent”. I didn’t mean it in a way that when something changes it is changed permanently, but rather that change in itself is permanent; change is continually happening. While I can’t remember who initially gave that phrase to me, I’m glad he or she did because I use it often and like to come back to it on occasion to step back and make sure that I am changing to adjust to the change happening around me.
It is an undeniably true statement – the state of anything is rarely constant, and even if it is there are things changing around it that will ultimately change it objectively and / or subjectively. Before we get too philosophical on the topic let me ask a simple question: when was the last time you took a minute to assess how change is happening around your organization? For example, how is your industry or sector changing? How are your customers changing? How are you ensuring a competitive strategic positioning in the future when you account for that change? While these are undeniably important questions, they are questions that we very often either neglect to address or do not address seriously. It’s very easy to get caught up in your own company’s day-to-day operations or in your own tasks and not address the future because it’s not a pressing need at this exact moment, but if you do you’ll get left behind by change; you won’t evolve.
Change is even more of a constant in such a rapidly evolving field as the life sciences. How are you directing your own evolution to prepare for future change? How are you managing change and ensuring that detecting and responding to change is built into your organization? If you haven’t recently, step back and think about the questions that I have raised. Try to do so when you’re away from your desk and have a clear head and can mentally zoom out from your insider perspective a bit. If you have a hard time coming up with answers or you know the answers and they aren’t good, then it may be time to figure out how to empower the evolution of your organization to address the future while you still have time.
[one_half]Small or start-up businesses are rarely sitting on stockpiles of cash reserves. Quite the opposite, cash is usually a bit tight, so if you are running a small life science company you probably want to take every opportunity you can to improve your cash position. What you may not have thought of is leveraging the weak US dollar to generate short-term revenues and grow your cash-on-hand.
The US Dollar Index, which tracks the dollar’s value against a basket of nine other currencies, is down over 11 points from its 52-week high of 88.71 in June. Put simply, that means that if your goods are priced in US dollars, they will be a lot cheaper to customers and distributors in other countries who use currencies that have comparatively appreciated. For example, the dollar is down about 15% vs. from it’s highs against the euro and the Japanese yen, and is down about 10% from the highs against the Brazilian Real and the British pound. Your dollar-denominated products are now 15% cheaper to customers in the Eurozone than they were just four months ago! That’s a substantial discount, and one that you can flaunt to your customers and distributors in these areas and others whose currencies have similarly appreciated against the dollar.
How do you take advantage of this? Simple! Send marketing messages specifically targeting customers in a particular region and bring up the favorable exchange rate. Call your distributors and encourage them to buy now since restocking on your products is now cheaper. Don’t drag your feet, either, since the dollar may begin to re-appreciate in the near future. If you are in need of short-term revenues or an improved cash position, highlight your newly cheap products to your international customers and distributors now![/one_half]
Taking a pragmatic view on the state of the economy, it’s fairly easy to see that the road to recovery will very likely be a long one. Governments are in huge amounts of debt, and the “great recession” has been especially hard on small businesses, yet we see the stock markets going back up; the Dow is almost to 11,100 as I write this. Why do things feel so bad but look so good for big businesses? A lot of it isn’t due to revenue growth – global demand is still anemic. A lot of it is due to cost cutting to improve bottom lines which have left many large companies with very positive balance sheets. Now, having likely seen the worst of the recession and being in a strong financial position, large companies are starting to reinvest in anticipation of future demand growth.
How does this effect you?
Well, if you are a small or start-up company, chances are you’re still hurting. You probably couldn’t easily cut personnel and costs as the large companies have. You also may not have the stockpile of cash to resume hiring in preparation for renewed demand or may not want to hire because of uncertainties about future revenues. Therein lies a problem. How will your company compete when the large companies are getting a head-start?
The answer: by not letting them. Easier said than done? Maybe not.
For a start-up or small company, even hiring one person can be a huge investment and a very significant increase in overhead, yet you will need the additional capabilities to ramp up your marketing, business development, and other efforts to position yourself for increasing future demand. This can be done by “virtually” increasing your human resources and capabilities through strategic outsourcing. By partnering with a skilled service provider, you can execute projects faster and / or sooner, prevent schedule overruns, and effectively increase your available competencies. It also often allows you to increase or decrease your effective workforce size at will.